Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Establish Fees for Options That Overlie a Reduced Value of the FTSE 100 Index and the FTSE China 50 Index, 21611-21614 [2016-08306]
Download as PDF
<![CDATA[
Federal Register / Vol. 81, No. 70 / Tuesday, April 12, 2016 / Notices
the United States shall comply with
applicable U.S. securities and anti-fraud
laws and regulations.
3. Applicant shall rely upon the order
so long as (i) its activities conform in all
material respects to the activities
described in this Application and (ii)
Applicant continues to be regulated by
the BRSA, the Central Bank, or other
applicable Turkish regulatory
authorities as a development and
investment bank as described in the
application.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–08298 Filed 4–11–16; 8:45 am]
By the Commission.
Jill M. Peterson,
Assistant Secretary.
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
[FR Doc. 2016–08484 Filed 4–8–16; 4:15 pm]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77547; File No. SR–CBOE–
2016–021]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Establish Fees for
Options That Overlie a Reduced Value
of the FTSE 100 Index and the FTSE
China 50 Index
BILLING CODE 8011–01–P
April 6, 2016.
SECURITIES AND EXCHANGE
COMMISSION
In the Matter of Royale Globe Holding
Inc., File No. 500–1; Order of
Suspension of Trading
asabaliauskas on DSK3SPTVN1PROD with NOTICES
April 8, 2016.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Royale
Globe Holding Inc. because of questions
regarding the accuracy of publicly
available information about the
company’s operations and securities
ownership, including details about its
affiliation with Maxim Capital Limited,
a purported investment company
operating under the name Maxim
Trader. Royale Globe Holding Inc. is
delinquent in its periodic filings with
the Commission, having not filed any
periodic reports since it filed its Form
10–Q for the period ended July 31, 2015.
Royale Globe Holding Inc. (CIK No.
0001383145), is a Nevada corporation
with its principal place of business
listed as Kuala Lumpur, Malaysia with
stock quoted on OTC Link (previously,
‘‘Pink Sheets’’) operated by OTC
Markets Group, Inc. under the ticker
symbol ROGP.
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
company.
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 company is
suspended for the period from 9:30 a.m.
EDT, April 8, 2016, through 11:59 p.m.
EDT, on April 21, 2016.
VerDate Sep<11>2014
17:18 Apr 11, 2016
Jkt 238001
21611
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b 4 thereunder,2
notice is hereby given that on March 24,
2016, Chicago Board Options Exchange,
Incorporated (the ‘‘Exchange’’ or
‘‘CBOE’’) filed with the Securities and
Exchange Commission (‘‘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 establish
fees for options that overlie a reduced
value of the FTSE 100 Index and the
FTSE China 50 Index. 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
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00079
Fmt 4703
Sfmt 4703
1. Purpose
The Exchange proposes to amend its
Fees Schedule, effective March 29,
2016. Specifically, commencing March
29, 2016, the Exchange will list new
options on two FTSE Russell indexes.
More specifically, the Exchange
proposes to establish fees for options
that overlie a reduced value of the FTSE
100 Index (‘‘UKXM’’) and the China 50
Index ‘‘(FXTM’’).
