Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule, 77070-77072 [2015-31178]

Download as PDF 77070 Federal Register / Vol. 80, No. 238 / Friday, December 11, 2015 / Notices action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) 20 of the Act to determine whether the proposed rule change should be approved or disapproved. information that you wish to make available publicly. All submissions should refer to File Number SR– NYSEARCA–2015–117 and should be submitted on or before January 4, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.21 Robert W. Errett, Deputy Secretary. [FR Doc. 2015–31277 Filed 12–10–15; 8:45 am] 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– NYSEARCA–2015–117 on the subject line. jstallworth on DSK7TPTVN1PROD with NOTICES 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: Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEARCA–2015–117. 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 Section, 100 F Street NE., Washington, DC 20549–1090. Copies of the filing will also be available for inspection and copying at the NYSE’s principal office and on its Internet Web site at www.nyse.com. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–76567; File No. SR–CBOE– 2015–109] December 7, 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 November 24, 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/ 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 21 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 20 15 U.S.C. 78s(b)(2)(B). VerDate Sep<11>2014 14:55 Dec 10, 2015 Jkt 238001 PO 00000 Frm 00145 Fmt 4703 Sfmt 4703 proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its Fees Schedule.3 Specifically, the Exchange proposes to increase the Customer Priority Surcharge fee assessed to contracts executed in VIX volatility index options (‘‘VIX options’’) and weekly S&P 500 options (‘‘SPXW options’’). Currently, the VIX Customer Priority Surcharge (‘‘VIX Surcharge’’) is assessed on all Customer (C) VIX contracts executed electronically that are Maker and not Market Turner. Additionally, the VIX Surcharge is only assessed on such contracts that have a premium of $0.11 or greater. The Exchange proposes to increase the VIX Surcharge from $0.10 per contract to $0.20 per contract on such contracts that have a premium of $0.11 or greater. The SPXW Customer Priority Surcharge (‘‘SPXW Surcharge’’) is currently assessed on all Customer (C) SPXW contracts executed electronically.4 The Exchange also proposes to increase the SPXW Surcharge from $0.05 per contract to $0.10 per contract. The Exchange also proposes to amend the Fees Schedule with respect to the Qualified Contingent Cross (‘‘QCC’’) Orders Rate Table. By way of background, the Fees Schedule currently provides for a ‘‘QCC Rate Table’’ which sets forth a transaction fee and credit for QCC transactions. In addition, the ‘‘Notes’’ section of the QCC Rate Table includes the definition of a QCC transaction. Specifically the ‘‘Notes’’ section currently provides that ‘‘A QCC transaction is comprised of an ‘initiating order’ to buy (sell) at least 1,000 contracts, coupled with a contraside order to sell (buy) an equal number of contracts . . .’’ The Exchange notes that it recently amended its QCC rules to expand the availability of QCC orders 3 The Exchange initially filed the proposed fee change on November 2, 2015 (SR–CBOE–2015– 101). On November 24, 2015, the Exchange withdrew that filing and submitted this filing. 4 The SPXW Surcharge is not assessed to contracts executed by a floor broker using a PAR terminal or orders in SPXW options in SPXW electronic book that are executed during opening rotation on the final settlement day of VIX options and futures which have the expiration that contribute to the VIX settlement calculation. E:\FR\FM\11DEN1.SGM 11DEN1 Federal Register / Vol. 80, No. 238 / Friday, December 11, 2015 / Notices jstallworth on DSK7TPTVN1PROD with NOTICES by permitting multiple contra-parties on a QCC order.5 As such, the definition of QCC Orders in CBOE Rule 6.53 has been amended. The Exchange proposes to similarly amend the Fees Schedule to incorporate this new definition to maintain consistency in the Rules and Fees Schedule and avoid potential confusion. 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.6 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 7 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. The Exchange also believes the proposed rule change is consistent with Section 6(b)(4) of the Act,8 which provides that Exchange rules may provide for the equitable allocation of reasonable dues, fees, and other charges among its Trading Permit Holders. The Exchange believes that the SPXW and VIX Customer Priority Surcharge increases are reasonable because the amount of the new fees are within the range of surcharges assessed for customer transactions in other CBOE proprietary products (for example customers are currently assessed a $0.20 Hybrid 3.0 Execution Surcharge (which essentially acts as a customer priority surcharge) in SPX options). The Exchange believes that it is equitable and not unfairly discriminatory to assess the SPXW and VIX Priority Surcharges to Customers and not other market participants because Customers are not subject to additional costs for effecting transactions in SPXW and VIX which are applicable to other market participants, such as license surcharges. Additionally, Customers are not subject 5 See Securities Exchange Act Release No. 75756 (August 25, 2015), 80 FR 168 (August 31, 2015) (SR–CBOE–2015–073). 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). 