Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule To Adopt Fees for Extended Trading Hours, 12680-12687 [2015-05476]
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12680
Federal Register / Vol. 80, No. 46 / Tuesday, March 10, 2015 / Notices
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
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the Exchange consents, the Commission
will:
A. by order approve or disapprove
such proposed rule change, or
B. institute proceedings to determine
whether the proposed rule change
should be disapproved.
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–2015–023 on the subject line.
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Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CBOE–2015–023. 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
17:53 Mar 09, 2015
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.34
Brent J. Fields,
Secretary.
[FR Doc. 2015–05477 Filed 3–9–15; 8:45 am]
BILLING CODE 8011–01–P
IV. Solicitation of Comments
VerDate Sep<11>2014
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 CBOE. 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–
2015–023 and should be submitted on
or before March 31, 2015.
SECURITIES AND EXCHANGE
COMMISSION
[File No. 500–1]
Order of Suspension of Trading; In the
Matter of Aspire International, Inc.,
Border Management, Inc., and
Landmark Energy Enterprises, Inc.
March 5, 2015.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Aspire
International, Inc. because it has not
filed any periodic reports since the
period ended December 31, 2010.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Border
Management, Inc. because it has not
filed any periodic reports since the
period ended September 30, 2011.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Landmark
Energy Enterprises, Inc. because it has
not filed any periodic reports since the
period ended July 31, 2012.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
companies.
Therefore, it is ordered, pursuant to
Section 12(k) of the Securities Exchange
Act of 1934, that trading in the
securities of the above-listed companies
is suspended for the period from 9:30
a.m. EST on March 5, 2015, through
11:59 p.m. EDT on March 18, 2015.
By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015–05516 Filed 3–6–15; 11:15 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74422; File No SR–CBOE–
2015–020]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Its Fees
Schedule To Adopt Fees for Extended
Trading Hours
March 4, 2015.
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 February
18, 2015, 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 Substance of
the Proposed Rule Change
The Exchange proposes to adopt fees
for its Extended Trading Hours session.
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
1 15
34 17
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2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 80, No. 46 / Tuesday, March 10, 2015 / Notices
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 recently amended its
rules to offer trading in two exclusively
listed options (SPX, including SPXW,
and VIX) during extended trading hours
from 2:00 a.m. to 8:15 a.m. Chicago time
Monday through Friday (‘‘Extended
Trading Hours’’ or ‘‘ETH’’). The
Exchange intends to commence trading
in the ETH session on Monday, March
2, 2015 for VIX and Monday, March 9,
2015 for SPX/SPXW. As such, the
Exchange proposes to establish fees for
the trading of SPX, SPXW and VIX
options during ETH (all fees referenced
herein are per-contract unless otherwise
stated). First, the Exchange proposes to
adopt Footnote 37, which provides
general information regarding the two
trading sessions and indicates which
products will be available in ETH.
Transaction Fees
The Exchange proposes to assess the
same fees regarding SPX, SPXW and
VIX in the ETH session as are assessed
regarding SPX, SPXW and VIX in the
Regular Trading Hours session
(‘‘RTH’’) 3 (with a few exceptions, which
shall be explained herein). As in RTH,
the Proprietary Index Options Rate
Table will apply during ETH.
Transaction fees for SPX (including
SPXW) options will be as follows (all
listed rates are per contract):
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Customer (Premium > or = $1) ........
Customer (Premium <$1) .................
Clearing Trading Permit Holder Proprietary ..........................................
CBOE Market-Maker/LMM ...............
Joint Back-Office, Broker-Dealer,
Non-Trading Permit Holder Market-Maker ......................................
Professional/Voluntary Professional
(Premium > or = $1) .....................
Professional/Voluntary Professional
(Premium <$1) ..............................
$0.44
0.35
Customer (Premium > or = $1) ........
$0.48
Customer (Premium $0.11–$.99) .....
Customer (Premium <$0.11) ............
Clearing Trading Permit Holder Proprietary ..........................................
CBOE Market-Maker/LMM (Premium
> or = $0.11) .................................
CBOE Market-Maker/LMM (Premium
<$0.11) ..........................................
Joint Back-Office, Broker-Dealer,
Non-Trading Permit Holder Market-Maker ......................................
Professional/Voluntary Professional
0.27
0.10
0.25
0.23
0.05
0.40
0.40
Surcharges
The Exchange also proposes to apply
in ETH, like RTH, an Index License
Surcharge Fee of $0.13 per contract for
SPX options, including SPXW, and
$0.10 per contract for VIX options for all
non-customer orders. The surcharges are
assessed to help the Exchange recoup
license fees the Exchange pays to index
licensors for the right to list S&P 500
Index-based products and volatility
index options for trading. Additionally,
in order to have consistency and to
avoid a cost differential between the
ETH and RTH sessions, the Exchange
proposes to apply the Customer Priority
Surcharges for VIX and SPXW in ETH.
Specifically, as in RTH, all customer (C)
contracts in VIX that have a premium of
$0.11 or greater, are executed
electronically and that are Maker nonTurner will be assessed a $0.10
surcharge.4 As in RTH, all customer (C)
contracts in SPXW executed
electronically will be assessed a $0.05
surcharge. The Exchange notes that as
ETH opening trades will not affect the
Index Settlement price for VXST, the
exception from the SPXW Customer
Priority Surcharge in RTH for SPXW
options in the SPXW electronic book
that are executed during opening
rotation on the final settlement day of
VXST options and futures and which
have the expiration that contribute to
the VXST settlement calculation will
not exist in ETH.
0.25
0.20
Exceptions
All of the proposed transaction fees
and surcharges listed above are the same
0.40 amounts as those currently assessed for
SPX, SPXW and VIX during RTH, with
0.40
certain exceptions. The first exception
0.40 relates to Professional/Voluntary
Professional (‘‘W’’ origin code) fees.5
Particularly, the Exchange notes that
Transaction fees for VIX options will
SPX is traded on the Exchange’s Hybrid
be as follows (all listed rates are per
contract):
3 Rule 1.1(qqq) defines ‘‘Regular Trading Hours’’
as the hours during which transactions in options
may be made on the Exchange as set forth in Rule
6.1 (which hours are from 8:30 a.m. to either. 3:00
p.m. or 3:15 p.m. Chicago time).
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4 As of the date of this filing, the Customer
Priority Surcharge for VIX is waived for complex
orders. This waiver will also apply during ETH and
will remain in effect until and unless a rule filing
is submitted reinstating the surcharge for VIX
complex orders. See Exchange Fees Schedule,
Customer Priority Surcharge.
5 See Exchange Fees Schedule, Proprietary Index
Options Rate Table—Underlying Symbol List A.
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3.0 system (‘‘Hybrid 3.0’’) during RTH,
and the Professional and Voluntary
Professional designation is not available
in Hybrid 3.0 classes. As such,
Professionals and Voluntary
Professionals trading SPX are currently
assessed the same fee amounts as
customers during RTH. During ETH
however, SPX will be traded on the
Hybrid Trading System (‘‘Hybrid’’),
which recognizes the difference
between Professionals/Voluntary
Professionals and Customers.
Accordingly, the Exchange proposes to
assess to Professionals/Voluntary
Professionals the same fee amount for
SPX transactions during ETH as apply
to the majority of other proprietary
index options trading on Hybrid (i.e.,
$0.40 per contract). The Exchange also
proposes to assess the Index License
Surcharge to SPX orders with the ‘‘W’’
origin code during ETH.
In order to have consistency between
the two trading sessions, the Exchange
also proposes to provide that SPX orders
that have a Professional/Voluntary
Professional designation (‘‘W’’ origin
code) during RTH will be assessed the
same transaction fees as apply to the
other Underlying Symbol List A 6
Products (i.e., $0.40 per contract). The
Exchange also proposes to apply the
Index License Surcharge to SPX orders
that have a Professional/Voluntary
Professional designation during RTH
(i.e., $0.13 per contract). The purpose of
these proposed rule changes is to
minimize cost differentials between the
two trading sessions, as well as provide
consistent fees for similar products.
Specifically, similarly situated Trading
Permit Holders (‘‘TPHs’’) (i.e.,
Professional/Voluntary Professionals)
will be assessed the same transaction
fees and Index License Surcharges
regardless of session.
Next, the Exchange notes that during
RTH, the Automated Improvement
Mechanism (‘‘AIM’’) is activated for VIX
options, but not SPX (or SPXW) options.
During ETH however, AIM will be
activated for both VIX and SPX
(including SPXW) options. As such,
SPX and SPXW transactions executed
via AIM during ETH will be assessed
AIM Agency/Primary and AIM Contra
fees based on an order’s origin code. As
in RTH, the current AIM Agency/
Primary and AIM Contra fees for VIX
options will apply during ETH. The
Exchange also proposes to make a
minor, non-substantive change to the
title of the AIM fees column.
6 As of the date of this filing, ‘‘Underlying Symbol
List A’’ consists of OEX, XEO, SPX (including
SPXW), SPXpm, SRO, VIX, VXST, Volatility
Indexes and binary options.
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Particularly, the Exchange notes that
throughout the Fees Schedule, when
listing proprietary products, ‘‘VIX’’
generally precedes ‘‘VXST.’’ To remain
consistent, the Exchange proposes
switching the order of these products in
the AIM fees column.
The Exchange next notes that the
Hybrid 3.0 Execution Surcharge will not
apply in ETH. As described above,
while SPX is traded on Hybrid 3.0
during RTH, SPX will be traded on
Hybrid during ETH, and thus the Hybrid
3.0 Execution Surcharge would not be
applicable. Additionally, the Exchange
notes that as the ETH session will not
support trading in FLEX options, all fees
relating to FLEX in RTH, would not
apply in ETH. Finally, unlike RTH, the
Exchange does not propose to assess a
Tier Appointment Fee 7 to SPX/SPXW
or VIX at this time, as the Exchange
does not want to discourage MarketMakers from participating in ETH.
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LMM Rebate
In the filing that adopted Extended
Trading Hours, CBOE stated that it
would submit a separate rule filing to
adopt all fees applicable to Extended
Trading Hours, including the amount of
a rebate to be provided to Lead MarketMakers (‘‘LMMs’’) that satisfy a
heightened quoting standard.8
Accordingly, the Exchange proposes to
provide that LMM’s that meet a certain
heightened quoting standard (which
shall be explained herein), will receive
a pro-rata share of a ‘‘compensation
pool’’ equal to $25,000 times the
number of LMMs in that class.
By way of background, pursuant to
subparagraph (e)(iii)(A) of Rule 6.1A,
the Exchange may approve one or more
Market-Makers to act as LMMs in each
class during Extended Trading Hours in
accordance with Rule 8.15A for terms of
at least one month.9 However, to the
extent the Exchange approves MarketMakers to act as LMMs during ETH,
subparagraph (e)(iii)(B) of Rule 6.1A
provides that LMMs must comply with
the continuous quoting obligation and
other obligations of Market-Makers
described in subparagraph (ii) of Rule
6.1A,10 but not the obligations set forth
7 See Exchange Fees Schedule, Trading Permit
and Tier Appointment Fees Table.
