Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To Amend its Fees Schedule, 6445-6450 [2019-03332]
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Federal Register / Vol. 84, No. 39 / Wednesday, February 27, 2019 / Notices
nrc.gov. The DG–1328 is available in
ADAMS under Accession No.
ML18093A675.
• NRC’s PDR: You may examine and
purchase copies of public documents at
the NRC’s PDR, Room O1–F21, One
White Flint North, 11555 Rockville
Pike, Rockville, Maryland 20852.
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B. Submitting Comments
Please include Docket ID NRC–2019–
0061 in your comment submission.
The NRC cautions you not to include
identifying or contact information that
you do not want to be publicly
disclosed in your comment submission.
The NRC posts all comment
submissions at https://
www.regulations.gov as well as enters
the comment submissions into ADAMS.
The NRC does not routinely edit
comment submissions to remove
identifying or contact information.
If you are requesting or aggregating
comments from other persons for
submission to the NRC, then you should
inform those persons not to include
identifying or contact information that
they do not want to be publicly
disclosed in their comment submission.
Your request should state that the NRC
does not routinely edit comment
submissions to remove such information
before making the comment
submissions available to the public or
entering the comment submissions into
ADAMS.
II. Additional Information
The NRC is issuing for public
comment a DG in the NRC’s ‘‘Regulatory
Guide’’ series. This series was
developed to describe and make
available to the public information
regarding methods that are acceptable to
the NRC staff for implementing specific
parts of the NRC’s regulations,
techniques that the staff uses in
evaluating specific issues or postulated
events, and data that the staff needs in
its review of applications for permits
and licenses.
The DG, entitled, ‘‘Seismic
Qualification of Electrical and Active
Mechanical Equipment and Functional
Qualification of Active Mechanical
Equipment for Nuclear Power Plants,’’ is
proposed revision 4 of RG 1.100 of the
same name. It is temporarily identified
by its task number, DG–1328. The guide
describes methods that the NRC staff
considers acceptable for use in the
seismic qualification of electrical and
active mechanical equipment and the
functional qualification of active
mechanical equipment for nuclear
power plants.
This proposed guide was revised to
endorse, with exceptions and
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clarifications the following industry
consensus standards: (1) Institute of
Electrical and Electronics Engineers
(IEEE) Standard (Std) 344–2013, ‘‘IEEE
Standard for Seismic Qualification of
Equipment for Nuclear Power
Generating Stations,’’ (2) IEEE Std
C37.98–2013, ‘‘Standard Qualification
Testing of Protective Relays and
Auxiliaries for Nuclear Facilities,’’ and
(3) American Society of Mechanical
Engineers (ASME) QME–1–2017,
‘‘Qualification of Active Mechanical
Equipment Used in Nuclear Facilities.’’
III. Backfitting and Issue Finality
As discussed in the ‘‘Implementation’’
section of DG–1328, the NRC has no
current intention to impose this draft
regulatory guide on holders of current
operating licenses or combined licenses.
Accordingly, the issuance of this draft
regulatory guide, if finalized, would not
constitute ‘‘backfitting’’ as defined in
Title 10 of the Code of Federal
Regulations (10 CFR) 50.109(a)(1) of the
Backfit Rule or be otherwise
inconsistent with the applicable issue
finality provisions in 10 CFR part 52.
This draft regulatory guide may be
applied to applications for operating
licenses and combined licenses
docketed by the NRC as of the date of
issuance of the final regulatory guide, as
well as future applications for operating
licenses and combined licenses
submitted after the issuance of the
regulatory guide. Such action would not
constitute backfitting as defined in 10
CFR 50.109(a)(1) or be otherwise
inconsistent with the applicable issue
finality provision in 10 CFR part 52,
inasmuch as such applicants or
potential applicants are not within the
scope of entities protected by the Backfit
Rule or the relevant issue finality
provisions in Part 52.
Dated at Rockville, Maryland, this 21st day
of February, 2019.
For the Nuclear Regulatory Commission.
Thomas H. Boyce,
Chief, Regulatory Guidance and Generic
Issues Branch, Division of Engineering, Office
of Nuclear Regulatory Research.
[FR Doc. 2019–03338 Filed 2–26–19; 8:45 am]
BILLING CODE 7590–01–P
RAILROAD RETIREMENT BOARD
Sunshine Act: Notice of Public Meeting
Notice is hereby given that the
Railroad Retirement Board will hold a
meeting on March 5, 2019, 1:00 p.m. at
the Board’s meeting room on the 8th
floor of its headquarters building, 844
North Rush Street, Chicago, Illinois,
60611.