8 15 U.S.C. 78f(b)(4). VerDate Sep<11>2014 14:55 Dec 10, 2015 Jkt 238001 to fees applicable to other market participants such as connectivity fees and fees relating to Trading Permits, and are not subject to the same obligations as other market participants, including regulatory and compliance requirements and quoting obligations. The Exchange notes that the VIX Surcharge was adopted to minimize the cost differentials between manual and electronic executions (as Floor Brokers assess a commission on customer executions). As such, the Exchange believes it’s equitable and not unfairly discriminatory to assess the VIX Surcharge to Makers and not Takers because electronic Maker orders are analogous to customer orders represented by Floor Brokers in open outcry (as compared to Takers that immediately remove liquidity and do not rest in the book). The Exchange believes it’s equitable and not unfairly discriminatory to assess only Makers in VIX and both Makers and Takers in SPXW because the SPX product group has reached a mature and established level since its introduction while VIX has not and the Exchange therefore wants to incentivize liquidity in VIX and not discourage trading. The Exchange also notes that another S&P 500 product (SPX) also charges a surcharge to both Makers and Takers (i.e., the Hybrid 3.0 Surcharge). The Exchange believes that it is equitable and not unfairly discriminatory to only assess the VIX Surcharge to Maker NonTurners because the Exchange wants to encourage improving the market (‘‘turning’’). The Exchange believes that it is equitable and not unfairly discriminatory to only assess the VIX Surcharge when the contract premium is at least $0.11 because the Exchange wants to reduce costs on low priced VIX options to encourage Customers to close and roll over positions close to expiration at low premium levels. Currently, such Customers are less likely to do this because the transaction fee is closer to the premium level. The Exchange believes that maintaining lowered fees overall for VIX options trading with a premium of $0.00–$0.10 will encourage the trading of such options. As such, the Exchange does not wish to assess the VIX Surcharge on such options in order to keep the costs low. Finally, the Exchange believes that codifying the amended definition of a QCC transaction in the Fees Schedule (in addition to the Exchange’s Rules, where it is currently provided for), will alleviate potential confusion and maintain clarity in the Fees Schedule, which serves to remove impediments to PO 00000 Frm 00146 Fmt 4703 Sfmt 4703 77071 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. B. Self-Regulatory Organization’s Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act because, while different electronic transaction fees are assessed to different market participants, different market participants have different obligations and circumstances as noted above. The Exchange believes that the proposal to increase the surcharge amount assessed to Customers for executions in SPXW and VIX contracts will not cause an unnecessary burden on intermarket competition because SPXW and VIX are only 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. Additionally, the proposed change to codify in the Fees Schedule the revised definition of a QCC order is not intended for competitive reasons and only applies to CBOE. The Exchange notes that no rights or obligations of Trading Permit Holders are affected by this particular change. 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 9 and paragraph (f) of Rule 19b–4 10 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule 9 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). 10 17 E:\FR\FM\11DEN1.SGM 11DEN1 77072 Federal Register / Vol. 80, No. 238 / Friday, December 11, 2015 / Notices 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Brent J. Fields, Secretary. [FR Doc. 2015–31178 Filed 12–10–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–76576; File No. SR–EDGX– 2015–59] • 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–2015–109 on the subject line. Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Delete Rule 22.10, Limitation on Dealings, Related to the EDGX Options Market Paper Comments December 8, 2015. • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. jstallworth on DSK7TPTVN1PROD with NOTICES Electronic Comments Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 1, 2015, EDGX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGX’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange has designated this proposal as a ‘‘noncontroversial’’ proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6)(iii) thereunder,4 which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. All submissions should refer to File Number SR–CBOE–2015–109. 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– 2015–109, and should be submitted on or before January 4, 2016. 11 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 14:55 Dec 10, 2015 Jkt 238001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal for the EDGX Options Market (‘‘EDGX Options’’) to adopt a principles-based approach to prohibit the misuse of material nonpublic information by Market Makers by deleting Rule 22.10 (Limitations on Dealings). The Exchange has designated this proposal as noncontroversial and provided the Commission with the notice required by Rule 19b–4(f)(6)(iii) under the Act.5 The text of the proposed rule change is available at the Exchange’s Web site at www.batstrading.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6)(iii). 5 17 CFR 240.19b–4(f)(6)(iii). PO 00000 Frm 00147 Fmt 4703 Sfmt 4703 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 parts of such statements. (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to adopt a principles-based approach to prohibit the misuse of material non-public information by Market Makers by deleting Rule 22.10 (Limitations on Dealings). In doing so, the Exchange, with regard to EDGX Options, would harmonize its rules governing Market Makers and Options Members that are not Market Makers relating to the protection against misuse of material, non-public information. The Exchange believes that Rule 22.10 is no longer necessary because all Options Members, including Market Makers, are subject to the Exchange’s generally applicable principles-based requirements governing the protection against the misuse of material, non-public information, pursuant to Rule 5.5 (Prevention of the Misuse of Material, Non-Public Information), which obviates the need for separately prescribed requirements for a subset of Exchange participants. Additionally, there is no separate regulatory purpose served by having separate rules for Market Makers. The Exchange notes that this proposed rule change will not decrease the protections against the misuse of material, non-public information; instead, it is designed to provide more flexibility to Options Members. This is a competitive filing that is based on a proposal recently submitted by NYSE MKT LLC (‘‘NYSE MKT’’) and approved by the Commission.6 Background The Exchange has two classes of EDGX Options participants. 6 See Securities Exchange Act Release No. 75432 (July 13, 2015), 80 FR 42597 (July 17, 2015) (Order Approving SR–NYSEMKT–2015–23). E:\FR\FM\11DEN1.SGM 11DEN1