8 See Securities Exchange Act Release No. 34–
73704 (November 28, 2014), 79 FR 233 (December
4, 2014) (SR–CBOE–2014–062).
9 On September 22, 2014, the Exchange issued
Regulatory Circular RG14–134 which announced
that the Exchange had appointed 3 LMMs in SPX
options and 3 LMMs in VIX options during ETH.
The LMM appointments will be effective for a oneyear period, beginning on the launch date for ETH
trading of the applicable class.
10 Rule 6.1A(e)(ii) provides that notwithstanding
the 20% contract volume requirement in Rule
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in Rule 8.15A 11 during Extended
Trading Hours for their allocated
classes. It further provides that LMMs
do not receive a participation
entitlement as set forth in Rules 6.45B
and 8.15B during ETH. Rather, pursuant
to subparagraph (e)(iii)(C) of Rule 6.1A,
if an LMM (1) provides continuous
electronic quotes in at least the lesser of
99% of the non-adjusted series or 100%
of the non-adjusted series minus one
call-put pair in an ETH allocated class
(excluding intra-day add-on series on
the day during which such series are
added for trading) during ETH in a
given month and (2) ensures an opening
of the same percentage of series by 2:05
a.m. for at least 90% of the trading days
during ETH in a given month, the LMM
will receive a rebate for that month in
an amount to be set forth in the Fees
Schedule.12 Specifically, the Exchange
proposes to provide in the Fees
Schedule (new Footnotes 38) that if a
LMM meets the heightened standard
described above, the LMM will receive
a pro-rata share of an LMM
compensation pool totaling an amount
of $25,000 per month, per LMM, per
class. To clarify how the rebate will
work, the Exchange proposes to include
in the Fees Schedule the following
example: ‘‘if three LMMs are appointed
in SPX, a compensation pool will be
established each month totaling
8.7(d)(ii), Market-Makers with appointments during
Extended Trading Hours must comply with the
quoting obligations set forth in Rule 8.7(d)(ii)
(except during ETH the Exchange may determine to
have no bid/ask differential requirements as set
forth in subparagraph (A) and there will be no open
outcry quoting obligation as set forth in
subparagraph (C)) and all other obligations set forth
in Rule 8.7 during that trading session.
Additionally, notwithstanding the 90-day and next
calendar quarter delay requirements in Rule 8.7(d),
a Market-Maker with an ETH appointment in a class
must immediately comply with the quoting
obligations in Rule 8.7(d)(ii) during ETH.
11 Rule 8.15A (and Rule 1.1(ccc)) requires LMMs
to provide continuous electronic quotes in at least
the lesser of 99% of the non-adjusted series or
100% of the non-adjusted series minus one call-put
pair within their appointed classes, with the term
call-put pair referring to one call and one put that
cover the same underlying instrument and have the
same expiration date and exercise price, for 90% of
the time.
12 Notwithstanding Rule 1.1(ccc), for purposes of
subparagraph (C) of Rule 6.1A, an LMM is deemed
to have provided ‘‘continuous electronic quotes’’ if
the LMM provides electronic two-sided quotes for
90% of the time during Extended Trading Hours in
a given month. If a technical failure or limitation
of a system of the Exchange prevents the LMM from
maintaining, or prevents the LMM from
communicating to the Exchange, timely and
accurate electronic quotes in a class, the duration
of such failure shall not be considered in
determining whether the LMM has satisfied the
90% quoting standard with respect to that option
class. The Exchange may consider other exceptions
to this quoting standard based on demonstrated
legal or regulatory requirements or other mitigating
circumstances.
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$75,000. If each LMM meets the
heightened continuous quoting standard
in SPX during a month, each will
receive $25,000. If two LMM’s meet the
heightened continuous quoting standard
in SPX during a month, those two
LMM’s would each receive $37,500 and
the third LMM would receive nothing.
If only one LMM meets the heightened
continuous quoting standard in SPX
during a month, that LMM would
receive $75,000 and the other two
would receive nothing.’’
In establishing the rebate, the
Exchange believed it was more fitting to
implement an incentive program with a
rebate during ETH, rather than the
obligation/benefit structure that
currently exists during RTH. LMMs will
not be obligated to satisfy heightened
continuous quoting and opening
quoting standards during ETH. Instead,
LMMs must satisfy a heightened
standard to receive a rebate, which the
Exchange believes will encourage LMMs
to provide significant liquidity during
ETH. Additionally, the Exchange notes
that it expects that TPHs may need to
undertake significant expenses to be
able to quote at a significantly
heightened standard during ETH, such
as performing system work and adding
personnel. The Exchange believes
providing a rebate will incent appointed
LMMs to increase liquidity during ETH,
as the rebate could offset the costs that
accompany providing quotes during
ETH.
CBOE Proprietary Products Sliding
Scale
Next, the Exchange proposes to apply
the CBOE Proprietary Products Sliding
Scale in ETH. The CBOE Proprietary
Products Sliding Scale table provides
that Clearing Trading Permit Holder
Proprietary transaction fees and
transaction fees for Non-Clearing
Trading Permit Holder Affiliates in
Underlying Symbol List A 13 are
reduced provided a Clearing Trading
Permit Holder (‘‘Clearing TPH’’) reaches
certain average daily volume (‘‘ADV’’)
thresholds in all underlying symbols
excluding Underlying Symbol List A
and mini-options on the Exchange in a
month. The Exchange proposes to
provide that if a TPH reaches these
thresholds in RTH, that TPH would be
entitled to reduced proprietary
transaction fees during both RTH and
ETH. Specifically, if a TPH meets the
ADV thresholds in all underlying
symbols excluding Underlying Symbol
13 SROs are currently excluded from the CBOE
Proprietary Products Sliding Scale. See Exchange
Fees Schedule, CBOE Proprietary Products Sliding
Scale.
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List A and mini-options, the Exchange
would then calculate the proprietary
product volume thresholds by
aggregating VIX and SPX/SPXW volume
in ETH with RTH volume in Underlying
Symbol List A (i.e., a TPH’s total volume
in Underlying Symbol List A during
both RTH and ETH in a calendar month
would be divided by the total volume in
Underlying Symbol List A executed
with an ‘‘F’’ or ‘‘L’’ origin code during
both RTH and ETH in the same calendar
month).14 The Exchange proposes to
apply the Proprietary Products Sliding
Scale during ETH in order to avoid a
cost differential between the two
sessions. Additionally, the Exchange
believes applying the CBOE Proprietary
Products Sliding Scale to the ETH
session will encourage Clearing TPHs to
provide liquidity during ETH.
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Customer Large Trade Discount
The Customer Large Trade Discount
program (the ‘‘Discount’’) provides a
discount in the form of a cap on the
quantity of customer (‘‘C’’ origin code’’)
contracts that are assessed transactions
fees in certain options classes. The
Discount table currently in the Fees
Schedule sets forth the quantity of
contracts necessary for a large customer
trade to qualify for the Discount, which
varies by product. Currently, under the
‘‘Products’’ section in the Discount
table, the following S&P products for
which the Discount is in effect are
listed: ‘‘SPX, SPXw, SPXpm, SRO.’’
Customer transaction fees for each of
these products are currently charged up
to the first 15,000 contracts in a
qualifying customer transaction.
Additionally, the Fees Schedule
currently provides that regular customer
transaction fees will only be assessed for
the first 10,000 VIX options contracts in
a qualifying customer transaction. The
Exchange proposes to apply the
14 For example, Clearing Trading Permit Holder A
executes ADV of 25,000 options contracts on CBOE
across all classes excluding Underlying Symbol List
A and Mini-Options during RTH in March 2015.
Clearing Trading Permit Holder A also executes a
total of 600,000 Firm (F or L origin code) contracts
in Underlying Symbol List A during RTH and
200,000 Firm (F or L origin code) contracts in SPX
and/or VIX during ETH in March 2015. In March
2015, 7,605,000 total Firm (F or L origin code)
options contracts in Underlying Symbol List A are
executed on CBOE during RTH and 4,095,000 total
Firm (F or L origin code) options contracts in SPX
and VIX are executed during ETH (for a monthly
total of 11,700,000 Firm contracts). Clearing
Trading Permit Holder A’s total 800,000 contracts
represents 6.84% of the total monthly Firm (F or
L origin code) options contracts volume in
Underlying Symbol List A. Trading Permit Holder
A’s transaction fees for classes in Underlying
Symbol List A for January 2015 are $0.20 per
contract on the first 760,500 contracts (6.50% ×
11,700,000), or $152,100, and $0.10 per contract on
the remaining 39,500 contracts, or $3,950, for a total
of $156,050, or $0.195/contract.
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Discount in ETH, the same as RTH. The
Exchange notes however, that as the
trading sessions will have separate order
books and require separate logins for
access, and as there will be no ‘‘rolling’’
of orders by the Exchange between the
two sessions, in order to be eligible to
qualify for the Discount, an order must
be executed in its entirety in either RTH
or ETH, but not partly in both. As in
many cases there will be separate
personnel staffing the ETH and RTH
sessions, with different logins, different
systems and different customer
relationships, and as orders entered into
each session will have different Order
Routing System (ORS) IDs, and as there
will be no Floor Broker participants in
ETH who, during a normal RTH session
may need to execute a large and/or
complex order using different means
and mechanisms, the Exchange does not
wish to offer a cross-session Discount
program at this time.
Trading Permits
The Exchange next seeks to set forth
the access fees for ETH Trading Permit
types as well as a description of each
Trading Permit type. Specifically, the
Exchange proposes to charge $1,000 per
month for each ETH Market-Maker
Trading Permit and $500 per month for
each ETH Electronic Access Trading
Permit. The ETH Market-Maker Trading
Permit will entitle the holder to act as
a Market-Maker in ETH and will
provide an appointment credit of 1.0, a
quoting and order entry bandwidth
allowance, and up to three logins. The
ETH Electronic Access Permit will
entitle the holder to electronic access to
the Exchange during the ETH session.
The Exchange notes that as during the
RTH session, holders of an ETH
Electronic Access Permit must be
broker-dealers registered with the
Exchange in one or more of the
following capacities: (a) Clearing
Trading Permit Holder; (b) TPH
organization approved to transact
business with the public; and (c)
Proprietary Trading Permit Holder.