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6445
The meeting will be open to the
public and the agenda is as follows:
I. Call to Order
II. Roll Call
III. New Business
a. Board Communication with NRRIT
b. OEO Reporting Structure
IV. Adjournment
The person to contact for more
information is Sylvia Zaragoza, Acting
Secretary to the Board, Phone No. 312–
751–4939.
Dated: February 22, 2019.
For The Board.
Sylvia Zaragoza,
Acting Secretary to the Board.
[FR Doc. 2019–03470 Filed 2–25–19; 11:15 am]
BILLING CODE 7905–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85169; File No. SR–CBOE–
2019–012]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating To Amend its
Fees Schedule
February 21, 2019.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on February
11, 2019, Cboe Exchange, Inc. (the
‘‘Exchange’’ or ‘‘Cboe Options’’) 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
Cboe Exchange, Inc. (the ‘‘Exchange’’
or ‘‘Cboe Options’’) proposes to amend
its fees schedule. The text of the
proposed rule change is provided in
Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://www.cboe.com/
AboutCBOE/CBOELegalRegulatory
Home.aspx), at the Exchange’s Office of
the Secretary, and at the Commission’s
Public Reference Room.
1 15
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 84, No. 39 / Wednesday, February 27, 2019 / Notices
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
Tier
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 make a
number of changes to its Fees Schedule,
effective February 1, 2019.3
Volume Incentive Program
The Exchange first proposes to amend
the Volume Incentive Program (‘‘VIP’’).
By way of background, under VIP, the
Exchange credits each Trading Permit
Holder (‘‘TPH’’) the per contract amount
set forth in the VIP table for Public
Customer orders (‘‘C’’ origin code)
transmitted by that TPH (with certain
exceptions) which is executed
electronically on the Exchange,
provided the TPH meets certain volume
thresholds in a month.4 The Exchange
proposes to amend the volume
thresholds for Tiers 4 and 5. The
proposed change is as follows:
Percentage Thresholds of National Customer Volume in All Underlying Symbols Excluding Underlying Symbol List A, Sector Indexes, DJX, MXEA, MXEF, MNX, NDX, XSP and XSPAM
(Monthly)
Current
1
2
3
4
5
...............
...............
...............
...............
...............
0.00%–0.75% ................................................................................
Above 0.75% to 2.00% .................................................................
Above 2.00% to 3.00% .................................................................
Above 3.00% to 4.00% .................................................................
Above 4.00% .................................................................................
The purpose of these changes is to
adjust for current volume trends while
maintaining an incremental incentive
for TPHs to strive for the highest tier
level.
RUT Transaction Fee
The Exchange next proposes to
increase the transaction fee for MarketMaker orders in RUT options. Currently,
the Exchange charges $0.20 per contract
for Market-Makers’ RUT orders. The
Exchange proposes to increase the
transaction rate to $0.30 per contract.
The Exchange notes the proposed rate
change is less than the amount assessed
for similar transactions on another
Exchange and is also similar to MarketMaker fees assessed for other
proprietary products.5
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ETF and ETN Options Transaction Fee
The Exchange proposes to amend the
fees for electronic Customer orders
(origin code ‘‘C’’) for ETF and ETN
options. Currently the Exchange waives
transaction fees for (1) all customer
orders executed in open outcry or AIM,
and (2) customer electronic executions
of 249 contracts or less in ETF and ETN
options in Penny and Non-Penny
classes. The Exchange proposes to
amend the transaction fee for Customer
electronic executions in ETF and ETN
options such that it will waive the
3 The Exchange initially filed the proposed fee
changes on February 1, 2019 (SR–CBOE–2019–009).
On business date February 4, 2019, the Exchange
withdrew that filing and submitted SR–CBOE–
2019–010. On business date February 11, 2019, the
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No change.
No change.
No change.
Above 3.00% to 3.75%.
Above 3.75%.
transaction fees for all Customer
electronic executions that add liquidity
(i.e., ‘‘Maker’’ transactions). The
Exchange will charge $0.18 per contract
on all Customer electronic executions if
the original order size is 100 contracts
or greater and if it removes liquidity
(i.e., ‘‘Taker’’ transactions) in ETF and
ETN options.
The Exchange also proposes to amend
Footnote 9 to make corresponding
changes to the footnote text regarding
the proposed change described above
and also explicitly make clear what
transactions the Exchange would
consider to be Maker (and therefore
have no fees assessed) and Taker (and
therefore be assessed $0.18 per contract,
if equal to or greater than 100 contracts).
