Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule, 64469-64472 [2015-26916]
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Federal Register / Vol. 80, No. 205 / Friday, October 23, 2015 / Notices
number, or for an applicant using the
Company name box, at https://
www.sec.gov/search/search.htm, or by
calling (202) 551–8090.
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Summary of the Application
1. Applicants request an order to
permit (a) a Fund 1 (each a ‘‘Fund of
Funds’’) to acquire shares of Underlying
Funds 2 in excess of the limits in
sections 12(d)(1)(A) and (C) of the Act
and (b) the Underlying Funds that are
registered open-end investment
companies or series thereof, their
principal underwriters and any broker
or dealer registered under the Securities
Exchange Act of 1934 to sell shares of
the Underlying Fund to the Fund of
Funds in excess of the limits in section
12(d)(1)(B) of the Act.3 Applicants also
request an order of exemption under
sections 6(c) and 17(b) of the Act from
the prohibition on certain affiliated
transactions in section 17(a) of the Act
to the extent necessary to permit the
Underlying Funds to sell their shares to,
and redeem their shares from, the Funds
of Funds.4 Applicants state that such
transactions will be consistent with the
policies of each Fund of Funds and each
Underlying Fund and with the general
1 Applicants request that the order apply to each
existing and future series of AAM ETF Trust and
to each existing and future registered open-end
investment company or series thereof that is
advised by Advisors Asset Management, Inc. or its
successor or by any entity controlling, controlled by
or under common control with Advisors Asset
Management, Inc. or its successor and is part of the
same ‘‘group of investment companies’’ as AAM
ETF Trust (each, a ‘‘Fund’’). For purposes of the
requested order, ‘‘successor’’ is limited to an entity
that results from a reorganization into another
jurisdiction or a change in the type of business
organization. For purposes of the request for relief,
the term ‘‘group of investment companies’’ means
any two or more investment companies, including
closed-end investment companies and business
development companies, that hold themselves out
to investors as related companies for purposes of
investment and investor services.
2 Certain of the Underlying Funds have obtained
exemptions from the Commission necessary to
permit their shares to be listed and traded on a
national securities exchange at negotiated prices
and, accordingly, to operate as an exchange-traded
fund (‘‘ETF’’).
3 Applicants represent that a Funds of Funds will
not invest in reliance on the order in business
development companies or closed-end investment
companies that are not listed and traded on a
national securities exchange.
4 A Fund of Funds generally would purchase and
sell shares of an Underlying Fund that operates as
an ETF through secondary market transactions
rather than through principal transactions with the
Underlying Fund. Applicants nevertheless request
relief from section 17(a) to permit a Fund of Funds
to purchase or redeem shares from the ETF. A Fund
of Funds will purchase and sell shares of an
Underlying Fund that is a closed-end fund through
secondary market transactions at market prices
rather than through principal transactions with the
closed-end fund. Accordingly, applicants are not
requesting section 17(a) relief with respect to
transactions in shares of closed-end funds
(including business development companies).
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purposes of the Act and will be based
on the net asset values of the
Underlying Funds.
2. Applicants agree that any order
granting the requested relief will be
subject to the terms and conditions
stated in the application. Such terms
and conditions are designed to, among
other things, help prevent any potential
(i) undue influence over an Underlying
Fund that is not in the same ‘‘group of
investment companies’’ as the Fund of
Funds through control or voting power,
or in connection with certain services,
transactions, and underwritings, (ii)
excessive layering of fees, and (iii)
overly complex fund structures, which
are the concerns underlying the limits
in sections 12(d)(1)(A), (B), and (C) of
the Act.
3. Section 12(d)(1)(J) of the Act
provides that the Commission may
exempt any person, security, or
transaction, or any class or classes of
persons, securities, or transactions, from
any provision of section 12(d)(1) if the
exemption is consistent with the public
interest and the protection of investors.
Section 17(b) of the Act authorizes the
Commission to grant an order
permitting a transaction otherwise
prohibited by section 17(a) if it finds
that (a) the terms of the proposed
transaction are fair and reasonable and
do not involve overreaching on the part
of any person concerned; (b) the
proposed transaction is consistent with
the policies of each registered
investment company involved; and (c)
the proposed transaction is consistent
with the general purposes of the Act.
