Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule, 44008-44010 [2017-19966]
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Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices
the competitive product list, or the
modification of an existing product
currently appearing on the market
dominant or the competitive product
list.
Section II identifies the docket
number(s) associated with each Postal
Service request, the title of each Postal
Service request, the request’s acceptance
date, and the authority cited by the
Postal Service for each request. For each
request, the Commission appoints an
officer of the Commission to represent
the interests of the general public in the
proceeding, pursuant to 39 U.S.C. 505
(Public Representative). Section II also
establishes comment deadline(s)
pertaining to each request.
The public portions of the Postal
Service’s request(s) can be accessed via
the Commission’s Web site (https://
www.prc.gov). Non-public portions of
the Postal Service’s request(s), if any,
can be accessed through compliance
with the requirements of 39 CFR
3007.40.
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
with the policies of title 39. For
request(s) that the Postal Service states
concern market dominant product(s),
applicable statutory and regulatory
requirements include 39 U.S.C. 3622, 39
U.S.C. 3642, 39 CFR part 3010, and 39
CFR part 3020, subpart B. For request(s)
that the Postal Service states concern
competitive product(s), applicable
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3015, and
39 CFR part 3020, subpart B. Comment
deadline(s) for each request appear in
section II.
sradovich on DSKBBY8HB2PROD with NOTICES
II. Docketed Proceeding(s)
1. Docket No(s).: CP2017–307; Filing
Title: Notice of United States Postal
Service of Filing a Functionally
Equivalent Global Expedited Package
Services 8 Negotiated Service
Agreement and Application for NonPublic Treatment of Materials Filed
Under Seal; Filing Acceptance Date:
September 14, 2017; Filing Authority: 39
CFR 3015.5; Public Representative:
Timothy J. Schwuchow; Comments Due:
September 22, 2017.
2. Docket No(s).: CP2017–308; Filing
Title: Notice of United States Postal
Service of Filing a Functionally
Equivalent Global Expedited Package
Services 8 Negotiated Service
Agreement and Application for NonPublic Treatment of Materials Filed
Under Seal; Filing Acceptance Date:
September 14, 2017; Filing Authority: 39
CFR 3015.5; Public Representative:
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Timothy J. Schwuchow; Comments Due:
September 22, 2017.
3. Docket No(s).: CP2017–309; Filing
Title: Notice of United States Postal
Service of Filing a Functionally
Equivalent Global Expedited Package
Services 3 Negotiated Service
Agreement and Application for NonPublic Treatment of Materials Filed
Under Seal; Filing Acceptance Date:
September 14, 2017; Filing Authority: 39
CFR 3015.5; Public Representative:
Jennaca D. Upperman; Comments Due:
September 22, 2017.
This notice will be published in the
Federal Register.
Stacy L. Ruble,
Secretary.
[FR Doc. 2017–20027 Filed 9–19–17; 8:45 am]
BILLING CODE 7710–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81614; File No. SR–CBOE–
2017–060]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the Fees
Schedule
September 14, 2017.
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
September 1, 2017, Chicago Board
Options Exchange, Incorporated (the
‘‘Exchange’’ or ‘‘CBOE’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
Fees Schedule. Specifically, the
Exchange proposes to adopt a discount
in the form of a cap on transaction fees
for Market-Maker, Broker-Dealer, NonTrading Permit Holder Market-Maker,
Professional/Voluntary Professional and
Joint Back-Office executions in VIX.
The text of the proposed rule change
is also available on the Exchange’s Web
site (https://www.cboe.com/AboutCBOE/
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00077
Fmt 4703
Sfmt 4703
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. Specifically, the
Exchange proposes to adopt a discount
in the form of a cap on transaction fees
for Market-Maker, Broker-Dealer, NonTrading Permit Holder Market-Maker,
Professional/Voluntary Professional and
Joint Back-Office (i.e., ‘‘M’’, ‘‘B’’, ‘‘N’’,
‘‘W’’ and ‘‘J’’ origin codes) executions in
VIX (the ‘‘VIX Large Trade Discount’’).