By way of background, a specific set
of proprietary products are commonly
included or excluded from a variety of
programs, qualification calculations and
transaction fees. In lieu of listing out
these products in various sections of the
Fees Schedule, the Exchange uses the
term ‘‘Underlying Symbol List A’’ to
represent these products. Currently,
Underlying Symbol List A is defined in
Footnote 34 and represents the
following proprietary products: OEX,
XEO, RUT, RLG, RLV, RUI, SPX
(including SPXw), SPXpm, SRO, VIX,
VOLATILITY INDEXES and binary
options. The Exchange notes that the
reason the products in Underlying
Symbol List A are often collectively
included or excluded from certain
programs, qualification calculations and
transactions fees is because the
Exchange has expended considerable
resources developing and maintaining
its proprietary, exclusively-listed
products. Similar to the products
currently represented by ‘‘Underlying
Symbol List A,’’ UKXM and FXTM are
not listed on any other exchange. As
such, the Exchange proposes to exclude
or include UKXM and FXTM in the
same programs as the other products in
Underlying Symbol List A, as well as
add UKXM and FXTM to the definition
of Underlying Symbol List A in
Footnote 34. Specifically, like the other
products in Underlying Symbol List A,
the Exchange proposes to except UKXM
and FXTM from the Liquidity Provider
Sliding Scale, the Volume Incentive
Program (VIP), the Marketing Fee, the
Clearing Trading Permit Holder Fee Cap
(‘‘Fee Cap’’) and [sic] exemption from
fees for facilitation orders, and the
Order Router Subsidy (ORS) and
Complex Order Router Subsidy (CORS)
Programs. Like all other products in
Underlying Symbol List A (with the
exception of SROs), the Exchange
proposes to apply to UKXM and FXTM
E:\FR\FM\12APN1.SGM
12APN1
21612
Federal Register / Vol. 81, No. 70 / Tuesday, April 12, 2016 / Notices
the CBOE Proprietary Products Sliding
Scale. The Exchange does intend to
keep UKXM and FXTM volume in the
calculation of qualifying volume for the
rebate of Floor Broker Trading Permit
fees. The Exchange notes that although
UKXM and FXTM are being added to
‘‘Underlying Symbol List A’’, it wishes
to include UKXM and FXTM in the
calculation of the qualifying volume for
the rebate of Floor Broker Trading
Permit fees. The Exchange wishes to
continue to encourage Floor Brokers to
execute open-outcry trades in these
classes and believes that including them
in the qualifying volume will provide
such incentive.
The Exchange next proposes to
establish transaction fees for UKXM and
FXTM. Particularly, the Exchange
proposes to assess the same fees for
UKXM and FXTM as apply to RUT, RUI,
RLV and RLG options. Transaction fees
for UKXM and FXTM options will be as
follows (all listed rates are per contract):
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Customer .............................................................................................................................................................................................
Clearing Trading Permit Holder Proprietary ........................................................................................................................................
CBOE Market-Maker/DPM ..................................................................................................................................................................
Joint Back-Office, Broker-Dealer, Non-Trading Permit Holder Market-Maker, Professional/Voluntary Professional (non-AIM Electronic) ...............................................................................................................................................................................................
Joint Back-Office, Broker-Dealer, Non-Trading Permit Holder Market-Maker, Professional/Voluntary Professional (Manual and
AIM) ..................................................................................................................................................................................................
The Exchange also proposes to apply
to UKXM and FXTM, like RUI, RLV,
and RLG, and RUT, the Floor Brokerage
Fee of $0.04 per contract ($0.02 per
contract for crossed orders). The
Exchange also proposes to apply to
UKXM and FXTM the CFLEX Surcharge
Fee of $0.10 per contract for all UKXM
and FXTM orders executed
electronically on CFLEX, capped at
$250 per trade (i.e., first 2,500 contracts
per trade). The CFLEX Surcharge Fee
assists the Exchange in recouping the
cost of developing and maintaining the
CFLEX system. The Exchange notes that
the CFLEX Surcharge Fee (and $250
cap) also applies to other proprietary
index options, including products in
Underlying Symbol List A.
The Exchange currently assesses an
Index License Surcharge for RUT of
$0.45 per contract for all non-customer
orders. Because the fees associated with
the license for UKXM and FXTM are
lower than the license fees for RUT, the
Exchange proposes to assess a Surcharge
of $0.10 per contract in order to recoup
the costs associated with the UKXM and
FXTM license.
In order to promote and encourage
trading of UKXM and FXTM, the
Exchange proposes to waive all
transaction fees (including the Floor
Brokerage Fee, Index License Surcharge
and CFLEX Surcharge Fee) for UKXM
and FXTM transactions through
September 30, 2016. In order to promote
and encourage trading of RUI, RLV and
RLG, the Exchange also proposes to
extend the waiver of transaction fees
(including the Floor Brokerage Fee,
Index License Surcharge and CFLEX
Surcharge Fee) for RUI, RLV and RLG.
The Exchange proposes to amend
Footnote 40 to the Fees Schedule to
make clear that transaction fees for RUI,
RLV, RLG, UKXM and FXTM will be
waived through September 30, 2016.