Additionally, the Exchange notes that a
Proprietary Trading Permit Holder is a
Trading Permit Holder with electronic
access to the Exchange to submit
proprietary orders that are not MarketMaker orders (i.e., that are not M orders
for the Proprietary Trading Permit
Holder’s own account or an affiliated
Market-Maker account). Finally, the
ETH Electronic Access Permit provides
an order entry bandwidth allowance
and up to three logins. The Exchange
notes, that similar to RTH, Trading
Permits purchased for the ETH session
will be renewed automatically for the
next month unless the Trading Permit
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12683
Holder submits written notification to
the Registration Services Department by
4:00 p.m. Central Standard Time on the
second-to-last business day of the prior
month to cancel the Trading Permit
effective at or prior to the end of the
applicable month. Additionally, if a
Trading Permit is issued during a
calendar month after the first trading
day of the month, the access fee for the
ETH Trading Permit for that calendar
month is prorated based on the
remaining trading days in the calendar
month. Finally, the Exchange notes that
as in RTH, Market-Maker Trading
Permits in ETH will not be eligible for
the the Market-Maker Trading Permit
Sliding Scale, as the scale does not
apply to Trading Permits used for
appointments in SPX/SPXW and VIX.15
Bandwidth Packets
The Exchange also proposes to
establish fees for Bandwidth Packets
that may be used during ETH. By way
of background, each RTH and ETH
Trading Permit entitles the holder to a
maximum number of orders and quotes
per second(s) as determined by the
Exchange. Bandwidth Packets provide
TPHs with additional bandwidth. As
during RTH, Market-Makers in ETH will
be provided the opportunity to purchase
one or more Quoting and Order Entry
Bandwidth Packets. Each Quoting and
Order Entry Bandwidth Packet will
entitle the TPH up to three additional
logins and contain the standard MarketMaker quoting and order entry
bandwidth allowance, which may then
be added onto the total bandwidth pool
for a Market-Maker’s acronym(s) and
ETH Trading Permit(s) without the
Market-Maker having to obtain
additional ETH Trading Permits.
Additionally, all TPHs will have the
opportunity to purchase one or more
Order Entry Bandwidth Packets. Each
Order Entry Bandwidth Packet will
entitle the TPH up to three additional
logins and an order entry bandwidth
allowance to use during the ETH
session. The Exchange notes that
Bandwidth Packets purchased for RTH
may not be applied during ETH and
Bandwidth Packets purchased for ETH
may not be applied during RTH. Similar
to RTH, Bandwidth Packets purchased
for the ETH session will be renewed
automatically for the next month unless
the Trading Permit Holder submits
written notification to the Registration
Services Department by the last
business day of the prior month to
cancel the bandwidth packet effective at
or prior to the end of the applicable
15 See Exchange Fees Schedule, Market-Maker
Trading Permit Sliding Scale.
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month. Additionally, as in RTH, if a
bandwidth packet is issued during a
calendar month after the first trading
day of the month, the bandwidth packet
fee for that calendar month is prorated
based on the remaining trading days in
the calendar month. The Exchange notes
that a TPH will only be able to request
Bandwidth Packets during RTH. To
request an additional Bandwidth Packet,
a TPH must submit the ETH Trading
Permit & Bandwidth Packet Additions/
Removals form indicating the date on
which it intends to begin trading during
ETH.
Additionally, the Exchange notes that
the Fees Schedule states that the
quoting bandwidth allowance for a
Market-Maker Trading Permit is
equivalent to a maximum of 35,640,000
quotes over the course of a trading day.
The Exchange intends to amend the
Fees Schedule to clarify that quoting
bandwidth allowance for a MarketMaker Trading Permit is equivalent to a
maximum of 35,640,000 quotes over the
course of a trading session (i.e., a RTH
and ETH Market-Maker Trading Permit
each have a quoting bandwidth
allowance of 35,640,000 quotes over the
course of the RTH and ETH session,
respectively).
mstockstill on DSK4VPTVN1PROD with NOTICES
Waiver of Trading Permit and
Bandwidth Packet Fees
In order to promote and encourage
trading during the ETH session, the
Exchange proposes to waive ETH
Trading Permit and Bandwidth Packet
fees for one (1) of each initial Trading
Permits and one (1) of each initial
Bandwidth Packet, per affiliated TPH,
through the first six (6) calendar months
immediately following the
implementation of ETH, including the
month ETH is launched (i.e., August 31,
2015). Any Trading Permits and
Bandwidth Packets purchased in excess
of one each, will be assessed the fees
described above.
Extra CAS Server Fees
In order to connect to CBOE
Command, which will allow a TPH to
trade on the CBOE System during ETH,
a TPH must connect via either a CMI or
FIX interface (depending on the
configuration of the TPH’s own
systems). TPHs that connect via a CMI
interface must use CMI CAS Servers.
The Exchange proposes to provide that
each TPH in ETH will receive one CAS
Server (plus access to a pool of shared
backup CAS Servers). If a TPH elects to
connect via an extra CMI CAS Server (in
order to segregate TPH users for
business or availability purposes)
beyond the one CAS server, the
Exchange proposes to provide that the
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TPH will be assessed a fee of $10,000
per month for each additional CMI CAS
Server. The purpose of the fee for extra
CMI CAS Servers is to cover the costs
related to the provision, management
and upkeep of such CMI CAS Servers
for the ETH session. Additionally, the
proposed change prevents the Exchange
from being required to expend large
amounts of resources (the provision and
management of the CMI CAS Servers
can be costly) in order to provide TPHs
with an unlimited amount of CMI CAS
Servers.
CBOE Command Connectivity Charges
By way of background, CBOE market
participants can access the Exchange’s
trading systems via Network Access
Ports, and can elect for a Network
Access Port (or Ports) of either 1 gigabit
per second (‘‘Gbps’’) or 10 Gbps.
Currently, the Exchange assesses a fee of
$750 per month for a 1 Gbps Network
Access Port and a fee of $3,500 per
month for a 10 Gbps Network Access
Port. The Exchange notes that these fees
would also be applicable to a TPH that
holds an ETH Trading Permit. More
specifically, if a TPH that holds an ETH
Trading Permit, also holds an RTH
Trading Permit(s) and already is
assessed this fee, it would not be
charged twice. A TPH that holds only an
ETH Trading Permit (or only an RTH
Trading Permit) would be subject to
these fees (i.e., any Trading Permit
Holder that accesses the exchange via
Network Access Ports would be subject
to the fee).
Additionally, the CMI Login ID and
FIX Login ID fees, which are currently
$500 per Login ID, per month, will also
be applicable to ETH. However, the
Exchange notes that the fees related to
waived ETH trading permits and/or
waived ETH bandwidth packets will
also be waived through August 31,
2015.16
PULSe Fees
The Exchange currently charges a fee
of $400 per month per PULSe TPH login
ID for the first 15 login IDs and $100 per
month for all subsequent login IDs. The
Exchange anticipates making PULSe
available during ETH. The Exchange
notes that these fees would also be
applicable to a TPH during ETH.
Particularly, if a TPH is already being
assessed the PULSe login ID fees during
RTH, the TPH would not be charged
16 For example, if a TPH has 2 ETH Market-Maker
Trading Permits and enables 5 logins, the CMI and/
or FIX Login IDs for the first 3 logins will be waived
and the TPH will be assessed $1,000 per month for
the logins associated with the second Trading
Permit ($500 per login).
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again for using the same login ID during
ETH.
Miscellaneous Fees
The Exchange notes that a number of
fees apply the same in ETH as in RTH.
For example, the fees set forth in the
Trading Permit Holder Application Fees
table are applicable for the ETH session
(i.e., if a non-CBOE TPH seeks to
become a CBOE TPH and hold an ETH
Trading Permit only, the applicable
application fees would apply).
Similarly, Web CRD Fees would also
apply to TPHs that hold ETH Trading
Permits only to the extent applicable.
The Trading Permit Holder Transaction
Fee Policies and Rebate Programs table
in the Fees Schedule will also apply
during ETH.17
The Trade Processing Services fee
will also be assessed during the ETH
session. Currently, the Exchange
assesses a $0.0025 fee per contract side
for each matched trade. The Exchange
notes that the Regulatory Fees also are
applicable to TPHs who hold ETH
Trading Permits. Specifically, the
Options Regulatory Fee (‘‘ORF’’) will
include options transactions executed or
cleared by the TPH that are cleared by
the Options Clearing Corporation (OCC)
in the customer range during both RTH
and ETH. The ‘‘DPM’s and Firm
Designated Examining Authority Fee’’
will also continue to apply to applicable
TPHs.
The Exchange lastly notes that fees,
rebates and programs that excluded
SPX, SPXW and VIX during RTH will
also not apply in ETH.18
The proposed changes are to take
effect on March 2, 2015.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) and the rules and regulations
thereunder applicable to the Exchange
and, in particular, the requirements of
Section 6(b) of the Act.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
17 See Exchange Fees Schedule, Trading Permit
Holder Transaction Fee Policies and Rebate
Programs table.
18 See e.g., Exchange Fees Schedule, Liquidity
Provider Sliding Scale, Marketing Fee, Clearing
Trading Permit Holder Fee Cap, and Volume
Incentive Program (‘‘VIP’’).
19 15 U.S.C. 78f(b).
20 15 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 proposed transaction fee amounts
for SPX, SPXW and VIX orders during
the ETH session are reasonable,
equitable and not unfairly
discriminatory because they are the
same as the amounts of corresponding
fees for SPX, SPXW and VIX orders
during the RTH session, with the
exception of the current Professional
and Voluntary Professional fees and
AIM Agency/Primary and Contra fees.
The Exchange notes that the fee
amounts for each separate type of
market participant will be assessed
equally for each product to all such
market participants (i.e., all BrokerDealer orders will be assessed the same
amount, all Joint Back-Office orders will
be assessed the same amount, etc.). The
Exchange believes it’s reasonable,
equitable and not unfairly
discriminatory to assess Professional/
Voluntary Professionals the same fee
amounts, including the Index License
Surcharge Fee, for SPX transactions
during ETH as apply to the majority of
other proprietary index options trading
on Hybrid (including SPXW), because
unlike RTH, SPX will trade on Hybrid
and the Professional and Voluntary
Professional designation exists on
Hybrid. The Exchange also believes it’s
reasonable, equitable and not unfairly
discriminatory to assess the same fee
amounts, including the Index License
Surcharge Fee, for SPX transactions
with a Professional/Voluntary
Professional designation during RTH as
apply to the majority of other
proprietary index options, because it
provides for consistent fees for similar
products, as well as avoids a cost
differential between the two trading
sessions (i.e., orders with a ‘‘W’’ origin
code will be treated the same during
RTH and ETH). Applying the AIM
Agency/Primary and Contra Fees to SPX
and SPXW orders in RTH is reasonable,
equitable and not unfairly
discriminatory because the amount of
the AIM Agency/Primary and Contra
21 15
U.S.C. 78f(b)(4).
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fees will be the same for SPX and SPXW
orders as it is for non-AIM Agency/
Primary and Contra orders and because
unlike, RTH, AIM will be active in SPX
and SPXW during ETH. Not applying
any RTH fees related to FLEX options in
ETH is reasonable, equitable and not
unfairly discriminatory because ETH
will not support trading in FLEX
options.
Assessing the Index License
Surcharge Fee of $0.13 per contract to
SPX and SPXW and $0.10 per contract
to VIX transactions during ETH is
reasonable because the amounts are the
same as the amounts of the
corresponding surcharge for SPX, SPXW
and VIX orders during RTH. The
Surcharge fees are equitable and not
unfairly discriminatory because they
will be assessed to all market
participants to whom the SPX, SPXW
and VIX Surcharges apply and will
apply in both RTH and ETH. Similarly,
assessing the Customer Priority
Surcharge of $0.05 per contract for
SPXW and $0.10 per contract for VIX
options that are Maker, non-Turner
during ETH is also reasonable, equitable
and not unfairly discriminatory because
the surcharges are the same as the
amounts of the Customer Priority
Surcharges during RTH and will be
assessed to all market participants to
whom these surcharges apply.