Particularly, regular transaction fees
will only be charged for up to 250,000
VIX options contracts per order for
Market-Makers, Broker-Dealers, NonTrading Permit Holder Market-Makers,
Professional/Voluntary Professionals
and Joint Back-Offices.3 The Exchange
notes that the proposed VIX Large Trade
Discount is similar to the Customer
Large Trade Discount (‘‘CLTD’’) program
which places a cap on the quantity of
Customer contracts (i.e., ‘‘C’’ origin
code) that are assessed transaction fees
in certain options classes, including
VIX.4 Like the CLTD program, the Large
Trade Discount will apply both in the
Regular Trading Hours (‘‘RTH’’) Session
and the Extended Trading Hours
(‘‘ETH’’) Session, but for an order to be
eligible to qualify for the discount, the
order in its entirety must be executed in
either RTH or ETH, but not both).5 Also
3 The discount will be on transaction fees only.
Other fees, such as the Index License Surcharge,
will not be discounted.
4 See CBOE’s Fees Schedule, Customer Large
Trade Discount program.
5 The Exchange notes that the trading sessions has
separate order books and require separate logins for
access, and as there is no ‘‘rolling’’ of orders by the
Exchange between the two sessions, in order to be
eligible to qualify for the VIX Large Trade Discount,
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sradovich on DSKBBY8HB2PROD with NOTICES
like the CLTD program, qualification of
an order for the fee cap is based on the
trade date and order ID on each order.
For complex orders, the total contracts
of an order (all legs by underlying
symbol) are counted for purposes of
calculating the fee cap. To qualify for
the discount, the entire order quantity
must be tied to a single order ID (unless
the order is a complex order with a
number of legs that exceeds system
limitations) either within the CBOE
Command system or PULSe or in the
front end system used to enter and/or
transmit the order (provided the
Exchange is granted access to effectively
audit such front end system) (the order
must be entered in its entirety on one
system so that the Exchange can clearly
identify the total size of the order). For
an order entered via PULSe or another
front end system, or a complex order
with multiple order IDs, a request must
be submitted to the Exchange within 3
business days of the transactions and
must identify all necessary information,
including the order ID and related trade
details. Lastly, as noted above, only
regular transaction fees are capped. To
avoid potential confusion, however the
Exchange proposes to make clear that
floor brokerage fees are not subject to
the cap on fees.
The Exchange proposes to adopt the
VIX Large Trade Discount in order to
incentivize the sending of large VIX
orders. The greater liquidity and trading
volume that the proposed cap
encourages would benefit all market
participants trading VIX options.
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 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
an order must be executed in its entirety in either
RTH or ETH, but not partly in both.
6 15 U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
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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 adopting
the VIX Large Trade Discount is
reasonable because Market-Makers,
Broker-Dealers, Non-Trading Permit
Holder Market-Makers, Professional/
Voluntary Professionals and Joint BackOffices participants (i.e., non-Customer,
non-Firm market participants) will
receive a discount for very large trades
that they would not otherwise receive,
which promotes and encourages larger
VIX executions on the Exchange. This
change is equitable and not unfairly
discriminatory because all nonCustomer, non-Firm market participants
whose large trades qualify for the
discount in VIX will receive it. The
Exchange believes it’s equitable and not
unfairly discriminatory to adopt a cap
on transaction fees for VIX and not other
products because the Exchange desires
to encourage VIX trading, which, along
with bringing greater VIX options
trading opportunities to all market
participants [sic]. The Exchange
believes that it is not unfairly
discriminatory to not apply the
proposed cap to Customers, as
Customers are eligible for a discount on
VIX discount under the CLTD program.
The Exchange believes that it is not
unfairly discriminatory to not apply the
proposed VIX Large Trade Discount
program to Firms (i.e., Clearing Trading
Holder Proprietary, ‘‘F’’ and ‘‘L’’ origin
codes), as Firms are eligible for
discounts on VIX under the CBOE
Clearing Trading Permit Holder
Proprietary Products Sliding Scales.