The Exchange is also offering a
compensation plan to the Designated
VerDate Sep<11>2014
17:18 Apr 11, 2016
Jkt 238001
Primary Market-Maker(s) (‘‘DPM(s)’’)
appointed in FXTM or UKXM to offset
the initial DPM costs. The Exchange
proposes to add Footnote 43 to the Fees
Schedule that provides that DPM(s)
appointed for an entire month in either
FXTM or UKXM will receive a payment
of $5,000 per class per month through
December 31, 2016. Because FXTM and
UKXM are scheduled to be listed on
March 29, 2016, the appointed DPM(s)
will not have an appointment in FXTM
or UKXM for the entire month of March;
thus, the DPM(s) will not receive
compensation for March 2016. The
DPM(s) appointed for the entire month
of April, May, etc. will receive
compensation of $5,000 for each entire
month the DPM is appointed in FXTM
or UKXM through December 31, 2016.
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.3 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 4 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 facilitating 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
Fmt 4703
0.25
U.S.C. 78f(b)(4).
CBOE Fees Schedule, Specified Proprietary
Index Options Rate Table.
U.S.C. 78f(b).
4 15 U.S.C. 78f(b)(5).
Frm 00080
0.65
Section 6(b)(4) of the Act,5 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.
Particularly, the Exchange believes it
is reasonable to charge different fee
amounts to different user types in the
manner proposed because the proposed
fees are consistent with the price
differentiation that exists today for other
index products, including RUT, RUI,
RLV, and RLG. The Exchange also
believes that the proposed fee amounts
for UKXM and FXTM orders are
reasonable because the proposed fee
amounts are the same already assessed
for similar products (e.g., RUT, RUI,
RLV, and RLG), as well as are within the
range of amounts assessed for the
Exchange’s other proprietary products.6
The Exchange believes that it is
equitable and not unfairly
discriminatory to assess lower fees to
Customers as compared to other market
participants because Customer order
flow enhances liquidity on the
Exchange for the benefit of all market
participants. Specifically, customer
liquidity benefits all market participants
by providing more trading
opportunities, which attracts MarketMakers. An increase in the activity of
these market participants in turn
facilitates tighter spreads, which may
cause an additional corresponding
increase in order flow from other market
participants. The fees offered to
customers are intended to attract more
customer trading volume to the
Exchange. Moreover, the options
industry has a long history of providing
preferential pricing to Customers, and
the Exchange’s current Fees Schedule
currently does so in many places, as do
5 15
3 15
PO 00000
$0.18
0.25
0.20
6 See
Sfmt 4703
E:\FR\FM\12APN1.SGM
12APN1
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 81, No. 70 / Tuesday, April 12, 2016 / Notices
the fees structures of many other
exchanges. Finally, all fee amounts
listed as applying to Customers will be
applied equally to all Customers
(meaning that all Customers will be
assessed the same amount).
The Exchange believes that it is
equitable and not unfairly
discriminatory to, [sic] assess lower fees
to Market-Makers as compared to other
market participants other than
Customers because Market-Makers,
unlike other market participants, take
on a number of obligations, including
quoting obligations, that other market
participants do not have. Further, these
lower fees offered to Market-Makers are
intended to incent Market-Makers to
quote and trade more on the Exchange,
thereby providing more trading
opportunities for all market
participants. Additionally, the proposed
fee for Market-Makers will be applied
equally to all Market-Makers (meaning
that all Market-Makers will be assessed
the same amount). This concept also
applies to orders from all other origins.
It should also be noted that all fee
amounts described herein are intended
to attract greater order flow to the
Exchange in UKXM and FXTM which
should therefore serve to benefit all
Exchange market participants.
Similarly, it is equitable and not
unfairly discriminatory to assess lower
fees to Clearing Trading Permit Holder
Proprietary orders than those of other
market participants (except Customers
and Market-Makers) because Clearing
Trading Permit Holders also have a
number of obligations (such as
membership with the Options Clearing
Corporation), significant regulatory
burdens, and financial obligations, that
other market participants do not need to
take on. The Exchange also notes that
the UKXM and FXTM fee amounts for
each separate type of market participant
will be assessed equally 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 the proposed
AIM transaction fees for Brokers
Dealers, Non-Trading Permit Holder
Market-Makers, Professionals/Voluntary
Professionals, JBOs and Customers are
reasonable because the amounts are still
lower than assessed for AIM
transactions in other proprietary
products.7 The Exchange believes it’s
equitable and not unfairly
discriminatory to assess lower fees for
AIM executions as compared to
electronic executions because AIM is a
price-improvement mechanism, which
7 Id.
VerDate Sep<11>2014
17:18 Apr 11, 2016
Jkt 238001
the Exchange wishes to encourage and
support.