Additionally the Customer Priority
Surcharges for SPXW and VIX will
apply in both RTH and ETH.
Not applying the SPX/SPXW and VIX
Tier Appointment Fees as well as the
Hybrid 3.0 Execution Fee is reasonable
because market participants involved in
the trading of SPX, SPXW and VIX will
not have to pay such fees. Particularly,
not applying Tier Appointment Fees
during ETH, as compared to RTH is
equitable and not unfairly
discriminatory because ETH is a new
trading session and the Exchange
desires to encourage Market-Makers to
register for SPX/SPXW and VIX tier
appointments, and the more MarketMakers that do so, the more SPX/SPXW
and VIX quoting there will be, which
benefits all market participants. Not
applying the Hybrid 3.0 Execution Fee
during ETH is reasonable, equitable and
not unfairly discriminatory because SPX
will be not traded on Hybrid 3.0 during
ETH.
The Exchange believes it is
reasonable, equitable and not unfairly
discriminatory to offer LMM’s that meet
a certain heightened quoting standard
(described above) a pro-rata share of a
compensation pool equal to $25,000
times the number of LMMs in that class
given the potential added costs that an
LMM may undertake in order to satisfy
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12685
that heightened quoting standard.
Additionally, if an LMM does not satisfy
the heightened quoting standard, then it
will not receive the proposed rebate.
The Exchange believes it is equitable
and not unfairly discriminatory to only
offer the rebate to LMMs because it
benefits all market participants in ETH
to encourage LMMs to satisfy the
heightened quoting standards, which
may increase liquidity during those
hours and provide more trading
opportunities and tighter spreads. The
Exchange also believes it is more fitting,
as well as equitable and not unfairly
discriminatory to implement an
incentive program with a rebate during
ETH, rather than the obligation/benefit
structure that exists during RTH.
Particularly, the Exchange notes that
creating an incentive program in which
LMMs must satisfy a heightened
standard to receive the rebate,
encourages LMMs to provide significant
liquidity during ETH, which is
important as the Exchange expects
lower trading liquidity and trading
levels during ETH and thus fewer
opportunities for an LMM to receive a
participation entitlement (as they
currently do during RTH). Without the
possibility of receiving a participation
entitlement on a sufficient volume of
trades, there would not be sufficient
incentive for Trading Permit Holders to
undertake an obligation to quote at
heightened levels, which could result in
even lower levels of liquidity.
Therefore, a rebate is more appropriate
than imposing an obligation to receive
a participation entitlement. The
Exchange notes that offering a rebate
during ETH is merely a different type of
financial benefit that may be given to
LMMs during ETH if it achieves a
heightened quoting level.
Applying to SPX, SPXW and VIX the
CBOE Proprietary Products Sliding
Scale and the Customer Large Trade
Discount during ETH is reasonable,
equitable and not unfairly
discriminatory because these items
apply to SPX, SPXW and VIX during
RTH. Applying the CBOE Proprietary
Products Sliding Scale during ETH
avoids a cost differential between RTH
and ETH. Moreover, the Exchange notes
that all thresholds in the CBOE
Proprietary Products Sliding Scale will
be the same in ETH as it is in RTH. The
Exchange believes requiring an order be
executed in its entirety in either RTH or
ETH, but not partly in both to qualify for
the Customer Large Trade Discount is
reasonable, equitable and not unfairly
discriminatory because the RTH and
ETH trading sessions will have separate
order books and require separate logins
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for access, and as there will be no
‘‘rolling’’ of orders by the Exchange
between the two sessions.
The Exchange believes the Trading
Permit fees for Market-Maker and
Electronic Access Trading Permits are
reasonable as they are lower than the
Trading Permit fees assessed during
RTH. The Exchange believes it is
equitable and not unfairly
discriminatory to charge lower Trading
Permit fees for ETH than RTH because
ETH is a new trading session and the
Exchange seeks to encourage market
participants to participate in ETH. The
Exchange notes that the more ETH
Trading Permit Holders there are during
ETH, the more liquidity there will be,
which benefits all market participants.
The Exchange also believes it is
equitable to assess different access fees
for trading permits that provide
differential access as long as the same
access fee is assessed to all Holders of
the same type of Trading Permit. The
Exchange notes that different types of
Trading Permits during RTH are also
assessed different amounts.22
The Exchange believes the proposed
Bandwidth Packet fees are reasonable
because they are within the range of the
cost of Bandwidth Packet fees during
RTH. The Exchange believes it is
equitable and not unfairly
discriminatory to charge lower fees for
Bandwidth Packets during ETH than
RTH because ETH is a new trading
session and the Exchange seeks to
encourage market participants to
participate in ETH. The Exchange also
believes it is equitable to assess different
fees for different types of Bandwidth
Packets as long as the same access fee
is assessed to all Holders of the same
type of Bandwidth Packet. Additionally,
the Exchange believes it is equitable to
assess higher Quoting and Order
Bandwidth Packet fees than Order
Bandwidth Packet fees, because Quoting
and Order Bandwidth Packets provide
quoting bandwidth in addition to order
bandwidth. The Exchange notes that
different types of Bandwidth Packets
during RTH are also assessed different
amounts.23 Finally, the Exchange
believes amending the Fees Schedule to
clarify that the maximum quoting
bandwidth allowance of each MarketMaker Trading Permit is over the course
of a trading session, instead of a trading
day alleviates confusion, thereby
removing impediments to and
22 See e.g., Exchange Fees Schedule, Trading
Permit Fees. Market-Maker Trading Permits during
RTH are assessed $5,500 per month per permit
while Electronic Access Permits during RTH are
assessed $1,600 per month per permit.
23 See e.g., Exchange Fees Schedule, Bandwidth
Packet Fees.
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perfecting the mechanism of a free open
market and a national market system,
and, in general, protect investors and
the public interest.
The Exchange believes waiving ETH
Trading Permit and Bandwidth Packet
fees for one of each type of Trading
Permit and Bandwidth Packet, per
affiliated TPH through August 31, 2015
is reasonable, equitable and not unfairly
discriminatory, because it promotes and
encourages trading during the ETH
session and applies to all ETH TPHs.
The Exchange believes the proposed
monthly fee of $10,000 for each extra
CMI CAS Server that a TPH requests is
reasonable because it is necessary to
recoup the costs related to the
provision, maintenance and upkeep of
such Servers, and is equitable and not
unfairly discriminatory because the fee
will be applied to all TPHs that request
an extra CMI CAS Server to be used
during ETH. Additionally, TPHs during
RTH that request an additional CMI
CAS Server are assessed the same
monthly amount.
The Exchange believes it is reasonable
to apply the Network Access Port fees
to the ETH session because the
Exchange has expended significant
resources setting up, providing and
maintaining this connectivity and the
Exchange seeks to recoup those costs.
The Exchange believes it’s reasonable,
equitable and not unfairly
discriminatory to assess these costs per
port regardless of session (i.e., not assess
a TPH twice if using the same port for
RTH and ETH), as the costs associated
with using the port do not increase if a
TPH uses that port for both sessions.
Similarly, the Exchange believes it is
reasonable, equitable, and not unfairly
discriminatory to assess the same
PULSe fees to the ETH session, but not
charge a TPH twice if using the same
PULSe login ID for both sessions,
because the Exchange expended
significant resources developing PULSe
and desires to recoup some of those
costs, but does not wish to charge TPHs
twice if using the same login ID.
The Exchange believes assessing the
CMI Login ID and FIX Login ID fees to
Login IDs for ETH is reasonable because
the fee amounts are the same as in RTH.
The Exchange believes it’s equitable and
not unfairly discriminatory because all
TPHs will be assessed the Login ID fees
for each Login ID they have for both
RTH and ETH. The Exchange believes
it’s reasonable, equitable and not
unfairly discriminatory to waive fees for
Login IDs related to waived Trading
Permits and/or Bandwidth Packets in
order to promote and encourage initial
participation in ETH.
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The Exchange believes it’s reasonable
to assess a $0.0025 fee per contract side
for each matched trade because the
same fee amount is assessed during
RTH. The Exchange believes it’s
equitable and not unfairly
discriminatory to assess such fee
because it applies to all TPHs and
applies in both RTH and ETH.
The proposed ORF during the ETH
session is reasonable, equitable and not
unfairly discriminatory because it is the
same amount assessed during the RTH
session. The Exchange believes the ORF
is equitable and not unfairly
discriminatory in that it is charged to all
TPHs during both sessions on all their
transactions that clear in the customer
range at the OCC. Moreover, the
Exchange believes the ORF ensures
fairness by assessing higher fees to those
TPHs that require more Exchange
regulatory services based on the amount
of customer options business they
conduct in each trading session.
Regulating customer trading activity is
much more labor intensive and requires
greater expenditure of human and
technical resources than regulating noncustomer trading activity, which tends
to be more automated and less laborintensive. As a result, the costs
associated with administering the
customer component of the Exchange’s
overall regulatory program are
materially higher than the costs
associated with administering the noncustomer component (e.g., Trading
Permit Holder proprietary transactions)
of its regulatory program.24
Having Trading Permit Holder
Application fees, Web CRD fees Trading
Permit Holder Transaction Fee Policies
and Rebate Programs apply the same in
ETH as RTH is reasonable, equitable and
not unfairly discriminatory because the
fees, rebates and programs are the same
in both sessions and are based on a
market participant’s status as a TPH and
not based upon which trading session a
TPH participates.
Not applying in ETH fees, rebates and
programs that exclude SPX, SPXW and
VIX during RTH is reasonable because
these fees rebates and programs will not
apply to all TPHs and will be consistent
across sessions.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule changes will impose
any burden on competition that are not
24 If the Exchange changes its method of funding
regulation or if circumstances otherwise change in
the future, the Exchange may decide to modify the
ORF or assess a separate regulatory fee on Trading
Permit Holder proprietary transactions if the
Exchange deems it advisable.
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necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange 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 and rebates
are assessed to different market
participants in some circumstances,
these different market participants have
different obligations and different
circumstances. For example, Clearing
TPHs 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 proposed fees,
rebates and programs for ETH are
intended to encourage market
participants to bring liquidity to the
Exchange during ETH (which benefits
all market participants), while still
covering Exchange costs (including
those associated with the upgrading and
maintenance of Exchange systems). The
Exchange does not believe that the
proposed rule changes will impose any
burden on intermarket competition that
is not necessary or appropriate in
furtherance of the purposes of the Act
because the products offered during
ETH (SPX, SPXW and VIX), are
proprietary products that will only be
traded 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.
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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.
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 25 and paragraph (f) of Rule
19b–4 26 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
25 15
26 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
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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–2015–020 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549.