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 the cap does not apply to
Customers and Firms, other incentive
programs already exist for those market
participants with respect to VIX trading.
Additionally, the proposed change is
designed to encourage increased VIX
options volume, which provides greater
trading opportunities for all market
participants. The Exchange believes that
the proposed rule change will not cause
an unnecessary burden on intermarket
competition because VIX is 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.
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.
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–2017–060 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CBOE–2017–060. 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
9 15
8 15
PO 00000
U.S.C. 78f(b)(4).
Frm 00078
Fmt 4703
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
10 17
Sfmt 4703
44009
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Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices
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–
2017–060 and should be submitted on
or before October 11, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–19966 Filed 9–19–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81616; File Nos. SR–CHX–
2017–11; SR–FINRA–2017–020]
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.;
Financial Industry Regulatory
Authority, Inc.; Order Approving
Proposed Rule Changes, as Modified
by Amendments, To Adopt a
Consolidated Audit Trail Fee Dispute
Resolution Process
September 14, 2017.
sradovich on DSKBBY8HB2PROD with NOTICES
I. Introduction
On June 5, 2017 1 and June 19, 2017,2
Chicago Stock Exchange, Inc. (‘‘CHX’’)
and Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) (each, ‘‘SRO’’
or ‘‘Participant;’’ collectively, the
11 17
CFR 200.30–3(a)(12).
Stock Exchange, Inc. filed its proposed
rule change on June 5, 2017.
2 Financial Industry Regulatory Authority, Inc.
filed its proposed rule change on June 19, 2017.
1 Chicago
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18:28 Sep 19, 2017
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‘‘Participants’’) 3 filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 4 and Rule 19b–4
thereunder,5 proposed rule changes to
establish the procedures for resolving
potential disputes related to CAT Fees
charged to Industry Members.6 The
proposed rule change submitted by CHX
was published for comment in the
Federal Register on June 19, 2017.7 The
proposed rule change submitted by
FINRA was published for comment in
the Federal Register on July 6, 2017.8
Pursuant to Section 19(b)(2) of the Act,9
the Commission designated a longer
period within which to approve,
disapprove, or institute proceedings to
determine whether to approve or
disapprove the proposed rule changes.10
3 The Commission notes that Bats BYX Exchange,
Inc. (‘‘Bats BYX’’), Bats BZX Exchange, Inc. (‘‘Bats
BZX’’), Bats EDGA Exchange, Inc. (‘‘Bats EDGA’’),
Bats EDGX Exchange, Inc. (‘‘Bats EDGX’’), BOX
Options Exchange LLC (‘‘BOX’’), C2 Options
Exchange, Inc., Chicago Board Options Exchange,
Incorporated (‘‘CBOE’’), Investors Exchange LLC
(‘‘IEX’’), Nasdaq ISE, LLC (‘‘ISE’’), Nasdaq MRX,
LLC (‘‘MRX’’), Miami International Securities
Exchange, LLC (‘‘MIAX’’), MIAX PEARL, LLC, The
NASDAQ Stock Market LLC (‘‘Nasdaq’’), NASDAQ
BX, Inc. (‘‘BX’’), Nasdaq GEMX, LLC (‘‘GEMX’’),
NASDAQ PHLX LLC (‘‘Phlx’’), New York Stock
Exchange LLC (‘‘NYSE’’), NYSE Arca, Inc. (‘‘NYSE
Arca’’), NYSE MKT LLC (‘‘NYSE MKT’’) and NYSE
National, Inc. are also deemed ‘‘Participants’’ for
purposes of this Order as they, like CHX and
FINRA, are also Participants of the National Market
System Plan Governing the Consolidated Audit
Trail (‘‘CAT NMS Plan’’ or ‘‘Plan’’). See infra note
17. The Commission also notes that CHX refers to
Participants of the Plan as ‘‘Plan Participants’’ in its
proposal.