Assessing the Floor Brokerage Fee of
$0.04 per contract for non-crossed
orders and $0.02 per contract for
crossed orders to Floor Brokers (and not
other market participants) trading
UKXM and FXTM orders is equitable
and not unfairly discriminatory because
only Floor Brokers are statutorily
capable of representing orders in the
trading crowd, for which they charge a
commission. Moreover, this fee is
already assessed, in the same amounts,
to the other products in Underlying
Symbol List A, including RUT, RUI,
RLV, and RLG.
The Exchange believes that assessing
an Index License Surcharge Fee of $0.10
per contract to UKXM and FXTM
transactions is reasonable because the
Surcharge helps recoup some of the
costs associated with the license for
UKXM and FXTM options.
Additionally, the Exchange notes that
the Surcharge amount is the same as,
and in some cases lower than, the
amount assessed as an Index License
Surcharge to other index products. The
proposed Surcharge is also equitable
and not unfairly discriminatory because
the amount will be assessed to all
market participants to whom the
Surcharge applies. Not applying the
UKXM and FXTM Index License
Surcharge Fee to Customer orders is
equitable and not unfairly
discriminatory because this is designed
to attract Customer UKXM and FXTM
orders, which increases liquidity and
provides greater trading opportunities to
all market participants. Additionally, it
is equitable and not unfairly
discriminatory to assess a lower License
Index Surcharge amount to UKXM and
FXTM transactions as compared to RUT
transactions because the costs of the
license associated with RUT is greater.
Similarly, the Exchange believes
assessing a CFLEX Surcharge Fee of
$0.10 per contract for all UKXM and
FXTM orders executed electronically on
CFLEX and capping it at $250 (i.e., first
2,500 contracts per trade) is reasonable
because it is the same amount currently
charged to other proprietary index
products for the same transactions.8 The
proposed Surcharge is also equitable
and not unfairly discriminatory because
the amount will be assessed to all
market participants to whom the CFLEX
Surcharge applies.
Excepting UKXM and FXTM from the
Liquidity Provider Sliding Scale, VIP,
8 See CBOE Fees Schedule, Index Options Rate
Table—All Index Products Excluding Underlying
Symbol List A, CFLEX Surcharge Fee and Specified
Proprietary Index Options Rate Table—Underlying
Symbol List A, CFLEX Surcharge Fee.
PO 00000
Frm 00081
Fmt 4703
Sfmt 4703
21613
the Marketing Fee, the Fee Cap, and
[sic] the exemption from fees for
facilitation orders and the ORS and
CORS Programs is reasonable because
other Underlying Symbol List A
products (i.e., other products that are
exclusively-listed) are excepted from
those same items. This is equitable and
not unfairly discriminatory for the same
reason; it seems equitable to except
UKXM and FXTM from items on the
Fees Schedule from which other
proprietary products are also excepted.
The Exchange believes it is
reasonable, equitable and not unfairly
discriminatory to waive all transaction
fees, including the Floor Brokerage fee,
the License Index Surcharge and CFLEX
Surcharge Fee because it promotes and
encourages trading of these new
products and applies to all Trading
Permit Holders (‘‘TPHs’’).
Applying to UKXM and FXTM to the
CBOE Proprietary Products Sliding
Scale is reasonable because it also
applies to other Underlying Symbol List
A products. This is equitable and not
unfairly discriminatory for the same
reason; it seems equitable to apply to
UKXM and FXTM the same items on the
Fees Schedule that apply to Underlying
Symbol List A options classes (i.e.,
proprietary options classes that are not
listed on other exchanges).
The Exchange believes it’s reasonable,
equitable and not unfairly
discriminatory to continue to include
UKXM and FXTM in the calculation of
the qualifying volume for the Floor
Broker Trading Permit Fees rebate
because the Exchange wishes to support
and encourage open-outcry trading of
UKXM and FXTM, which allows for
price improvement and has a number of
positive impacts on the market system.
Finally, the Exchange believes that it
is equitable and not unfairly
discriminatory to compensate DPM(s)
that are appointed for an entire month
in either FXTM or UKXM. DPM(s) incur
costs when receiving an appointment,
and in the case of FXTM and UKXM,
the Exchange believes it is appropriate
to provide compensation to the DPM(s)
to offset those costs.