All submissions should refer to File
Number SR–CBOE–2015–020. 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
PO 00000
Frm 00071
Fmt 4703
Sfmt 4703
12687
should refer to File Number SR–CBOE–
2015–020 and should be submitted on
or before March 31, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
Brent J. Fields,
Secretary.
[FR Doc. 2015–05476 Filed 3–9–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74440; File No. SR–
NYSEMKT–2014–116]
Self-Regulatory Organizations; NYSE
MKT LLC; Order Granting Approval of
a Proposed Rule Change, as Modified
by Amendment No. 1, To Amend Rule
967NY and To Adopt Rule 967.1NY To
Provide Price Protection for Market
Maker Quotes
March 4, 2015.
I. Introduction
On December 29, 2014, NYSE MKT
LLC (‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend Exchange Rule 967NY (Price
Protection) and to adopt Exchange Rule
967.1NY to provide price protection for
Market Maker quotes. The proposed rule
change was published for comment in
the Federal Register on January 14,
2015.3 The Commission received no
comment letters on the proposal. On
March 2, 2015, the Exchange filed
Amendment No. 1 to the proposed rule
change.4 This order approves the
proposed rule change, as modified by
Amendment No. 1 thereto.
II. Description of the Proposal
The Exchange proposed to amend
Exchange Rule 967NY and to adopt
Exchange Rule 967.1NY to provide price
protection for Market Maker quotes.
Exchange Rule 967NY currently applies
27 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 74017
(January 8, 2015), 80 FR 1979 (‘‘Notice’’).
4 In Amendment No. 1, the Exchange clarified
that it believes that Market Maker bids should not
be priced the same as or higher than the
corresponding benchmark, which would be the
price of the underlying security for call options and
the strike price for put options. Amendment No. 1
does not change any of the proposed rule text that
was submitted in the original filing. Amendment
No. 1 is technical in nature and, therefore, the
Commission is not publishing it for comment.
1 15
E:\FR\FM\10MRN1.SGM
10MRN1
]]>Agencies
[Federal Register Volume 80, Number 46 (Tuesday, March 10, 2015)]
[Notices]
[Pages 12680-12687]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-05476]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74422; File No SR-CBOE-2015-020]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Its Fees Schedule To Adopt Fees for
Extended Trading Hours
March 4, 2015.
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 February 18, 2015, 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 Substance
of the Proposed Rule Change
The Exchange proposes to adopt fees for its Extended Trading Hours
session. 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
[[Page 12681]]
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 recently amended its rules to offer trading in two
exclusively listed options (SPX, including SPXW, and VIX) during
extended trading hours from 2:00 a.m. to 8:15 a.m. Chicago time Monday
through Friday (``Extended Trading Hours'' or ``ETH''). The Exchange
intends to commence trading in the ETH session on Monday, March 2, 2015
for VIX and Monday, March 9, 2015 for SPX/SPXW. As such, the Exchange
proposes to establish fees for the trading of SPX, SPXW and VIX options
during ETH (all fees referenced herein are per-contract unless
otherwise stated). First, the Exchange proposes to adopt Footnote 37,
which provides general information regarding the two trading sessions
and indicates which products will be available in ETH.
Transaction Fees
The Exchange proposes to assess the same fees regarding SPX, SPXW
and VIX in the ETH session as are assessed regarding SPX, SPXW and VIX
in the Regular Trading Hours session (``RTH'') \3\ (with a few
exceptions, which shall be explained herein). As in RTH, the
Proprietary Index Options Rate Table will apply during ETH. Transaction
fees for SPX (including SPXW) options will be as follows (all listed
rates are per contract):
---------------------------------------------------------------------------
\3\ Rule 1.1(qqq) defines ``Regular Trading Hours'' as the hours
during which transactions in options may be made on the Exchange as
set forth in Rule 6.1 (which hours are from 8:30 a.m. to either.
3:00 p.m. or 3:15 p.m. Chicago time).
------------------------------------------------------------------------
------------------------------------------------------------------------
Customer (Premium > or = $1)................................... $0.44
Customer (Premium <$1)......................................... 0.35
Clearing Trading Permit Holder Proprietary..................... 0.25
CBOE Market-Maker/LMM.......................................... 0.20
Joint Back-Office, Broker-Dealer, Non-Trading Permit Holder 0.40
Market-Maker..................................................
Professional/Voluntary Professional (Premium > or = $1)........ 0.40
Professional/Voluntary Professional (Premium <$1).............. 0.40
------------------------------------------------------------------------
Transaction fees for VIX options will be as follows (all listed
rates are per contract):
------------------------------------------------------------------------
------------------------------------------------------------------------
Customer (Premium > or = $1)................................... $0.48
Customer (Premium $0.11-$.99).................................. 0.27
Customer (Premium <$0.11)...................................... 0.10
Clearing Trading Permit Holder Proprietary..................... 0.25
CBOE Market-Maker/LMM (Premium > or = $0.11)................... 0.23
CBOE Market-Maker/LMM (Premium <$0.11)......................... 0.05
Joint Back-Office, Broker-Dealer, Non-Trading Permit Holder 0.40
Market-Maker..................................................
Professional/Voluntary Professional............................ 0.40
------------------------------------------------------------------------
Surcharges
The Exchange also proposes to apply in ETH, like RTH, an Index
License Surcharge Fee of $0.13 per contract for SPX options, including
SPXW, and $0.10 per contract for VIX options for all non-customer
orders. The surcharges are assessed to help the Exchange recoup license
fees the Exchange pays to index licensors for the right to list S&P 500
Index-based products and volatility index options for trading.
Additionally, in order to have consistency and to avoid a cost
differential between the ETH and RTH sessions, the Exchange proposes to
apply the Customer Priority Surcharges for VIX and SPXW in ETH.
Specifically, as in RTH, all customer (C) contracts in VIX that have a
premium of $0.11 or greater, are executed electronically and that are
Maker non-Turner will be assessed a $0.10 surcharge.\4\ As in RTH, all
customer (C) contracts in SPXW executed electronically will be assessed
a $0.05 surcharge. The Exchange notes that as ETH opening trades will
not affect the Index Settlement price for VXST, the exception from the
SPXW Customer Priority Surcharge in RTH for SPXW options in the SPXW
electronic book that are executed during opening rotation on the final
settlement day of VXST options and futures and which have the
expiration that contribute to the VXST settlement calculation will not
exist in ETH.
---------------------------------------------------------------------------
\4\ As of the date of this filing, the Customer Priority
Surcharge for VIX is waived for complex orders. This waiver will
also apply during ETH and will remain in effect until and unless a
rule filing is submitted reinstating the surcharge for VIX complex
orders. See Exchange Fees Schedule, Customer Priority Surcharge.
---------------------------------------------------------------------------
Exceptions
All of the proposed transaction fees and surcharges listed above
are the same amounts as those currently assessed for SPX, SPXW and VIX
during RTH, with certain exceptions. The first exception relates to
Professional/Voluntary Professional (``W'' origin code) fees.\5\
Particularly, the Exchange notes that SPX is traded on the Exchange's
Hybrid 3.0 system (``Hybrid 3.0'') during RTH, and the Professional and
Voluntary Professional designation is not available in Hybrid 3.0
classes. As such, Professionals and Voluntary Professionals trading SPX
are currently assessed the same fee amounts as customers during RTH.
During ETH however, SPX will be traded on the Hybrid Trading System
(``Hybrid''), which recognizes the difference between Professionals/
Voluntary Professionals and Customers. Accordingly, the Exchange
proposes to assess to Professionals/Voluntary Professionals the same
fee amount for SPX transactions during ETH as apply to the majority of
other proprietary index options trading on Hybrid (i.e., $0.40 per
contract). The Exchange also proposes to assess the Index License
Surcharge to SPX orders with the ``W'' origin code during ETH.
---------------------------------------------------------------------------
\5\ See Exchange Fees Schedule, Proprietary Index Options Rate
Table--Underlying Symbol List A.
---------------------------------------------------------------------------
In order to have consistency between the two trading sessions, the
Exchange also proposes to provide that SPX orders that have a
Professional/Voluntary Professional designation (``W'' origin code)
during RTH will be assessed the same transaction fees as apply to the
other Underlying Symbol List A \6\ Products (i.e., $0.40 per contract).
The Exchange also proposes to apply the Index License Surcharge to SPX
orders that have a Professional/Voluntary Professional designation
during RTH (i.e., $0.13 per contract). The purpose of these proposed
rule changes is to minimize cost differentials between the two trading
sessions, as well as provide consistent fees for similar products.
Specifically, similarly situated Trading Permit Holders (``TPHs'')
(i.e., Professional/Voluntary Professionals) will be assessed the same
transaction fees and Index License Surcharges regardless of session.
---------------------------------------------------------------------------
\6\ As of the date of this filing, ``Underlying Symbol List A''
consists of OEX, XEO, SPX (including SPXW), SPXpm, SRO, VIX, VXST,
Volatility Indexes and binary options.
---------------------------------------------------------------------------
Next, the Exchange notes that during RTH, the Automated Improvement
Mechanism (``AIM'') is activated for VIX options, but not SPX (or SPXW)
options. During ETH however, AIM will be activated for both VIX and SPX
(including SPXW) options. As such, SPX and SPXW transactions executed
via AIM during ETH will be assessed AIM Agency/Primary and AIM Contra
fees based on an order's origin code. As in RTH, the current AIM
Agency/Primary and AIM Contra fees for VIX options will apply during
ETH. The Exchange also proposes to make a minor, non-substantive change
to the title of the AIM fees column.
[[Page 12682]]
Particularly, the Exchange notes that throughout the Fees Schedule,
when listing proprietary products, ``VIX'' generally precedes ``VXST.''
To remain consistent, the Exchange proposes switching the order of
these products in the AIM fees column.
The Exchange next notes that the Hybrid 3.0 Execution Surcharge
will not apply in ETH. As described above, while SPX is traded on
Hybrid 3.0 during RTH, SPX will be traded on Hybrid during ETH, and
thus the Hybrid 3.0 Execution Surcharge would not be applicable.
Additionally, the Exchange notes that as the ETH session will not
support trading in FLEX options, all fees relating to FLEX in RTH,
would not apply in ETH. Finally, unlike RTH, the Exchange does not
propose to assess a Tier Appointment Fee \7\ to SPX/SPXW or VIX at this
time, as the Exchange does not want to discourage Market-Makers from
participating in ETH.
---------------------------------------------------------------------------
\7\ See Exchange Fees Schedule, Trading Permit and Tier
Appointment Fees Table.
---------------------------------------------------------------------------
LMM Rebate
In the filing that adopted Extended Trading Hours, CBOE stated that
it would submit a separate rule filing to adopt all fees applicable to
Extended Trading Hours, including the amount of a rebate to be provided
to Lead Market-Makers (``LMMs'') that satisfy a heightened quoting
standard.\8\ Accordingly, the Exchange proposes to provide that LMM's
that meet a certain heightened quoting standard (which shall be
explained herein), will receive a pro-rata share of a ``compensation
pool'' equal to $25,000 times the number of LMMs in that class.