Section 6(c) of the Act permits the
Commission to exempt any persons or
transactions from any provision of the
Act if such exemption is necessary or
appropriate in the public interest and
consistent with the protection of
investors and the purposes fairly
intended by the policy and provisions of
the Act.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–26917 Filed 10–22–15; 8:45 am]
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–76192; File No. SR–CBOE–
2015–091]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the Fees
Schedule
October 19, 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 October
9, 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 the Substance
of the Proposed Rule Change
The Exchange proposes to amend its
Fees Schedule. The text of the proposed
rule change is available on the
Exchange’s Web site (https://www.cboe.
com/AboutCBOE/CBOELegalRegulatory
Home.aspx), at the Exchange’s Office of
the Secretary, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
In March 2015, the Exchange
launched Extended Trading Hours
(‘‘ETH’’) for options on the S&P 500
1 15
2 17
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U.S.C. 78s(b)(1).
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Index (‘‘SPX’’) and CBOE Volatility
Index® (‘‘VIX’’), two of the Exchange’s
exclusively listed options,3 as
alternatives for hedging and other
investment purposes, particularly as a
complementary investment tool to VIX
futures.4 Rule 6.1A(c) provides that the
Exchange may designate as eligible for
trading during ETH any exclusively
listed index option designated for
trading under Rules 24.2 and 24.9. In
response to customer demand for
additional options to trade during ETH
for similar purposes, the Exchange
recently designated p.m.-settled options
on the Standard & Poor’s 500 Stock
Index (‘‘SPXpm’’) to be eligible for
trading during ETH. The Exchange
commenced trading of SPXpm during
ETH on October 1, 2015. As such, the
Exchange proposes to establish fees for
the trading of SPXpm during ETH (all
fees referenced herein are per-contract
unless otherwise stated).5 First, the
Exchange proposes to amend Footnote
37, which provides general information
regarding the two trading sessions and
indicates which products will be
available in ETH, to include trading of
SPXpm.
Transaction Fees
The Exchange proposes to assess the
same fees for SPXpm in the ETH session
as are assessed for SPXpm in the
Regular Trading Hours session
(‘‘RTH’’).6 As in RTH, the Proprietary
Index Options Rate Table will apply
during ETH. Transaction fees for
SPXpm options will be as follows (all
listed rates are per contract):
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 .................................................................................................................................................
$0.44
0.35
0.25
0.20
0.40
0.40
CBOE Rule 6.1A (Extended Trading
Hours) provides that the Exchange may
approve one or more Market-Makers to
act as Lead Market-Makers (‘‘LMMs’’) in
each class during ETH in accordance
with Rule 8.15A for terms of at least one
month.7 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,8 but
not the obligations set forth in Rule
8.15A 9 during ETH 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.10 Specifically, for TPHs
acting as LMMs in SPXpm options
during ETH, the Exchange proposes to
provide in the Fees Schedule (new
Footnote 39) that if a LMM meets the
heightened standard described above,
the LMM will receive a rebate of $1,000
per month. The Exchange believes it is
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 liquidity
during ETH. Additionally, the Exchange
notes that LMMs may have to undertake
other expenses to be able to quote at the
3 An ‘‘exclusively listed option’’ is an option that
trades exclusively on an exchange because the
exchange has an exclusive license to list and trade
the option or has the proprietary rights in the
interest underlying the option. An exclusively
listed option is different than a ‘‘singly listed
option,’’ which is an option that is not an
‘‘exclusively listed option’’ but that is listed by one
exchange and not by any other national securities
exchange.
4 See Securities Exchange Act Release No. 34–
73704 (November 28, 2014), 79 FR 72044
(December 4, 2014) (SR–CBOE–2014–062) (order
granting accelerated approval of proposed rule
change to adopt Extended Trading Hours for SPX
and VIX).
5 The Exchange initially filed the proposed fee
changes on October 1, 2015 (SR–CBOE–2015–083).
On October 9, 2015, the Exchange withdrew that
filing and submitted this filing.
6 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).
7 See CBOE Rule 6.1A(e)(iii)(A).
8 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.
9 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.
10 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.
Additionally, the Exchange notes that
SPXpm transactions executed via AIM
during ETH will be assessed AIM
Agency/Primary and AIM Contra fees
based on an order’s origin code (which
is currently the case during RTH as
well).
Surcharges
The Exchange also proposes to apply
in ETH, like RTH, an Index License
Surcharge Fee of $0.13 per contract for
SPXpm 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 for trading.
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LMM Rebate
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heightened standard during ETH such
as purchase additional bandwidth.
The Exchange also proposes to make
a corollary change to Footnote 38. The
Exchange notes that currently, for SPX
and VIX options, LLMs [sic] are subject
to a different rebate program.11 As such,
the Exchange proposes to clarify that
such rebate program is for TPHs acting
as a LMM during ETH for SPX and VIX
options only.