Particularly, the Exchange proposes to
provide that the Taker fee applies to
electronic volume only, but is not
applied to the following: (i) Trades on
the open and (ii) QCC orders. The Taker
fees would apply to the following
volume: (i) Volume resulting from a
Customer’s orders and/or quotes
removing other market participants’
resting orders and/or quotes and (ii)
volume resulting from a Customer’s
primary orders in (i) unpaired auctions
(i.e., Hybrid Agency Liaison (‘‘HAL’’)
and HAL on the Open (‘‘HALO’’)) and
(ii) Complex Order Auction (COA)). The
Maker fee waiver would apply to the
Exchange withdrew that filing and submitted this
filing.
4 See Cboe Options Fees Schedule, Volume
Incentive Program.
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following volume: (i) Volume resulting
from executions against a Customer’s
resting orders and/or quotes and (ii)
volume resulting from a Customer’s
responses to auctions (i.e., HAL, HALO
and COA responses). The Exchange
notes it similarly has clarified what
volume is considered Taker versus
Maker in Footnote 44 of the Fees
Schedule which relates to the Liquidity
Provider Sliding Scale Adjustment
Table.6
SPXW Priority Surcharge
The Exchange proposes to amend the
Customer Priority Surcharge for SPXW
(‘‘SPXW Surcharge’’). Currently, the
Exchange assesses a SPXW Surcharge of
$0.10 per contract for Customer orders
in SPXW that are executed
electronically (with some exceptions).7
The Exchange proposes to extend the
SPXW Surcharge to all market
participants other than Market-Makers,
which aligns its applicability to the
same market participants as the SPX
Hybrid Execution Surcharge.
In connection with the proposed
change, and in order to make the Fees
Schedule easier to read, the Exchange
proposes to relocate the SPXW
Surcharge to its own line item grouped
together with the SPX Hybrid Execution
Surcharge and rename the SPX Hybrid
Execution Surcharge, such that both
5 See Cboe BZX Fees Schedule. See also Cboe
Options Fees Schedule, SPX Liquidity Provider
Sliding Scale.
6 See Cboe Options Fees Schedule, Footnote 44.
7 See Cboe Options Fees Schedule, Footnote 31.
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surcharges will be grouped together as
the ‘‘Execution Surcharge’’ (one for SPX
and one for SPXW). The Exchange also
proposes to (i) update Footnote 31 of the
Fees Schedule, which is currently
appended to the SPXW Surcharge, to
eliminate references to the SPXW
Customer Priority Surcharge and (ii) in
its place, append Footnote 21 to the
SPXW surcharge (and add references to
‘‘SPXW Execution Surcharge’’ in
Footnote 21). The Exchange also
proposes to amend Footnote 21 to
eliminate the second and third
surcharge exemptions listed relating to
Market-Maker transactions. Particularly,
Footnote 21 provides, among other
things, that the SPX Execution
Surcharge will not apply to (i)
executions by Market-Makers against
orders in the complex order auction
(COA) and Simple Auction Liaison
(SAL) systems in their appointed classes
and (ii) executions by Market-Makers
against orders in the electronic book,
Hybrid Agency Liaison (HAL) and the
complex order book in their appointed
classes. The Exchange notes that since
neither the SPX Execution Surcharge
nor SPXW Execution Surcharge, even as
amended, apply to Market-Maker
orders, this language is moot and
obsolete. The Exchange therefore
proposes to eliminate it from the Fees
Schedule to avoid confusion. The
Exchange notes that the remaining two
exemptions set forth under Footnote 21
of the Fees Schedule currently apply to
both the SPX and SPXW Execution
Surcharges.
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Supplemental VIX Total Firm Discount
The Exchange next proposes to
eliminate its Supplemental VIX Total
Firm Volume Discount (‘‘Supplemental
VIX Discount’’). The Supplemental VIX
Discount allows VIX options transaction
fees for Clearing TPHs’ (including its
Non-TPH Affiliates) proprietary orders
to be discounted provided a Clearing
TPH reaches certain VIX firm volume
percentage thresholds during a calendar
month. The Exchange no longer wishes
to offer the Supplement VIX Discount
program and therefore proposes to
eliminate it from its Fees Schedule.