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 are
E:\FR\FM\12APN1.SGM
12APN1
21614
Federal Register / Vol. 81, No. 70 / Tuesday, April 12, 2016 / Notices
assessed to different market participants
in some circumstances, these different
market participants have different
obligations and different circumstances
as discussed above. For example,
Market-Makers have quoting obligations
that other market participants do not
have. The Exchange does not believe
that the proposed rule change to waive
all transaction fees through September
30, 2016 will impose any burden on
intramarket competition because it
applies to all TPHs and encourages
trading in these new products.
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 UKXM and FXTM will be
exclusively listed 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 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
change should be approved or
disapproved.
asabaliauskas on DSK3SPTVN1PROD 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:
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
10 17
VerDate Sep<11>2014
17:18 Apr 11, 2016
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–2016–021 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–2016–021. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–CBOE–
2016–021 and should be submitted on
or before May 3, 2016.
Sunshine Act Meeting
Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission will hold a Closed Meeting
on Thursday, April 14, 2016 at 1:00 p.m.
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the Closed Meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or her designee, has
certified that, in her opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (7), 9(B) and (10)
and 17 CFR 200.402(a)(3), (5), (7), 9(ii)
and (10), permit consideration of the
scheduled matter at the Closed Meeting.
Chair White, as duty officer, voted to
consider the items listed for the Closed
Meeting in closed session.
The subject matter of the Closed
Meeting will be:
Institution and settlement of
injunctive actions;
Institution and settlement of
administrative proceedings;
Resolution of litigation claims; and
Other matters relating to enforcement
proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
For further information and to
ascertain what, if any, matters have been
added, deleted or postponed, please
contact the Office of the Secretary at
(202) 551–5400.
Dated: April 7, 2016.
Brent J. Fields,
Secretary.
[FR Doc. 2016–08446 Filed 4–8–16; 11:15 am]
BILLING CODE 8011–01–P
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–08306 Filed 4–11–16; 8:45 am]
BILLING CODE 8011–01–P
11 17
Jkt 238001
SECURITIES AND EXCHANGE
COMMISSION
PO 00000
CFR 200.30–3(a)(12).
Frm 00082
Fmt 4703
Sfmt 9990
E:\FR\FM\12APN1.SGM
12APN1
]]>Agencies
[Federal Register Volume 81, Number 70 (Tuesday, April 12, 2016)]
[Notices]
[Pages 21611-21614]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-08306]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77547; File No. SR-CBOE-2016-021]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Establish Fees for Options That Overlie a
Reduced Value of the FTSE 100 Index and the FTSE China 50 Index
April 6, 2016.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b 4 thereunder,\2\ notice is hereby given that
on March 24, 2016, Chicago Board Options Exchange, Incorporated (the
``Exchange'' or ``CBOE'') filed with the Securities and Exchange
Commission (``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 establish fees for options that overlie a
reduced value of the FTSE 100 Index and the FTSE China 50 Index. 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, effective March
29, 2016. Specifically, commencing March 29, 2016, the Exchange will
list new options on two FTSE Russell indexes. More specifically, the
Exchange proposes to establish fees for options that overlie a reduced
value of the FTSE 100 Index (``UKXM'') and the China 50 Index
``(FXTM'').
By way of background, a specific set of proprietary products are
commonly included or excluded from a variety of programs, qualification
calculations and transaction fees. In lieu of listing out these
products in various sections of the Fees Schedule, the Exchange uses
the term ``Underlying Symbol List A'' to represent these products.