The Exchange lastly notes that fees,
rebates and programs that excluded
SPXpm, during RTH will also not apply
in ETH.12
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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.13 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 14 requirements that the rules of
an exchange be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitation transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
Additionally, the Exchange believes the
proposed rule change is consistent with
Section 6(b)(4) of the Act,15 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 SPXpm orders during the ETH
session are reasonable, equitable and
not unfairly discriminatory because they
are the same as the amounts of
corresponding fees for SPXpm orders
during the RTH session. The Exchange
notes that the fee amounts for each
separate type of market participant will
be assessed equally for each product to
11 See CBOE Fees Schedule, Footnote 38. If a
LMM meets the heightened quoting standard, 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 for SPX and VIX.
12 See e.g., Exchange Fees Schedule, Liquidity
Provider Sliding Scale, Marketing Fee, Clearing
Trading Permit Holder Fee Cap, and Volume
Incentive Program (‘‘VIP’’).
13 15 U.S.C. 78f(b).
14 15 U.S.C. 78f(b)(5).
15 15 U.S.C. 78f(b)(4).
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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).
Assessing the Index License
Surcharge Fee of $0.13 per contract to
SPXpm during ETH is reasonable
because the amount is the same as the
amount of the corresponding surcharge
for SPXpm orders during RTH. The
surcharge fee is equitable and not
unfairly discriminatory because it will
be assessed to all market participants to
whom the SPXpm will apply in both
RTH and ETH.
The Exchange believes it is
reasonable, equitable and not unfairly
discriminatory to offer LMMs in SPXpm
during ETH that meet a certain
heightened quoting standard (described
above) a rebate of $1,000 per month
given added costs that a LMM may
undertake (e.g., purchase of an
additional bandwidth) and because it
will encourage LMMs in SPXpm to
provide increased liquidity. More
specifically, the Exchange believes the
amount of the proposed rebate is
reasonable because it takes into
consideration certain additional costs an
LMM may incur and the Exchange
believes the proposed amount is such
that it will incentivize LMMs to meet
the heighted quoting standard.
Additionally, if a 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). Therefore, a
rebate is more appropriate than
imposing an obligation to receive a
participation entitlement. The Exchange
notes that offering a rebate during ETH
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is merely a different type of financial
benefit that may be given to LMMs
during ETH if it achieves a heightened
quoting level. The Exchange believes it
is equitable and not unfairly
discriminatory to provide a lesser rebate
for LMMs appointed in SPXpm options
as compared to LMMs for SPX and VIX
options because the Exchange expects
lower trading volume in SPXpm options
during ETH as compared to volume for
SPX and VIX. Therefore, it would not be
economically viable for the Exchange to
offer the same amount of rebate to
LMMs in SPXpm as is offered to LMMs
for SPX and VIX.
Finally, not applying in ETH fees,
rebates and programs that exclude
SPXpm 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
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 SPXpm is a proprietary product
that will only be traded on CBOE. To
the extent that the proposed changes
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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 16 and paragraph (f) of Rule
19b–4 17 thereunder. At any time within
60 days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
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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–2015–091 on the subject line.
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–2015–091. 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/
16 15
17 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
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rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
offices of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–CBOE–
2015–091, and should be submitted on
or before November 13, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–26916 Filed 10–22–15; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
Data Collection Available for Public
Comments
60-day notice and request for
comments.
ACTION:
The Small Business
Administration (SBA) intends to request
approval, from the Office of
Management and Budget (OMB) for the
collection of information described
below. The Paperwork Reduction Act
(PRA) of 1995, 44 U.S.C Chapter 35
requires federal agencies to publish a
notice in the Federal Register
concerning each proposed collection of
information before submission to OMB,
and to allow 60 days for public
comment in response to the notice. This
notice complies with that requirement.
DATES: Submit comments on or before
December 22, 2015.
ADDRESSES: Send all comments to Gina
Beyer, Program Analyst, Office of
Disaster Assistance, Small Business
SUMMARY:
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Administration, 409 3rd Street, 6th
Floor, Washington, DC 20416.
FOR FURTHER INFORMATION CONTACT: Gina
Beyer, Program Analyst, Disaster
Assistance, gina.beyer@sba.gov 202–
205–6458, or Curtis B. Rich,
Management Analyst, 202–205–7030,
curtis.rich@sba.gov;
A team of
Quality Assurance staff at the Disaster
Assistance Center (DASC) will conduct
a brief telephone survey of customers to
determine their satisfaction with the
services received from the (DASC) and
the Field Operations Centers. The result
will help the Agency to improve where
necessary, the delivery of critical
financial assistance to disaster victims.