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 34-73704 (November
28, 2014), 79 FR 233 (December 4, 2014) (SR-CBOE-2014-062).
---------------------------------------------------------------------------
By way of background, pursuant to subparagraph (e)(iii)(A) of Rule
6.1A, the Exchange may approve one or more Market-Makers to act as LMMs
in each class during Extended Trading Hours in accordance with Rule
8.15A for terms of at least one month.\9\ However, to the extent the
Exchange approves Market-Makers to act as LMMs during ETH, subparagraph
(e)(iii)(B) of Rule 6.1A provides that LMMs must comply with the
continuous quoting obligation and other obligations of Market-Makers
described in subparagraph (ii) of Rule 6.1A,\10\ but not the
obligations set forth in Rule 8.15A \11\ during Extended Trading Hours
for their allocated classes. It further provides that LMMs do not
receive a participation entitlement as set forth in Rules 6.45B and
8.15B during ETH. Rather, pursuant to subparagraph (e)(iii)(C) of Rule
6.1A, if an LMM (1) provides continuous electronic quotes in at least
the lesser of 99% of the non-adjusted series or 100% of the non-
adjusted series minus one call-put pair in an ETH allocated class
(excluding intra-day add-on series on the day during which such series
are added for trading) during ETH in a given month and (2) ensures an
opening of the same percentage of series by 2:05 a.m. for at least 90%
of the trading days during ETH in a given month, the LMM will receive a
rebate for that month in an amount to be set forth in the Fees
Schedule.\12\ Specifically, the Exchange proposes to provide in the
Fees Schedule (new Footnotes 38) that if a LMM meets the heightened
standard described above, the LMM will receive a pro-rata share of an
LMM compensation pool totaling an amount of $25,000 per month, per LMM,
per class. To clarify how the rebate will work, the Exchange proposes
to include in the Fees Schedule the following example: ``if three LMMs
are appointed in SPX, a compensation pool will be established each
month totaling $75,000. If each LMM meets the heightened continuous
quoting standard in SPX during a month, each will receive $25,000. If
two LMM's meet the heightened continuous quoting standard in SPX during
a month, those two LMM's would each receive $37,500 and the third LMM
would receive nothing. If only one LMM meets the heightened continuous
quoting standard in SPX during a month, that LMM would receive $75,000
and the other two would receive nothing.''
---------------------------------------------------------------------------
\9\ On September 22, 2014, the Exchange issued Regulatory
Circular RG14-134 which announced that the Exchange had appointed 3
LMMs in SPX options and 3 LMMs in VIX options during ETH. The LMM
appointments will be effective for a one-year period, beginning on
the launch date for ETH trading of the applicable class.
\10\ Rule 6.1A(e)(ii) provides that notwithstanding the 20%
contract volume requirement in Rule 8.7(d)(ii), Market-Makers with
appointments during Extended Trading Hours must comply with the
quoting obligations set forth in Rule 8.7(d)(ii) (except during ETH
the Exchange may determine to have no bid/ask differential
requirements as set forth in subparagraph (A) and there will be no
open outcry quoting obligation as set forth in subparagraph (C)) and
all other obligations set forth in Rule 8.7 during that trading
session. Additionally, notwithstanding the 90-day and next calendar
quarter delay requirements in Rule 8.7(d), a Market-Maker with an
ETH appointment in a class must immediately comply with the quoting
obligations in Rule 8.7(d)(ii) during ETH.
\11\ Rule 8.15A (and Rule 1.1(ccc)) requires LMMs to provide
continuous electronic quotes in at least the lesser of 99% of the
non-adjusted series or 100% of the non-adjusted series minus one
call-put pair within their appointed classes, with the term call-put
pair referring to one call and one put that cover the same
underlying instrument and have the same expiration date and exercise
price, for 90% of the time.
\12\ Notwithstanding Rule 1.1(ccc), for purposes of subparagraph
(C) of Rule 6.1A, an LMM is deemed to have provided ``continuous
electronic quotes'' if the LMM provides electronic two-sided quotes
for 90% of the time during Extended Trading Hours in a given month.
If a technical failure or limitation of a system of the Exchange
prevents the LMM from maintaining, or prevents the LMM from
communicating to the Exchange, timely and accurate electronic quotes
in a class, the duration of such failure shall not be considered in
determining whether the LMM has satisfied the 90% quoting standard
with respect to that option class. The Exchange may consider other
exceptions to this quoting standard based on demonstrated legal or
regulatory requirements or other mitigating circumstances.
---------------------------------------------------------------------------
In establishing the rebate, the Exchange believed it was more
fitting to implement an incentive program with a rebate during ETH,
rather than the obligation/benefit structure that currently exists
during RTH. LMMs will not be obligated to satisfy heightened continuous
quoting and opening quoting standards during ETH. Instead, LMMs must
satisfy a heightened standard to receive a rebate, which the Exchange
believes will encourage LMMs to provide significant liquidity during
ETH. Additionally, the Exchange notes that it expects that TPHs may
need to undertake significant expenses to be able to quote at a
significantly heightened standard during ETH, such as performing system
work and adding personnel. The Exchange believes providing a rebate
will incent appointed LMMs to increase liquidity during ETH, as the
rebate could offset the costs that accompany providing quotes during
ETH.
CBOE Proprietary Products Sliding Scale
Next, the Exchange proposes to apply the CBOE Proprietary Products
Sliding Scale in ETH. The CBOE Proprietary Products Sliding Scale table
provides that Clearing Trading Permit Holder Proprietary transaction
fees and transaction fees for Non-Clearing Trading Permit Holder
Affiliates in Underlying Symbol List A \13\ are reduced provided a
Clearing Trading Permit Holder (``Clearing TPH'') reaches certain
average daily volume (``ADV'') thresholds in all underlying symbols
excluding Underlying Symbol List A and mini-options on the Exchange in
a month. The Exchange proposes to provide that if a TPH reaches these
thresholds in RTH, that TPH would be entitled to reduced proprietary
transaction fees during both RTH and ETH. Specifically, if a TPH meets
the ADV thresholds in all underlying symbols excluding Underlying
Symbol
[[Page 12683]]
List A and mini-options, the Exchange would then calculate the
proprietary product volume thresholds by aggregating VIX and SPX/SPXW
volume in ETH with RTH volume in Underlying Symbol List A (i.e., a
TPH's total volume in Underlying Symbol List A during both RTH and ETH
in a calendar month would be divided by the total volume in Underlying
Symbol List A executed with an ``F'' or ``L'' origin code during both
RTH and ETH in the same calendar month).\14\ The Exchange proposes to
apply the Proprietary Products Sliding Scale during ETH in order to
avoid a cost differential between the two sessions. Additionally, the
Exchange believes applying the CBOE Proprietary Products Sliding Scale
to the ETH session will encourage Clearing TPHs to provide liquidity
during ETH.
---------------------------------------------------------------------------
\13\ SROs are currently excluded from the CBOE Proprietary
Products Sliding Scale. See Exchange Fees Schedule, CBOE Proprietary
Products Sliding Scale.
\14\ For example, Clearing Trading Permit Holder A executes ADV
of 25,000 options contracts on CBOE across all classes excluding
Underlying Symbol List A and Mini-Options during RTH in March 2015.
Clearing Trading Permit Holder A also executes a total of 600,000
Firm (F or L origin code) contracts in Underlying Symbol List A
during RTH and 200,000 Firm (F or L origin code) contracts in SPX
and/or VIX during ETH in March 2015. In March 2015, 7,605,000 total
Firm (F or L origin code) options contracts in Underlying Symbol
List A are executed on CBOE during RTH and 4,095,000 total Firm (F
or L origin code) options contracts in SPX and VIX are executed
during ETH (for a monthly total of 11,700,000 Firm contracts).
Clearing Trading Permit Holder A's total 800,000 contracts
represents 6.84% of the total monthly Firm (F or L origin code)
options contracts volume in Underlying Symbol List A. Trading Permit
Holder A's transaction fees for classes in Underlying Symbol List A
for January 2015 are $0.20 per contract on the first 760,500
contracts (6.50% x 11,700,000), or $152,100, and $0.10 per contract
on the remaining 39,500 contracts, or $3,950, for a total of
$156,050, or $0.195/contract.
---------------------------------------------------------------------------
Customer Large Trade Discount
The Customer Large Trade Discount program (the ``Discount'')
provides a discount in the form of a cap on the quantity of customer
(``C'' origin code'') contracts that are assessed transactions fees in
certain options classes. The Discount table currently in the Fees
Schedule sets forth the quantity of contracts necessary for a large
customer trade to qualify for the Discount, which varies by product.
Currently, under the ``Products'' section in the Discount table, the
following S&P products for which the Discount is in effect are listed:
``SPX, SPXw, SPXpm, SRO.'' Customer transaction fees for each of these
products are currently charged up to the first 15,000 contracts in a
qualifying customer transaction. Additionally, the Fees Schedule
currently provides that regular customer transaction fees will only be
assessed for the first 10,000 VIX options contracts in a qualifying
customer transaction. The Exchange proposes to apply the Discount in
ETH, the same as RTH. The Exchange notes however, that as the trading
sessions will have separate order books and require separate logins for
access, and as there will be no ``rolling'' of orders by the Exchange
between the two sessions, in order to be eligible to qualify for the
Discount, an order must be executed in its entirety in either RTH or
ETH, but not partly in both. As in many cases there will be separate
personnel staffing the ETH and RTH sessions, with different logins,
different systems and different customer relationships, and as orders
entered into each session will have different Order Routing System
(ORS) IDs, and as there will be no Floor Broker participants in ETH
who, during a normal RTH session may need to execute a large and/or
complex order using different means and mechanisms, the Exchange does
not wish to offer a cross-session Discount program at this time.
Trading Permits
The Exchange next seeks to set forth the access fees for ETH
Trading Permit types as well as a description of each Trading Permit
type. Specifically, the Exchange proposes to charge $1,000 per month
for each ETH Market-Maker Trading Permit and $500 per month for each
ETH Electronic Access Trading Permit. The ETH Market-Maker Trading
Permit will entitle the holder to act as a Market-Maker in ETH and will
provide an appointment credit of 1.0, a quoting and order entry
bandwidth allowance, and up to three logins. The ETH Electronic Access
Permit will entitle the holder to electronic access to the Exchange
during the ETH session. The Exchange notes that as during the RTH
session, holders of an ETH Electronic Access Permit must be broker-
dealers registered with the Exchange in one or more of the following
capacities: (a) Clearing Trading Permit Holder; (b) TPH organization
approved to transact business with the public; and (c) Proprietary
Trading Permit Holder. Additionally, the Exchange notes that a
Proprietary Trading Permit Holder is a Trading Permit Holder with
electronic access to the Exchange to submit proprietary orders that are
not Market-Maker orders (i.e., that are not M orders for the
Proprietary Trading Permit Holder's own account or an affiliated
Market-Maker account). Finally, the ETH Electronic Access Permit
provides an order entry bandwidth allowance and up to three logins. The
Exchange notes, that similar to RTH, Trading Permits purchased for the
ETH session will be renewed automatically for the next month unless the
Trading Permit Holder submits written notification to the Registration
Services Department by 4:00 p.m. Central Standard Time on the second-
to-last business day of the prior month to cancel the Trading Permit
effective at or prior to the end of the applicable month. Additionally,
if a Trading Permit is issued during a calendar month after the first
trading day of the month, the access fee for the ETH Trading Permit for
that calendar month is prorated based on the remaining trading days in
the calendar month. Finally, the Exchange notes that as in RTH, Market-
Maker Trading Permits in ETH will not be eligible for the the Market-
Maker Trading Permit Sliding Scale, as the scale does not apply to
Trading Permits used for appointments in SPX/SPXW and VIX.\15\
---------------------------------------------------------------------------
\15\ See Exchange Fees Schedule, Market-Maker Trading Permit
Sliding Scale.