Currently, Underlying Symbol List A is defined in Footnote 34 and
represents the following proprietary products: OEX, XEO, RUT, RLG, RLV,
RUI, SPX (including SPXw), SPXpm, SRO, VIX, VOLATILITY INDEXES and
binary options. The Exchange notes that the reason the products in
Underlying Symbol List A are often collectively included or excluded
from certain programs, qualification calculations and transactions fees
is because the Exchange has expended considerable resources developing
and maintaining its proprietary, exclusively-listed products. Similar
to the products currently represented by ``Underlying Symbol List A,''
UKXM and FXTM are not listed on any other exchange. As such, the
Exchange proposes to exclude or include UKXM and FXTM in the same
programs as the other products in Underlying Symbol List A, as well as
add UKXM and FXTM to the definition of Underlying Symbol List A in
Footnote 34. Specifically, like the other products in Underlying Symbol
List A, the Exchange proposes to except UKXM and FXTM from the
Liquidity Provider Sliding Scale, the Volume Incentive Program (VIP),
the Marketing Fee, the Clearing Trading Permit Holder Fee Cap (``Fee
Cap'') and [sic] exemption from fees for facilitation orders, and the
Order Router Subsidy (ORS) and Complex Order Router Subsidy (CORS)
Programs. Like all other products in Underlying Symbol List A (with the
exception of SROs), the Exchange proposes to apply to UKXM and FXTM
[[Page 21612]]
the CBOE Proprietary Products Sliding Scale. The Exchange does intend
to keep UKXM and FXTM volume in the calculation of qualifying volume
for the rebate of Floor Broker Trading Permit fees. The Exchange notes
that although UKXM and FXTM are being added to ``Underlying Symbol List
A'', it wishes to include UKXM and FXTM in the calculation of the
qualifying volume for the rebate of Floor Broker Trading Permit fees.
The Exchange wishes to continue to encourage Floor Brokers to execute
open-outcry trades in these classes and believes that including them in
the qualifying volume will provide such incentive.
The Exchange next proposes to establish transaction fees for UKXM
and FXTM. Particularly, the Exchange proposes to assess the same fees
for UKXM and FXTM as apply to RUT, RUI, RLV and RLG options.
Transaction fees for UKXM and FXTM options will be as follows (all
listed rates are per contract):
------------------------------------------------------------------------
------------------------------------------------------------------------
Customer................................................ $0.18
Clearing Trading Permit Holder Proprietary.............. 0.25
CBOE Market-Maker/DPM................................... 0.20
Joint Back-Office, Broker-Dealer, Non-Trading Permit 0.65
Holder Market-Maker, Professional/Voluntary
Professional (non-AIM Electronic)......................
Joint Back-Office, Broker-Dealer, Non-Trading Permit 0.25
Holder Market-Maker, Professional/Voluntary
Professional (Manual and AIM)..........................
------------------------------------------------------------------------
The Exchange also proposes to apply to UKXM and FXTM, like RUI,
RLV, and RLG, and RUT, the Floor Brokerage Fee of $0.04 per contract
($0.02 per contract for crossed orders). The Exchange also proposes to
apply to UKXM and FXTM the CFLEX Surcharge Fee of $0.10 per contract
for all UKXM and FXTM orders executed electronically on CFLEX, capped
at $250 per trade (i.e., first 2,500 contracts per trade). The CFLEX
Surcharge Fee assists the Exchange in recouping the cost of developing
and maintaining the CFLEX system. The Exchange notes that the CFLEX
Surcharge Fee (and $250 cap) also applies to other proprietary index
options, including products in Underlying Symbol List A.
The Exchange currently assesses an Index License Surcharge for RUT
of $0.45 per contract for all non-customer orders. Because the fees
associated with the license for UKXM and FXTM are lower than the
license fees for RUT, the Exchange proposes to assess a Surcharge of
$0.10 per contract in order to recoup the costs associated with the
UKXM and FXTM license.
In order to promote and encourage trading of UKXM and FXTM, the
Exchange proposes to waive all transaction fees (including the Floor
Brokerage Fee, Index License Surcharge and CFLEX Surcharge Fee) for
UKXM and FXTM transactions through September 30, 2016. In order to
promote and encourage trading of RUI, RLV and RLG, the Exchange also
proposes to extend the waiver of transaction fees (including the Floor
Brokerage Fee, Index License Surcharge and CFLEX Surcharge Fee) for
RUI, RLV and RLG. The Exchange proposes to amend Footnote 40 to the
Fees Schedule to make clear that transaction fees for RUI, RLV, RLG,
UKXM and FXTM will be waived through September 30, 2016.