Trading Permits Sliding Scale Program
The Exchange proposes to amend its
Market Maker and Floor Broker Trading
Permit Sliding Scale Programs (‘‘TP
Sliding Scales’’). The TP Sliding Scales
allow Market Makers and Floor Brokers
to pay reduced rates for their Trading
Permits if they commit in advance to a
specific tier that includes a minimum
number of eligible Market Maker and
Floor Broker Trading Permits,
respectively, for each calendar year. The
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Exchange notes that in October 2019, it
is migrating the current Cboe Options
trading platform onto new technology
and in connection with such migration,
is anticipating a new Trading Permit
structure. As such, the Exchange
proposes to provide that any
commitment to Trading Permits under
the TP Sliding Scales shall be in place
through September 2019, instead of the
calendar year, and proposes to update
Footnotes 24 and 25 accordingly.
believes the waiver encourages Firms to
do so and as such, proposes to renew
the waiver of the surcharge through June
30, 2019, at which time the Exchange
will again reevaluate whether the
waiver has continued to prompt Firms
to close and roll over these positions.
Accordingly, the Exchange proposes to
delete the reference to the current
waiver period of December 31, 2018
from the Fees Schedule and replace it
with June 30, 2019.
Facility Fees
The Exchange next proposes to amend
certain facility fees. First, the Exchange
proposes to increase fees for access
badges. Currently, the Exchange charges
$120 per Floor Manager Badge and $60
per Clerk Badge. The Exchange proposes
to increase the Floor Manager Badge to
$130 per badge and the Clerk Badge to
$70 per badge. The Exchange notes
these fees have not been raised in
several years. The Exchange also
proposes to eliminate the following
Badge-related fees which are assessed
per occurrence: Badge Issuance,
Replacement Badge, Unreturned
Security Access Badge, Temporary
Badge—Non Trading Permit Holder,
Temporary Badge—Trading Permit
Holder, and Unreturned Temporary
Badge.
The Exchange is also proposing to
eliminate the fees relating to coat room
services, as such service will be
eliminated as of February 1, 2019.
Particularly, the $25 per month for Coat
Room Checking and $15 per Occurrence
for Lost or Damaged Trading Jackets fees
will be eliminated.
Global Trading Hour Fees
VIX and Sector License Index Surcharge
The Exchange proposes to extend the
current waiver of the VIX and Sector
Index License Surcharge of $0.10 per
contract for Clearing Trading Permit
Holder Proprietary (‘‘Firm’’) (origin
codes ‘‘F’’ or ‘‘L’’) VIX and Sector Index
orders that have a premium of $0.10 or
lower and have series with an
expiration of seven (7) calendar days or
less. The Exchange adopted the current
waiver to reduce transaction costs on
expiring, low-priced VIX options as well
as Sector Index options, which the
Exchange believed would encourage
Firms to seek to close and/or roll over
such positions, including facilitating
customers to do so, in order to free up
capital and encourage additional
trading. The Exchange had proposed to
waive the surcharge through December
31, 2018, at which time the Exchange
had stated that it would evaluate
whether the waiver has in fact prompted
Firms to close and roll over these
positions as intended. The Exchange
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In order to promote and encourage
trading during the Global Trading Hours
(‘‘GTH’’) session, the Exchange
previously waived GTH Trading Permit
and Bandwidth Packet fees for one (1)
of each initial Trading Permits and one
(1) of each initial Bandwidth Packet, per
affiliated TPH. The Exchange notes that
waiver expired December 31, 2018. The
Exchange also waived fees through
December 31, 2018 for a CMI and FIX
login ID if the CMI and/or FIX login ID
is related to a waived GTH Trading
Permit and/or waived Bandwidth
packet. In order to continue to promote
trading during GTH, the Exchange
wishes to renew these waivers through
June 30, 2019.
RLG, RLV, RUI, AWDE, FTEM, FXTM
and UKXM Transaction Fees
In order to promote and encourage
trading of seven FTSE Russell Index
products (i.e., Russell 1000 Growth
Index (‘‘RLG’’), Russell 1000 Value
Index (‘‘RLV’’), Russell 1000 Index
(‘‘RUI’’), FTSE Developed Europe Index
(‘‘AWDE’’), FTSE Emerging Markets
Index (‘‘FTEM’’), China 50 Index
‘‘(FXTM’’) and FTSE 100 Index
(‘‘UKXM’’)), the Exchange had waived
all transaction fees (including the Floor
Brokerage Fee, Index License Surcharge
and CFLEX Surcharge Fee) for each of
these products. This waiver expired
December 31, 2018. To continue
promoting the trading of these options
classes, the Exchange proposes to renew
the fee waiver through June 30, 2019.
UKXM DPM Payment
The Exchange previously offered a
compensation plan to the Designated
Primary Market-Maker(s) (‘‘DPM(s)’’)
appointed in UKXM to offset its DPM
costs. Specifically, the Fees Schedule
provides that DPM(s) appointed for an
entire month in UKXM will receive a
payment of $5,000 per month, through
December 31, 2018. The Exchange
proposes to renew the compensation
plan through June 30, 2019 to continue
to incentivize the DPM(s) to continue to
serve as a DPM in this product.