Agencies

[Federal Register Volume 80, Number 238 (Friday, December 11, 2015)]
[Notices]
[Pages 77070-77072]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-31178]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76567; File No. SR-CBOE-2015-109]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend the Fees Schedule

December 7, 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 November 24, 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
    The Exchange proposes to amend its Fees Schedule.\3\ Specifically, 
the Exchange proposes to increase the Customer Priority Surcharge fee 
assessed to contracts executed in VIX volatility index options (``VIX 
options'') and weekly S&P 500 options (``SPXW options''). Currently, 
the VIX Customer Priority Surcharge (``VIX Surcharge'') is assessed on 
all Customer (C) VIX contracts executed electronically that are Maker 
and not Market Turner. Additionally, the VIX Surcharge is only assessed 
on such contracts that have a premium of $0.11 or greater. The Exchange 
proposes to increase the VIX Surcharge from $0.10 per contract to $0.20 
per contract on such contracts that have a premium of $0.11 or greater. 
The SPXW Customer Priority Surcharge (``SPXW Surcharge'') is currently 
assessed on all Customer (C) SPXW contracts executed electronically.\4\ 
The Exchange also proposes to increase the SPXW Surcharge from $0.05 
per contract to $0.10 per contract.
---------------------------------------------------------------------------

    \3\ The Exchange initially filed the proposed fee change on 
November 2, 2015 (SR-CBOE-2015-101). On November 24, 2015, the 
Exchange withdrew that filing and submitted this filing.
    \4\ The SPXW Surcharge is not assessed to contracts executed by 
a floor broker using a PAR terminal or orders in SPXW options in 
SPXW electronic book that are executed during opening rotation on 
the final settlement day of VIX options and futures which have the 
expiration that contribute to the VIX settlement calculation.
---------------------------------------------------------------------------

    The Exchange also proposes to amend the Fees Schedule with respect 
to the Qualified Contingent Cross (``QCC'') Orders Rate Table. By way 
of background, the Fees Schedule currently provides for a ``QCC Rate 
Table'' which sets forth a transaction fee and credit for QCC 
transactions. In addition, the ``Notes'' section of the QCC Rate Table 
includes the definition of a QCC transaction. Specifically the 
``Notes'' section currently provides that ``A QCC transaction is 
comprised of an `initiating order' to buy (sell) at least 1,000 
contracts, coupled with a contra-side order to sell (buy) an equal 
number of contracts . . .'' The Exchange notes that it recently amended 
its QCC rules to expand the availability of QCC orders

[[Page 77071]]

by permitting multiple contra-parties on a QCC order.\5\ As such, the 
definition of QCC Orders in CBOE Rule 6.53 has been amended. The 
Exchange proposes to similarly amend the Fees Schedule to incorporate 
this new definition to maintain consistency in the Rules and Fees 
Schedule and avoid potential confusion.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 75756 (August 25, 
2015), 80 FR 168 (August 31, 2015) (SR-CBOE-2015-073).
---------------------------------------------------------------------------