4 15 U.S.C. 78s(b)(1).
5 17 CFR 240.19b–4.
6 Bats BYX, Bats BZX, Bats EDGA, Bats EDGX,
BOX, CBOE, IEX, ISE, MRX, MIAX, Nasdaq, BX,
GEMX, Phlx, NYSE, NYSE Arca and NYSE MKT
also submitted proposed rule changes to establish
procedures for resolving potential disputes related
to CAT Fees charged to Industry Members. See
Securities Exchange Act Release Nos. 80780 (May
26, 2017), 82 FR 25382 (June 1, 2017); 80781 (May
26, 2017), 82 FR 25369 (June 1, 2017); 80782 (May
26, 2017), 82 FR 25379 (June 1, 2017); 80837 (June
1, 2017), 82 FR 26526 (June 7, 2017); 80836 (June
1, 2017), 82 FR 26539 (June 7, 2017); 80834 (June
1, 2017), 82 FR 26542 (June 7, 2017); 80835 (June
1, 2017), 82 FR 26549 (June 7, 2017); 80833 (June
1, 2017), 82 FR 26529 (June 7, 2017); 80831 (June
1, 2017), 82 FR 26536 (June 7, 2017); 80832 (June
1, 2017), 82 FR 26523 (June 7, 2017); 80936 (June
15, 2017), 82 FR 28153 (June 20, 2017); 80952 (June
16, 2017), 82 FR 28540 (June 22, 2017); 80967 (June
19, 2017), 82 FR 28719 (June 23, 2017); 80968 (June
19, 2017), 82 FR 28705 (June 23, 2017); 80970 (June
19, 2017), 82 FR 28708 (June 23, 2017); 80971 (June
19, 2017), 82 FR 28698 (June 23, 2017); and 80966
(June 19, 2017), 82 FR 28702 (June 23, 2017).
7 See Securities Exchange Act Release No. 80916
(June 13, 2017), 82 FR 27904 (‘‘Notice’’).
8 See Securities Exchange Act Release No. 81053
(June 29, 2017), 82 FR 31366.
9 15 U.S.C. 78s(b)(2).
10 See Securities Exchange Act Release No. 81163
(July 18, 2017), 82 FR 34343 (July 24, 2017); 81275
(August 1, 2017), 82 FR 36836 (August 7, 2017). See
PO 00000
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The Commission received no comments
in response to the proposed rule
changes. On September 6, 2017, CHX
filed Amendment No. 1 to its proposed
rule change,11 and on September 13,
2017, FINRA filed Amendment No. 2 to
its proposed rule change.12 This order
approves the proposed rule changes, as
modified by the Amendments.13
II. Description of the Proposed Rule
Changes, as Modified by the
Amendments 14
The Participants filed with the
Commission, pursuant to Section 11A of
the Act 15 and Rule 608 of Regulation
also Securities Exchange Act Release No. 81110
(July 10, 2017), 82 FR 32598 (July 14, 2017); 81112
(July 10, 2017), 82 FR 32592 (July 14, 2017); 81113
(July 10, 2017), 82 FR 32596 (July 14, 2017); 81156
(July 18, 2017), 82 FR 34337 (July 24, 2017); 81157
(July 18, 2017), 82 FR 34338 (July 24, 2017); 81158
(July 18, 2017), 82 FR 34339 (July 24, 2017); 81159
(July 18, 2017), 82 FR 34338 (July 24, 2017); 81161
(July 18, 2017), 82 FR 34337 (July 24, 2017); 81162
(July 18, 2017), 82 FR 34336 (July 24, 2017); 81164
(July 18, 2017), 82 FR 34346 (July 24, 2017); 81165
(July 18, 2017), 82 FR 34345 (July 24, 2017); 81166
(July 18, 2017), 82 FR 34345 (July 24, 2017); 81167
(July 18, 2017), 82 FR 34337 (July 24, 2017); 81178
(July 20, 2017), 82 FR 34715 (July 26, 2017); 81179
(July 20, 2017), 82 FR 34716 (July 26, 2017); 81180
(July 20, 2017), 82 FR 34728 (July 26, 2017); and
81181 (July 20, 2017), 82 FR 34727 (July 26, 2017).