---------------------------------------------------------------------------
Bandwidth Packets
The Exchange also proposes to establish fees for Bandwidth Packets
that may be used during ETH. By way of background, each RTH and ETH
Trading Permit entitles the holder to a maximum number of orders and
quotes per second(s) as determined by the Exchange. Bandwidth Packets
provide TPHs with additional bandwidth. As during RTH, Market-Makers in
ETH will be provided the opportunity to purchase one or more Quoting
and Order Entry Bandwidth Packets. Each Quoting and Order Entry
Bandwidth Packet will entitle the TPH up to three additional logins and
contain the standard Market-Maker quoting and order entry bandwidth
allowance, which may then be added onto the total bandwidth pool for a
Market-Maker's acronym(s) and ETH Trading Permit(s) without the Market-
Maker having to obtain additional ETH Trading Permits. Additionally,
all TPHs will have the opportunity to purchase one or more Order Entry
Bandwidth Packets. Each Order Entry Bandwidth Packet will entitle the
TPH up to three additional logins and an order entry bandwidth
allowance to use during the ETH session. The Exchange notes that
Bandwidth Packets purchased for RTH may not be applied during ETH and
Bandwidth Packets purchased for ETH may not be applied during RTH.
Similar to RTH, Bandwidth Packets purchased for the ETH session will be
renewed automatically for the next month unless the Trading Permit
Holder submits written notification to the Registration Services
Department by the last business day of the prior month to cancel the
bandwidth packet effective at or prior to the end of the applicable
[[Page 12684]]
month. Additionally, as in RTH, if a bandwidth packet is issued during
a calendar month after the first trading day of the month, the
bandwidth packet fee for that calendar month is prorated based on the
remaining trading days in the calendar month. The Exchange notes that a
TPH will only be able to request Bandwidth Packets during RTH. To
request an additional Bandwidth Packet, a TPH must submit the ETH
Trading Permit & Bandwidth Packet Additions/Removals form indicating
the date on which it intends to begin trading during ETH.
Additionally, the Exchange notes that the Fees Schedule states that
the quoting bandwidth allowance for a Market-Maker Trading Permit is
equivalent to a maximum of 35,640,000 quotes over the course of a
trading day. The Exchange intends to amend the Fees Schedule to clarify
that quoting bandwidth allowance for a Market-Maker Trading Permit is
equivalent to a maximum of 35,640,000 quotes over the course of a
trading session (i.e., a RTH and ETH Market-Maker Trading Permit each
have a quoting bandwidth allowance of 35,640,000 quotes over the course
of the RTH and ETH session, respectively).
Waiver of Trading Permit and Bandwidth Packet Fees
In order to promote and encourage trading during the ETH session,
the Exchange proposes to waive ETH Trading Permit and Bandwidth Packet
fees for one (1) of each initial Trading Permits and one (1) of each
initial Bandwidth Packet, per affiliated TPH, through the first six (6)
calendar months immediately following the implementation of ETH,
including the month ETH is launched (i.e., August 31, 2015). Any
Trading Permits and Bandwidth Packets purchased in excess of one each,
will be assessed the fees described above.
Extra CAS Server Fees
In order to connect to CBOE Command, which will allow a TPH to
trade on the CBOE System during ETH, a TPH must connect via either a
CMI or FIX interface (depending on the configuration of the TPH's own
systems). TPHs that connect via a CMI interface must use CMI CAS
Servers. The Exchange proposes to provide that each TPH in ETH will
receive one CAS Server (plus access to a pool of shared backup CAS
Servers). If a TPH elects to connect via an extra CMI CAS Server (in
order to segregate TPH users for business or availability purposes)
beyond the one CAS server, the Exchange proposes to provide that the
TPH will be assessed a fee of $10,000 per month for each additional CMI
CAS Server. The purpose of the fee for extra CMI CAS Servers is to
cover the costs related to the provision, management and upkeep of such
CMI CAS Servers for the ETH session. Additionally, the proposed change
prevents the Exchange from being required to expend large amounts of
resources (the provision and management of the CMI CAS Servers can be
costly) in order to provide TPHs with an unlimited amount of CMI CAS
Servers.
CBOE Command Connectivity Charges
By way of background, CBOE market participants can access the
Exchange's trading systems via Network Access Ports, and can elect for
a Network Access Port (or Ports) of either 1 gigabit per second
(``Gbps'') or 10 Gbps. Currently, the Exchange assesses a fee of $750
per month for a 1 Gbps Network Access Port and a fee of $3,500 per
month for a 10 Gbps Network Access Port. The Exchange notes that these
fees would also be applicable to a TPH that holds an ETH Trading
Permit. More specifically, if a TPH that holds an ETH Trading Permit,
also holds an RTH Trading Permit(s) and already is assessed this fee,
it would not be charged twice. A TPH that holds only an ETH Trading
Permit (or only an RTH Trading Permit) would be subject to these fees
(i.e., any Trading Permit Holder that accesses the exchange via Network
Access Ports would be subject to the fee).
Additionally, the CMI Login ID and FIX Login ID fees, which are
currently $500 per Login ID, per month, will also be applicable to ETH.
However, the Exchange notes that the fees related to waived ETH trading
permits and/or waived ETH bandwidth packets will also be waived through
August 31, 2015.\16\
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\16\ For example, if a TPH has 2 ETH Market-Maker Trading
Permits and enables 5 logins, the CMI and/or FIX Login IDs for the
first 3 logins will be waived and the TPH will be assessed $1,000
per month for the logins associated with the second Trading Permit
($500 per login).
---------------------------------------------------------------------------
PULSe Fees
The Exchange currently charges a fee of $400 per month per PULSe
TPH login ID for the first 15 login IDs and $100 per month for all
subsequent login IDs. The Exchange anticipates making PULSe available
during ETH. The Exchange notes that these fees would also be applicable
to a TPH during ETH. Particularly, if a TPH is already being assessed
the PULSe login ID fees during RTH, the TPH would not be charged again
for using the same login ID during ETH.
Miscellaneous Fees
The Exchange notes that a number of fees apply the same in ETH as
in RTH. For example, the fees set forth in the Trading Permit Holder
Application Fees table are applicable for the ETH session (i.e., if a
non-CBOE TPH seeks to become a CBOE TPH and hold an ETH Trading Permit
only, the applicable application fees would apply). Similarly, Web CRD
Fees would also apply to TPHs that hold ETH Trading Permits only to the
extent applicable. The Trading Permit Holder Transaction Fee Policies
and Rebate Programs table in the Fees Schedule will also apply during
ETH.\17\
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\17\ See Exchange Fees Schedule, Trading Permit Holder
Transaction Fee Policies and Rebate Programs table.
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The Trade Processing Services fee will also be assessed during the
ETH session. Currently, the Exchange assesses a $0.0025 fee per
contract side for each matched trade. The Exchange notes that the
Regulatory Fees also are applicable to TPHs who hold ETH Trading
Permits. Specifically, the Options Regulatory Fee (``ORF'') will
include options transactions executed or cleared by the TPH that are
cleared by the Options Clearing Corporation (OCC) in the customer range
during both RTH and ETH. The ``DPM's and Firm Designated Examining
Authority Fee'' will also continue to apply to applicable TPHs.
The Exchange lastly notes that fees, rebates and programs that
excluded SPX, SPXW and VIX during RTH will also not apply in ETH.\18\
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\18\ See e.g., Exchange Fees Schedule, Liquidity Provider
Sliding Scale, Marketing Fee, Clearing Trading Permit Holder Fee
Cap, and Volume Incentive Program (``VIP'').
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The proposed changes are to take effect on March 2, 2015.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\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
[[Page 12685]]
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.
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\19\ 15 U.S.C. 78f(b).
\20\ 15 U.S.C. 78f(b)(5).
\21\ 15 U.S.C. 78f(b)(4).
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The proposed transaction fee amounts for SPX, SPXW and VIX orders
during the ETH session are reasonable, equitable and not unfairly
discriminatory because they are the same as the amounts of
corresponding fees for SPX, SPXW and VIX orders during the RTH session,
with the exception of the current Professional and Voluntary
Professional fees and AIM Agency/Primary and Contra fees. The Exchange
notes that the fee amounts for each separate type of market participant
will be assessed equally for each product to all such market
participants (i.e., all Broker-Dealer orders will be assessed the same
amount, all Joint Back-Office orders will be assessed the same amount,
etc.). The Exchange believes it's reasonable, equitable and not
unfairly discriminatory to assess Professional/Voluntary Professionals
the same fee amounts, including the Index License Surcharge Fee, for
SPX transactions during ETH as apply to the majority of other
proprietary index options trading on Hybrid (including SPXW), because
unlike RTH, SPX will trade on Hybrid and the Professional and Voluntary
Professional designation exists on Hybrid. The Exchange also believes
it's reasonable, equitable and not unfairly discriminatory to assess
the same fee amounts, including the Index License Surcharge Fee, for
SPX transactions with a Professional/Voluntary Professional designation
during RTH as apply to the majority of other proprietary index options,
because it provides for consistent fees for similar products, as well
as avoids a cost differential between the two trading sessions (i.e.,
orders with a ``W'' origin code will be treated the same during RTH and
ETH). Applying the AIM Agency/Primary and Contra Fees to SPX and SPXW
orders in RTH is reasonable, equitable and not unfairly discriminatory
because the amount of the AIM Agency/Primary and Contra fees will be
the same for SPX and SPXW orders as it is for non-AIM Agency/Primary
and Contra orders and because unlike, RTH, AIM will be active in SPX
and SPXW during ETH. Not applying any RTH fees related to FLEX options
in ETH is reasonable, equitable and not unfairly discriminatory because
ETH will not support trading in FLEX options.