SUPPLEMENTARY INFORMATION:
Solicitation of Public Comments
SBA is requesting comments on (a)
Whether the collection of information is
necessary for the agency to properly
perform its functions; (b) whether the
burden estimates are accurate; (c)
whether there are ways to minimize the
burden, including through the use of
automated techniques or other forms of
information technology; and (d) whether
there are ways to enhance the quality,
utility, and clarity of the information.
Summary of Information Collection
Title: Disaster Assistance Customer
Satisfaction Survey.
Description of Respondents: Disaster
Customers satisfaction with service
received.
Form Number: SBA Form 2313FOC,
2313CSC.
Total Estimated Annual Responses:
24,284.
Total Estimated Annual Hour Burden:
199.
Curtis B. Rich,
Management Analyst.
[FR Doc. 2015–26895 Filed 10–22–15; 8:45 am]
BILLING CODE 8025–01–P
SMALL BUSINESS ADMINISTRATION
Data Collection Available for Public
Comments
60-day notice and request for
comments.
ACTION:
The Small Business
Administration (SBA) intends to request
approval, from the Office of
Management and Budget (OMB) for the
collection of information described
below. The Paperwork Reduction Act
(PRA) of 1995, 44 U.S.C Chapter 35
requires federal agencies to publish a
notice in the Federal Register
concerning each proposed collection of
SUMMARY:
E:\FR\FM\23OCN1.SGM
23OCN1
]]>Agencies
[Federal Register Volume 80, Number 205 (Friday, October 23, 2015)]
[Notices]
[Pages 64469-64472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-26916]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-76192; File No. SR-CBOE-2015-091]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend the Fees Schedule
October 19, 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 October 9, 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.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange proposes to amend its Fees Schedule. The text of the
proposed rule change is available on the Exchange's Web site (https://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's
Office of the Secretary, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
In March 2015, the Exchange launched Extended Trading Hours
(``ETH'') for options on the S&P 500
[[Page 64470]]
Index (``SPX'') and CBOE Volatility Index[supreg] (``VIX''), two of the
Exchange's exclusively listed options,\3\ as alternatives for hedging
and other investment purposes, particularly as a complementary
investment tool to VIX futures.\4\ Rule 6.1A(c) provides that the
Exchange may designate as eligible for trading during ETH any
exclusively listed index option designated for trading under Rules 24.2
and 24.9. In response to customer demand for additional options to
trade during ETH for similar purposes, the Exchange recently designated
p.m.-settled options on the Standard & Poor's 500 Stock Index
(``SPXpm'') to be eligible for trading during ETH. The Exchange
commenced trading of SPXpm during ETH on October 1, 2015. As such, the
Exchange proposes to establish fees for the trading of SPXpm during ETH
(all fees referenced herein are per-contract unless otherwise
stated).\5\ First, the Exchange proposes to amend Footnote 37, which
provides general information regarding the two trading sessions and
indicates which products will be available in ETH, to include trading
of SPXpm.
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\3\ An ``exclusively listed option'' is an option that trades
exclusively on an exchange because the exchange has an exclusive
license to list and trade the option or has the proprietary rights
in the interest underlying the option. An exclusively listed option
is different than a ``singly listed option,'' which is an option
that is not an ``exclusively listed option'' but that is listed by
one exchange and not by any other national securities exchange.
\4\ See Securities Exchange Act Release No. 34-73704 (November
28, 2014), 79 FR 72044 (December 4, 2014) (SR-CBOE-2014-062) (order
granting accelerated approval of proposed rule change to adopt
Extended Trading Hours for SPX and VIX).
\5\ The Exchange initially filed the proposed fee changes on
October 1, 2015 (SR-CBOE-2015-083). On October 9, 2015, the Exchange
withdrew that filing and submitted this filing.
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Transaction Fees
The Exchange proposes to assess the same fees for SPXpm in the ETH
session as are assessed for SPXpm in the Regular Trading Hours session
(``RTH'').\6\ As in RTH, the Proprietary Index Options Rate Table will
apply during ETH. Transaction fees for SPXpm options will be as follows
(all listed rates are per contract):
---------------------------------------------------------------------------
\6\ 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 0.40
Holder Market-Maker....................................
Professional/Voluntary Professional..................... 0.40
------------------------------------------------------------------------
Additionally, the Exchange notes that SPXpm transactions executed
via AIM during ETH will be assessed AIM Agency/Primary and AIM Contra
fees based on an order's origin code (which is currently the case
during RTH as well).