The Exchange is also offering a compensation plan to the Designated
Primary Market-Maker(s) (``DPM(s)'') appointed in FXTM or UKXM to
offset the initial DPM costs. The Exchange proposes to add Footnote 43
to the Fees Schedule that provides that DPM(s) appointed for an entire
month in either FXTM or UKXM will receive a payment of $5,000 per class
per month through December 31, 2016. Because FXTM and UKXM are
scheduled to be listed on March 29, 2016, the appointed DPM(s) will not
have an appointment in FXTM or UKXM for the entire month of March;
thus, the DPM(s) will not receive compensation for March 2016. The
DPM(s) appointed for the entire month of April, May, etc. will receive
compensation of $5,000 for each entire month the DPM is appointed in
FXTM or UKXM through December 31, 2016.
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.\3\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \4\ 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 facilitating
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,\5\ 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.
---------------------------------------------------------------------------
\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(5).
\5\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
Particularly, the Exchange believes it is reasonable to charge
different fee amounts to different user types in the manner proposed
because the proposed fees are consistent with the price differentiation
that exists today for other index products, including RUT, RUI, RLV,
and RLG. The Exchange also believes that the proposed fee amounts for
UKXM and FXTM orders are reasonable because the proposed fee amounts
are the same already assessed for similar products (e.g., RUT, RUI,
RLV, and RLG), as well as are within the range of amounts assessed for
the Exchange's other proprietary products.\6\
---------------------------------------------------------------------------
\6\ See CBOE Fees Schedule, Specified Proprietary Index Options
Rate Table.
---------------------------------------------------------------------------
The Exchange believes that it is equitable and not unfairly
discriminatory to assess lower fees to Customers as compared to other
market participants because Customer order flow enhances liquidity on
the Exchange for the benefit of all market participants. Specifically,
customer liquidity benefits all market participants by providing more
trading opportunities, which attracts Market-Makers. An increase in the
activity of these market participants in turn facilitates tighter
spreads, which may cause an additional corresponding increase in order
flow from other market participants. The fees offered to customers are
intended to attract more customer trading volume to the Exchange.
Moreover, the options industry has a long history of providing
preferential pricing to Customers, and the Exchange's current Fees
Schedule currently does so in many places, as do
[[Page 21613]]
the fees structures of many other exchanges. Finally, all fee amounts
listed as applying to Customers will be applied equally to all
Customers (meaning that all Customers will be assessed the same
amount).
The Exchange believes that it is equitable and not unfairly
discriminatory to, [sic] assess lower fees to Market-Makers as compared
to other market participants other than Customers because Market-
Makers, unlike other market participants, take on a number of
obligations, including quoting obligations, that other market
participants do not have. Further, these lower fees offered to Market-
Makers are intended to incent Market-Makers to quote and trade more on
the Exchange, thereby providing more trading opportunities for all
market participants. Additionally, the proposed fee for Market-Makers
will be applied equally to all Market-Makers (meaning that all Market-
Makers will be assessed the same amount). This concept also applies to
orders from all other origins. It should also be noted that all fee
amounts described herein are intended to attract greater order flow to
the Exchange in UKXM and FXTM which should therefore serve to benefit
all Exchange market participants. Similarly, it is equitable and not
unfairly discriminatory to assess lower fees to Clearing Trading Permit
Holder Proprietary orders than those of other market participants
(except Customers and Market-Makers) because Clearing Trading Permit
Holders also have a number of obligations (such as membership with the
Options Clearing Corporation), significant regulatory burdens, and
financial obligations, that other market participants do not need to
take on. The Exchange also notes that the UKXM and FXTM fee amounts for
each separate type of market participant will be assessed equally 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 the proposed AIM transaction fees for Brokers
Dealers, Non-Trading Permit Holder Market-Makers, Professionals/
Voluntary Professionals, JBOs and Customers are reasonable because the
amounts are still lower than assessed for AIM transactions in other
proprietary products.\7\ The Exchange believes it's equitable and not
unfairly discriminatory to assess lower fees for AIM executions as
compared to electronic executions because AIM is a price-improvement
mechanism, which the Exchange wishes to encourage and support.
---------------------------------------------------------------------------
\7\ Id.
---------------------------------------------------------------------------
Assessing the Floor Brokerage Fee of $0.04 per contract for non-
crossed orders and $0.02 per contract for crossed orders to Floor
Brokers (and not other market participants) trading UKXM and FXTM
orders is equitable and not unfairly discriminatory because only Floor
Brokers are statutorily capable of representing orders in the trading
crowd, for which they charge a commission. Moreover, this fee is
already assessed, in the same amounts, to the other products in
Underlying Symbol List A, including RUT, RUI, RLV, and RLG.