Assessing the Index License Surcharge Fee of $0.13 per contract to
SPX and SPXW and $0.10 per contract to VIX transactions during ETH is
reasonable because the amounts are the same as the amounts of the
corresponding surcharge for SPX, SPXW and VIX orders during RTH. The
Surcharge fees are equitable and not unfairly discriminatory because
they will be assessed to all market participants to whom the SPX, SPXW
and VIX Surcharges apply and will apply in both RTH and ETH. Similarly,
assessing the Customer Priority Surcharge of $0.05 per contract for
SPXW and $0.10 per contract for VIX options that are Maker, non-Turner
during ETH is also reasonable, equitable and not unfairly
discriminatory because the surcharges are the same as the amounts of
the Customer Priority Surcharges during RTH and will be assessed to all
market participants to whom these surcharges apply. Additionally the
Customer Priority Surcharges for SPXW and VIX will apply in both RTH
and ETH.
Not applying the SPX/SPXW and VIX Tier Appointment Fees as well as
the Hybrid 3.0 Execution Fee is reasonable because market participants
involved in the trading of SPX, SPXW and VIX will not have to pay such
fees. Particularly, not applying Tier Appointment Fees during ETH, as
compared to RTH is equitable and not unfairly discriminatory because
ETH is a new trading session and the Exchange desires to encourage
Market-Makers to register for SPX/SPXW and VIX tier appointments, and
the more Market-Makers that do so, the more SPX/SPXW and VIX quoting
there will be, which benefits all market participants. Not applying the
Hybrid 3.0 Execution Fee during ETH is reasonable, equitable and not
unfairly discriminatory because SPX will be not traded on Hybrid 3.0
during ETH.
The Exchange believes it is reasonable, equitable and not unfairly
discriminatory to offer LMM's that meet a certain heightened quoting
standard (described above) a pro-rata share of a compensation pool
equal to $25,000 times the number of LMMs in that class given the
potential added costs that an LMM may undertake in order to satisfy
that heightened quoting standard. Additionally, if an LMM does not
satisfy the heightened quoting standard, then it will not receive the
proposed rebate. The Exchange believes it is equitable and not unfairly
discriminatory to only offer the rebate to LMMs because it benefits all
market participants in ETH to encourage LMMs to satisfy the heightened
quoting standards, which may increase liquidity during those hours and
provide more trading opportunities and tighter spreads. The Exchange
also believes it is more fitting, as well as equitable and not unfairly
discriminatory to implement an incentive program with a rebate during
ETH, rather than the obligation/benefit structure that exists during
RTH. Particularly, the Exchange notes that creating an incentive
program in which LMMs must satisfy a heightened standard to receive the
rebate, encourages LMMs to provide significant liquidity during ETH,
which is important as the Exchange expects lower trading liquidity and
trading levels during ETH and thus fewer opportunities for an LMM to
receive a participation entitlement (as they currently do during RTH).
Without the possibility of receiving a participation entitlement on a
sufficient volume of trades, there would not be sufficient incentive
for Trading Permit Holders to undertake an obligation to quote at
heightened levels, which could result in even lower levels of
liquidity. Therefore, a rebate is more appropriate than imposing an
obligation to receive a participation entitlement. The Exchange notes
that offering a rebate during ETH is merely a different type of
financial benefit that may be given to LMMs during ETH if it achieves a
heightened quoting level.
Applying to SPX, SPXW and VIX the CBOE Proprietary Products Sliding
Scale and the Customer Large Trade Discount during ETH is reasonable,
equitable and not unfairly discriminatory because these items apply to
SPX, SPXW and VIX during RTH. Applying the CBOE Proprietary Products
Sliding Scale during ETH avoids a cost differential between RTH and
ETH. Moreover, the Exchange notes that all thresholds in the CBOE
Proprietary Products Sliding Scale will be the same in ETH as it is in
RTH. The Exchange believes requiring an order be executed in its
entirety in either RTH or ETH, but not partly in both to qualify for
the Customer Large Trade Discount is reasonable, equitable and not
unfairly discriminatory because the RTH and ETH trading sessions will
have separate order books and require separate logins
[[Page 12686]]
for access, and as there will be no ``rolling'' of orders by the
Exchange between the two sessions.
The Exchange believes the Trading Permit fees for Market-Maker and
Electronic Access Trading Permits are reasonable as they are lower than
the Trading Permit fees assessed during RTH. The Exchange believes it
is equitable and not unfairly discriminatory to charge lower Trading
Permit fees for ETH than RTH because ETH is a new trading session and
the Exchange seeks to encourage market participants to participate in
ETH. The Exchange notes that the more ETH Trading Permit Holders there
are during ETH, the more liquidity there will be, which benefits all
market participants. The Exchange also believes it is equitable to
assess different access fees for trading permits that provide
differential access as long as the same access fee is assessed to all
Holders of the same type of Trading Permit. The Exchange notes that
different types of Trading Permits during RTH are also assessed
different amounts.\22\
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\22\ See e.g., Exchange Fees Schedule, Trading Permit Fees.
Market-Maker Trading Permits during RTH are assessed $5,500 per
month per permit while Electronic Access Permits during RTH are
assessed $1,600 per month per permit.
---------------------------------------------------------------------------
The Exchange believes the proposed Bandwidth Packet fees are
reasonable because they are within the range of the cost of Bandwidth
Packet fees during RTH. The Exchange believes it is equitable and not
unfairly discriminatory to charge lower fees for Bandwidth Packets
during ETH than RTH because ETH is a new trading session and the
Exchange seeks to encourage market participants to participate in ETH.
The Exchange also believes it is equitable to assess different fees for
different types of Bandwidth Packets as long as the same access fee is
assessed to all Holders of the same type of Bandwidth Packet.
Additionally, the Exchange believes it is equitable to assess higher
Quoting and Order Bandwidth Packet fees than Order Bandwidth Packet
fees, because Quoting and Order Bandwidth Packets provide quoting
bandwidth in addition to order bandwidth. The Exchange notes that
different types of Bandwidth Packets during RTH are also assessed
different amounts.\23\ Finally, the Exchange believes amending the Fees
Schedule to clarify that the maximum quoting bandwidth allowance of
each Market-Maker Trading Permit is over the course of a trading
session, instead of a trading day alleviates confusion, thereby
removing impediments to and perfecting the mechanism of a free open
market and a national market system, and, in general, protect investors
and the public interest.
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\23\ See e.g., Exchange Fees Schedule, Bandwidth Packet Fees.
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The Exchange believes waiving ETH Trading Permit and Bandwidth
Packet fees for one of each type of Trading Permit and Bandwidth
Packet, per affiliated TPH through August 31, 2015 is reasonable,
equitable and not unfairly discriminatory, because it promotes and
encourages trading during the ETH session and applies to all ETH TPHs.
The Exchange believes the proposed monthly fee of $10,000 for each
extra CMI CAS Server that a TPH requests is reasonable because it is
necessary to recoup the costs related to the provision, maintenance and
upkeep of such Servers, and is equitable and not unfairly
discriminatory because the fee will be applied to all TPHs that request
an extra CMI CAS Server to be used during ETH. Additionally, TPHs
during RTH that request an additional CMI CAS Server are assessed the
same monthly amount.
The Exchange believes it is reasonable to apply the Network Access
Port fees to the ETH session because the Exchange has expended
significant resources setting up, providing and maintaining this
connectivity and the Exchange seeks to recoup those costs. The Exchange
believes it's reasonable, equitable and not unfairly discriminatory to
assess these costs per port regardless of session (i.e., not assess a
TPH twice if using the same port for RTH and ETH), as the costs
associated with using the port do not increase if a TPH uses that port
for both sessions.
Similarly, the Exchange believes it is reasonable, equitable, and
not unfairly discriminatory to assess the same PULSe fees to the ETH
session, but not charge a TPH twice if using the same PULSe login ID
for both sessions, because the Exchange expended significant resources
developing PULSe and desires to recoup some of those costs, but does
not wish to charge TPHs twice if using the same login ID.
The Exchange believes assessing the CMI Login ID and FIX Login ID
fees to Login IDs for ETH is reasonable because the fee amounts are the
same as in RTH. The Exchange believes it's equitable and not unfairly
discriminatory because all TPHs will be assessed the Login ID fees for
each Login ID they have for both RTH and ETH. The Exchange believes
it's reasonable, equitable and not unfairly discriminatory to waive
fees for Login IDs related to waived Trading Permits and/or Bandwidth
Packets in order to promote and encourage initial participation in ETH.
The Exchange believes it's reasonable to assess a $0.0025 fee per
contract side for each matched trade because the same fee amount is
assessed during RTH. The Exchange believes it's equitable and not
unfairly discriminatory to assess such fee because it applies to all
TPHs and applies in both RTH and ETH.
The proposed ORF during the ETH session is reasonable, equitable
and not unfairly discriminatory because it is the same amount assessed
during the RTH session. The Exchange believes the ORF is equitable and
not unfairly discriminatory in that it is charged to all TPHs during
both sessions on all their transactions that clear in the customer
range at the OCC. Moreover, the Exchange believes the ORF ensures
fairness by assessing higher fees to those TPHs that require more
Exchange regulatory services based on the amount of customer options
business they conduct in each trading session. Regulating customer
trading activity is much more labor intensive and requires greater
expenditure of human and technical resources than regulating non-
customer trading activity, which tends to be more automated and less
labor-intensive. As a result, the costs associated with administering
the customer component of the Exchange's overall regulatory program are
materially higher than the costs associated with administering the non-
customer component (e.g., Trading Permit Holder proprietary
transactions) of its regulatory program.\24\
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\24\ If the Exchange changes its method of funding regulation or
if circumstances otherwise change in the future, the Exchange may
decide to modify the ORF or assess a separate regulatory fee on
Trading Permit Holder proprietary transactions if the Exchange deems
it advisable.
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Having Trading Permit Holder Application fees, Web CRD fees Trading
Permit Holder Transaction Fee Policies and Rebate Programs apply the
same in ETH as RTH is reasonable, equitable and not unfairly
discriminatory because the fees, rebates and programs are the same in
both sessions and are based on a market participant's status as a TPH
and not based upon which trading session a TPH participates.
Not applying in ETH fees, rebates and programs that exclude SPX,
SPXW and VIX during RTH is reasonable because these fees rebates and
programs will not apply to all TPHs and will be consistent across
sessions.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule changes will
impose any burden on competition that are not
[[Page 12687]]
necessary or appropriate in furtherance of the purposes of the Act. The
Exchange 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
and rebates are assessed to different market participants in some
circumstances, these different market participants have different
obligations and different circumstances. For example, Clearing TPHs
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 proposed fees, rebates and programs
for ETH are intended to encourage market participants to bring
liquidity to the Exchange during ETH (which benefits all market
participants), while still covering Exchange costs (including those
associated with the upgrading and maintenance of Exchange systems). The
Exchange does not believe that the proposed rule changes will impose
any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
products offered during ETH (SPX, SPXW and VIX), are proprietary
products that will only be traded 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 \25\ and paragraph (f) of Rule 19b-4 \26\
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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\25\ 15 U.S.C. 78s(b)(3)(A).
\26\ 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-2015-020 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549.
All submissions should refer to File Number SR-CBOE-2015-020. 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-2015-020 and should be
submitted on or before March 31, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
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\27\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-05476 Filed 3-9-15; 8:45 am]
BILLING CODE 8011-01-P