11 Amendment No. 1 is available on the
Commission’s Web site for CHX at: https://
www.sec.gov/comments/sr-chx-2017-11/chx2017112433023-161039.pdf.
12 Amendment No. 2 replaced and superseded
Amendment No. 1 in its entirety. Amendment No.
2 is available on the Commission’s Web site for
FINRA at: https://www.sec.gov/comments/sr-finra2017-020/finra2017020-2442749-161061.pdf.
13 The Amendments amended the original filings
to make technical changes to the proposed rule
changes. Specifically, each Participant amended the
proposed rule text to remove references to proposed
‘‘Consolidated Audit Trail Funding Fees,’’ as such
fees are currently suspended, and replaced such
term with the phrase ‘‘any fees contemplated by the
CAT NMS Plan and imposed on Industry Members
pursuant to [SRO] Rules.’’ See infra note 18. Each
Participant also removed references to
‘‘Consolidated Audit Trail Funding Fees’’ from
paragraphs (a)(1), (b) and (c)(1) of the proposed rule
text. The Amendments are not subject to notice and
comment because they are technical amendments
that do not materially alter the substance of the
proposed rule changes or raise any novel regulatory
issues. The Commission notes that on August 30,
2017, the Commission approved the proposed rule
changes filed by the other Participants to the CAT
NMS Plan to establish procedures for resolving
potential disputes related to CAT Fees charged to
Industry Members, as modified by such
amendments. See Securities Exchange Act Release
No. 81500 (August 30, 2017), 82 FR 42143
(September 6, 2017) (order approving proposed rule
changes by Bats BYX, Bats BZX, Bats EDGA, Bats
EDGX, BOX, CBOE, IEX, ISE, MRX, MIAX, Nasdaq,
BX, GEMX, Phlx, NYSE, NYSE Arca and NYSE
MKT to adopt a Consolidated Audit Trail Fee
Dispute Resolution Process), at 42144 n.19. See also
supra note 6.
14 The Commission notes that for purposes of this
Order, unless otherwise specified, capitalized terms
used in this Order are defined as set forth in the
proposals, as modified by the Amendments, or in
the CAT NMS Plan. See supra notes 11–12; see also
infra note 17.
15 15 U.S.C. 78k–1.
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]]>Agencies
[Federal Register Volume 82, Number 181 (Wednesday, September 20, 2017)]
[Notices]
[Pages 44008-44010]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-19966]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-81614; File No. SR-CBOE-2017-060]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend the Fees Schedule
September 14, 2017.
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 September 1, 2017, Chicago Board Options Exchange, Incorporated
(the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I, II, and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend its Fees Schedule. Specifically, the
Exchange proposes to adopt a discount in the form of a cap on
transaction fees for Market-Maker, Broker-Dealer, Non-Trading Permit
Holder Market-Maker, Professional/Voluntary Professional and Joint
Back-Office executions in VIX.