Surcharges
The Exchange also proposes to apply in ETH, like RTH, an Index
License Surcharge Fee of $0.13 per contract for SPXpm 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 for trading.
LMM Rebate
CBOE Rule 6.1A (Extended Trading Hours) provides that the Exchange
may approve one or more Market-Makers to act as Lead Market-Makers
(``LMMs'') in each class during ETH in accordance with Rule 8.15A for
terms of at least one month.\7\ 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,\8\ but not the obligations
set forth in Rule 8.15A \9\ during ETH 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.\10\ Specifically, for TPHs acting as
LMMs in SPXpm options during ETH, the Exchange proposes to provide in
the Fees Schedule (new Footnote 39) that if a LMM meets the heightened
standard described above, the LMM will receive a rebate of $1,000 per
month. The Exchange believes it is 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 liquidity during ETH. Additionally, the Exchange notes that
LMMs may have to undertake other expenses to be able to quote at the
[[Page 64471]]
heightened standard during ETH such as purchase additional bandwidth.
---------------------------------------------------------------------------
\7\ See CBOE Rule 6.1A(e)(iii)(A).
\8\ 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.
\9\ 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.
\10\ 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.
---------------------------------------------------------------------------
The Exchange also proposes to make a corollary change to Footnote
38. The Exchange notes that currently, for SPX and VIX options, LLMs
[sic] are subject to a different rebate program.\11\ As such, the
Exchange proposes to clarify that such rebate program is for TPHs
acting as a LMM during ETH for SPX and VIX options only.
---------------------------------------------------------------------------
\11\ See CBOE Fees Schedule, Footnote 38. If a LMM meets the
heightened quoting standard, 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 for SPX and VIX.
---------------------------------------------------------------------------
The Exchange lastly notes that fees, rebates and programs that
excluded SPXpm, during RTH will also not apply in ETH.\12\
---------------------------------------------------------------------------
\12\ See e.g., Exchange Fees Schedule, Liquidity Provider
Sliding Scale, Marketing Fee, Clearing Trading Permit Holder Fee
Cap, and Volume Incentive Program (``VIP'').
---------------------------------------------------------------------------
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.\13\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \14\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitation
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. Additionally,
the Exchange believes the proposed rule change is consistent with
Section 6(b)(4) of the Act,\15\ 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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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
\15\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The proposed transaction fee amounts for SPXpm orders during the
ETH session are reasonable, equitable and not unfairly discriminatory
because they are the same as the amounts of corresponding fees for
SPXpm orders during the RTH session. 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).
Assessing the Index License Surcharge Fee of $0.13 per contract to
SPXpm during ETH is reasonable because the amount is the same as the
amount of the corresponding surcharge for SPXpm orders during RTH. The
surcharge fee is equitable and not unfairly discriminatory because it
will be assessed to all market participants to whom the SPXpm will
apply in both RTH and ETH.
The Exchange believes it is reasonable, equitable and not unfairly
discriminatory to offer LMMs in SPXpm during ETH that meet a certain
heightened quoting standard (described above) a rebate of $1,000 per
month given added costs that a LMM may undertake (e.g., purchase of an
additional bandwidth) and because it will encourage LMMs in SPXpm to
provide increased liquidity. More specifically, the Exchange believes
the amount of the proposed rebate is reasonable because it takes into
consideration certain additional costs an LMM may incur and the
Exchange believes the proposed amount is such that it will incentivize
LMMs to meet the heighted quoting standard. Additionally, if a 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). 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. The Exchange believes it is equitable and not
unfairly discriminatory to provide a lesser rebate for LMMs appointed
in SPXpm options as compared to LMMs for SPX and VIX options because
the Exchange expects lower trading volume in SPXpm options during ETH
as compared to volume for SPX and VIX. Therefore, it would not be
economically viable for the Exchange to offer the same amount of rebate
to LMMs in SPXpm as is offered to LMMs for SPX and VIX.
Finally, not applying in ETH fees, rebates and programs that
exclude SPXpm 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 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 SPXpm is
a proprietary product that will only be traded on CBOE. To the extent
that the proposed changes
[[Page 64472]]
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 \16\ and paragraph (f) of Rule 19b-4 \17\
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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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------
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-2015-091 on the subject line.
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-2015-091. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal offices of the Exchange.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-CBOE-2015-091,
and should be submitted on or before November 13, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-26916 Filed 10-22-15; 8:45 am]
BILLING CODE 8011-01-P