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.\6\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \7\ 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. The Exchange 
also believes the proposed rule change is consistent with Section 
6(b)(4) of the Act,\8\ which provides that Exchange rules may provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its Trading Permit Holders.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that the SPXW and VIX Customer Priority 
Surcharge increases are reasonable because the amount of the new fees 
are within the range of surcharges assessed for customer transactions 
in other CBOE proprietary products (for example customers are currently 
assessed a $0.20 Hybrid 3.0 Execution Surcharge (which essentially acts 
as a customer priority surcharge) in SPX options).
    The Exchange believes that it is equitable and not unfairly 
discriminatory to assess the SPXW and VIX Priority Surcharges to 
Customers and not other market participants because Customers are not 
subject to additional costs for effecting transactions in SPXW and VIX 
which are applicable to other market participants, such as license 
surcharges. Additionally, Customers are not subject to fees applicable 
to other market participants such as connectivity fees and fees 
relating to Trading Permits, and are not subject to the same 
obligations as other market participants, including regulatory and 
compliance requirements and quoting obligations.
    The Exchange notes that the VIX Surcharge was adopted to minimize 
the cost differentials between manual and electronic executions (as 
Floor Brokers assess a commission on customer executions). As such, the 
Exchange believes it's equitable and not unfairly discriminatory to 
assess the VIX Surcharge to Makers and not Takers because electronic 
Maker orders are analogous to customer orders represented by Floor 
Brokers in open outcry (as compared to Takers that immediately remove 
liquidity and do not rest in the book). The Exchange believes it's 
equitable and not unfairly discriminatory to assess only Makers in VIX 
and both Makers and Takers in SPXW because the SPX product group has 
reached a mature and established level since its introduction while VIX 
has not and the Exchange therefore wants to incentivize liquidity in 
VIX and not discourage trading. The Exchange also notes that another 
S&P 500 product (SPX) also charges a surcharge to both Makers and 
Takers (i.e., the Hybrid 3.0 Surcharge). The Exchange believes that it 
is equitable and not unfairly discriminatory to only assess the VIX 
Surcharge to Maker Non-Turners because the Exchange wants to encourage 
improving the market (``turning'').
    The Exchange believes that it is equitable and not unfairly 
discriminatory to only assess the VIX Surcharge when the contract 
premium is at least $0.11 because the Exchange wants to reduce costs on 
low priced VIX options to encourage Customers to close and roll over 
positions close to expiration at low premium levels. Currently, such 
Customers are less likely to do this because the transaction fee is 
closer to the premium level. The Exchange believes that maintaining 
lowered fees overall for VIX options trading with a premium of $0.00-
$0.10 will encourage the trading of such options. As such, the Exchange 
does not wish to assess the VIX Surcharge on such options in order to 
keep the costs low.
    Finally, the Exchange believes that codifying the amended 
definition of a QCC transaction in the Fees Schedule (in addition to 
the Exchange's Rules, where it is currently provided for), will 
alleviate potential confusion and maintain clarity in the Fees 
Schedule, which serves 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.

B. Self-Regulatory Organization's Statement on Burden on Competition

    CBOE does not believe that the proposed rule change will impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act because, while different 
electronic transaction fees are assessed to different market 
participants, different market participants have different obligations 
and circumstances as noted above. The Exchange believes that the 
proposal to increase the surcharge amount assessed to Customers for 
executions in SPXW and VIX contracts will not cause an unnecessary 
burden on intermarket competition because SPXW and VIX are only 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.
    Additionally, the proposed change to codify in the Fees Schedule 
the revised definition of a QCC order is not intended for competitive 
reasons and only applies to CBOE. The Exchange notes that no rights or 
obligations of Trading Permit Holders are affected by this particular 
change.

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 \9\ and paragraph (f) of Rule 19b-4 \10\ 
thereunder. At any time within 60 days of the filing of the proposed 
rule change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission will institute proceedings to 
determine whether the proposed rule

[[Page 77072]]

change should be approved or disapproved.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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-2015-109 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-2015-109. 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-2015-109, and should be 
submitted on or before January 4, 2016.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Brent J. Fields,
Secretary.
[FR Doc. 2015-31178 Filed 12-10-15; 8:45 am]
BILLING CODE 8011-01-P
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