The Exchange believes that assessing an Index License Surcharge Fee
of $0.10 per contract to UKXM and FXTM transactions is reasonable
because the Surcharge helps recoup some of the costs associated with
the license for UKXM and FXTM options. Additionally, the Exchange notes
that the Surcharge amount is the same as, and in some cases lower than,
the amount assessed as an Index License Surcharge to other index
products. The proposed Surcharge is also equitable and not unfairly
discriminatory because the amount will be assessed to all market
participants to whom the Surcharge applies. Not applying the UKXM and
FXTM Index License Surcharge Fee to Customer orders is equitable and
not unfairly discriminatory because this is designed to attract
Customer UKXM and FXTM orders, which increases liquidity and provides
greater trading opportunities to all market participants. Additionally,
it is equitable and not unfairly discriminatory to assess a lower
License Index Surcharge amount to UKXM and FXTM transactions as
compared to RUT transactions because the costs of the license
associated with RUT is greater.
Similarly, the Exchange believes assessing a CFLEX Surcharge Fee of
$0.10 per contract for all UKXM and FXTM orders executed electronically
on CFLEX and capping it at $250 (i.e., first 2,500 contracts per trade)
is reasonable because it is the same amount currently charged to other
proprietary index products for the same transactions.\8\ The proposed
Surcharge is also equitable and not unfairly discriminatory because the
amount will be assessed to all market participants to whom the CFLEX
Surcharge applies.
---------------------------------------------------------------------------
\8\ See CBOE Fees Schedule, Index Options Rate Table--All Index
Products Excluding Underlying Symbol List A, CFLEX Surcharge Fee and
Specified Proprietary Index Options Rate Table--Underlying Symbol
List A, CFLEX Surcharge Fee.
---------------------------------------------------------------------------
Excepting UKXM and FXTM from the Liquidity Provider Sliding Scale,
VIP, the Marketing Fee, the Fee Cap, and [sic] the exemption from fees
for facilitation orders and the ORS and CORS Programs is reasonable
because other Underlying Symbol List A products (i.e., other products
that are exclusively-listed) are excepted from those same items. This
is equitable and not unfairly discriminatory for the same reason; it
seems equitable to except UKXM and FXTM from items on the Fees Schedule
from which other proprietary products are also excepted.
The Exchange believes it is reasonable, equitable and not unfairly
discriminatory to waive all transaction fees, including the Floor
Brokerage fee, the License Index Surcharge and CFLEX Surcharge Fee
because it promotes and encourages trading of these new products and
applies to all Trading Permit Holders (``TPHs'').
Applying to UKXM and FXTM to the CBOE Proprietary Products Sliding
Scale is reasonable because it also applies to other Underlying Symbol
List A products. This is equitable and not unfairly discriminatory for
the same reason; it seems equitable to apply to UKXM and FXTM the same
items on the Fees Schedule that apply to Underlying Symbol List A
options classes (i.e., proprietary options classes that are not listed
on other exchanges).
The Exchange believes it's reasonable, equitable and not unfairly
discriminatory to continue to include UKXM and FXTM in the calculation
of the qualifying volume for the Floor Broker Trading Permit Fees
rebate because the Exchange wishes to support and encourage open-outcry
trading of UKXM and FXTM, which allows for price improvement and has a
number of positive impacts on the market system.
Finally, the Exchange believes that it is equitable and not
unfairly discriminatory to compensate DPM(s) that are appointed for an
entire month in either FXTM or UKXM. DPM(s) incur costs when receiving
an appointment, and in the case of FXTM and UKXM, the Exchange believes
it is appropriate to provide compensation to the DPM(s) to offset those
costs.
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
are
[[Page 21614]]
assessed to different market participants in some circumstances, these
different market participants have different obligations and different
circumstances as discussed above. For example, Market-Makers have
quoting obligations that other market participants do not have. The
Exchange does not believe that the proposed rule change to waive all
transaction fees through September 30, 2016 will impose any burden on
intramarket competition because it applies to all TPHs and encourages
trading in these new products.
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 UKXM and
FXTM will be exclusively listed 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 \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 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-2016-021 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-2016-021. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-CBOE-2016-021 and should be
submitted on or before May 3, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-08306 Filed 4-11-16; 8:45 am]
BILLING CODE 8011-01-P