The text of the proposed rule change is also 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. Specifically, the
Exchange proposes to adopt a discount in the form of a cap on
transaction fees for Market-Maker, Broker-Dealer, Non-Trading Permit
Holder Market-Maker, Professional/Voluntary Professional and Joint
Back-Office (i.e., ``M'', ``B'', ``N'', ``W'' and ``J'' origin codes)
executions in VIX (the ``VIX Large Trade Discount''). Particularly,
regular transaction fees will only be charged for up to 250,000 VIX
options contracts per order for Market-Makers, Broker-Dealers, Non-
Trading Permit Holder Market-Makers, Professional/Voluntary
Professionals and Joint Back-Offices.\3\ The Exchange notes that the
proposed VIX Large Trade Discount is similar to the Customer Large
Trade Discount (``CLTD'') program which places a cap on the quantity of
Customer contracts (i.e., ``C'' origin code) that are assessed
transaction fees in certain options classes, including VIX.\4\ Like the
CLTD program, the Large Trade Discount will apply both in the Regular
Trading Hours (``RTH'') Session and the Extended Trading Hours
(``ETH'') Session, but for an order to be eligible to qualify for the
discount, the order in its entirety must be executed in either RTH or
ETH, but not both).\5\ Also
[[Page 44009]]
like the CLTD program, qualification of an order for the fee cap is
based on the trade date and order ID on each order. For complex orders,
the total contracts of an order (all legs by underlying symbol) are
counted for purposes of calculating the fee cap. To qualify for the
discount, the entire order quantity must be tied to a single order ID
(unless the order is a complex order with a number of legs that exceeds
system limitations) either within the CBOE Command system or PULSe or
in the front end system used to enter and/or transmit the order
(provided the Exchange is granted access to effectively audit such
front end system) (the order must be entered in its entirety on one
system so that the Exchange can clearly identify the total size of the
order). For an order entered via PULSe or another front end system, or
a complex order with multiple order IDs, a request must be submitted to
the Exchange within 3 business days of the transactions and must
identify all necessary information, including the order ID and related
trade details. Lastly, as noted above, only regular transaction fees
are capped. To avoid potential confusion, however the Exchange proposes
to make clear that floor brokerage fees are not subject to the cap on
fees.
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\3\ The discount will be on transaction fees only. Other fees,
such as the Index License Surcharge, will not be discounted.
\4\ See CBOE's Fees Schedule, Customer Large Trade Discount
program.
\5\ The Exchange notes that the trading sessions has separate
order books and require separate logins for access, and as there is
no ``rolling'' of orders by the Exchange between the two sessions,
in order to be eligible to qualify for the VIX Large Trade Discount,
an order must be executed in its entirety in either RTH or ETH, but
not partly in both.
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The Exchange proposes to adopt the VIX Large Trade Discount in
order to incentivize the sending of large VIX orders. The greater
liquidity and trading volume that the proposed cap encourages would
benefit all market participants trading VIX options.
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 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. 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.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
\8\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that adopting the VIX Large Trade Discount is
reasonable because Market-Makers, Broker-Dealers, Non-Trading Permit
Holder Market-Makers, Professional/Voluntary Professionals and Joint
Back-Offices participants (i.e., non-Customer, non-Firm market
participants) will receive a discount for very large trades that they
would not otherwise receive, which promotes and encourages larger VIX
executions on the Exchange. This change is equitable and not unfairly
discriminatory because all non-Customer, non-Firm market participants
whose large trades qualify for the discount in VIX will receive it. The
Exchange believes it's equitable and not unfairly discriminatory to
adopt a cap on transaction fees for VIX and not other products because
the Exchange desires to encourage VIX trading, which, along with
bringing greater VIX options trading opportunities to all market
participants [sic]. The Exchange believes that it is not unfairly
discriminatory to not apply the proposed cap to Customers, as Customers
are eligible for a discount on VIX discount under the CLTD program. The
Exchange believes that it is not unfairly discriminatory to not apply
the proposed VIX Large Trade Discount program to Firms (i.e., Clearing
Trading Holder Proprietary, ``F'' and ``L'' origin codes), as Firms are
eligible for discounts on VIX under the CBOE Clearing Trading Permit
Holder Proprietary Products Sliding Scales.
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 the cap does not
apply to Customers and Firms, other incentive programs already exist
for those market participants with respect to VIX trading.
Additionally, the proposed change is designed to encourage increased
VIX options volume, which provides greater trading opportunities for
all market participants. The Exchange believes that the proposed rule
change will not cause an unnecessary burden on intermarket competition
because VIX is 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.
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.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-CBOE-2017-060 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-CBOE-2017-060. 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
[[Page 44010]]
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-2017-060 and should be
submitted on or before October 11, 2017.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-19966 Filed 9-19-17; 8:45 am]
BILLING CODE 8011-01-P