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Footnote 42 References
The Exchange lastly proposes to
delete all appended references to
Footnote 42. The Exchange notes that
effective, July 2, 2018, the Exchange
eliminated the FLEX Asian & Cliquet
FLEX Trader Incentive Program, which
program was described in Footnote 42
of the Fees Schedule.8 Although, the
program was eliminated (along with the
contents of Footnote 42), the Exchange
inadvertently omitted to delete
appended references to Footnote 42 in
the Fees Schedule. The Exchange
proposes to correct that oversight and
delete such references, which will 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.9 Specifically,
the Exchange believes the proposed rule
change is consistent with the Section
6(b)(5) 10 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,11 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.
First, the Exchange believes adjusting
the VIP volume thresholds for Tiers 4
and 5 is reasonable because it adjusts for
the current volume trends and makes it
slightly easier for TPHs to meet the
qualifying criteria to achieve the highest
tier, Tier 5. The Exchange also notes
that the credits offered under VIP are
not changing. Rather, the rebalance of
tiers still allows the Exchange to
maintain an incremental incentive for
TPHs to strive for the highest tier level,
8 See Securities Exchange Act Release No. 83587
(July 3, 2018), 83 FR 31810 (July 9, 2018) (SR–
CBOE–2018–051).
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
11 15 U.S.C. 78f(b)(4).
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which provides increasingly higher
credits. The Exchange believes it is
equitable and not unfairly
discriminatory because the proposed
changes to the qualifying volume
thresholds apply to all TPHs uniformly.
The Exchange believes increasing the
fee for Market-Maker executions in RUT
is reasonable because the proposed rate
change is less than the amount assessed
for similar transactions on another
Exchange and is also similar to MarketMaker fees assessed for other
proprietary products.12 The Exchange
believes that this proposed change is
also equitable and not unfairly
discriminatory because the proposed
changes will apply equally to all
Market-Makers uniformly.
The Exchange believes the proposed
rule change to waive fees for Customer
electronic executions in ETF and ETN
options that add liquidity, but assess
$0.18 per contract for such executions
that remove liquidity and are of an order
size of 100 contracts or greater, is
reasonable because Customers will pay
nothing for these executions where they
add liquidity and will be paying the
same rate as is currently provided for
under the fees schedule (i.e., $0.18 per
contract) when they remove liquidity.
The Exchange believes the proposed
rule change is equitable and not unfairly
discriminatory because the proposed
rule change applies to all Customers
equally. Additionally, the proposed rule
change is designed to encourage posted
liquidity to the Exchange. Particularly,
the Exchange believes it’s equitable and
not unfairly discriminatory to assess
this fee for orders that remove liquidity
and not orders that add liquidity
because the Exchange wants to
encourage market participation and
price improvement. The Exchange
believes the proposed updates to
Footnote 9 provide clarity in the Fees
Schedule and alleviates potential
confusion as to what volume would be
considered ‘‘Taker’’ vs ‘‘Maker’’ for
purposes of this fee. The alleviation of
confusion removes impediments to and
perfects the mechanism of a free and
open market and a national market
system, and, in general, protects
investors and the public interest.
The Exchange believes extending the
applicability of the SPXW Execution
Surcharge to all market participants
other than Market-Makers is reasonable
as it aligns the applicability of the
surcharge to the same market
participants subject to the SPX Hybrid
Execution Surcharge and because the
12 See Cboe BZX Fees Schedule. See also Cboe
Options Fees Schedule, SPX Liquidity Provider
Sliding Scale.
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surcharge amount is not changing. The
Exchange believes it’s equitable and not
unfairly discriminatory to apply the
SPXW Execution Surcharge to all
market participants other than MarketMakers because Market-Makers, unlike
other market participants, take on a
number of obligations, including
quoting obligations, that other market
participants do not have. The Exchange
believes the proposed updates to
Footnotes 21 and 31 in connection with
the proposed SPXW Execution
Surcharge change provides clarity in the
Fees Schedule and alleviates potential
confusion, thereby removing
impediments to and perfecting the
mechanism of a free and open market
and a national market system, and, in
general, protecting investors and the
public interest.
The Exchange believes it’s reasonable
to eliminate the Supplemental VIX
Discount because it is not required to
provide such a discount. Additionally,
the Exchange notes that Clearing TPHs
have other opportunities to obtain a
discount on VIX executions, such as via
the Cboe Proprietary Product Sliding
Scale programs. The Exchange believes
it’s equitable and not unfairly
discriminatory because it applies
uniformly to all Clearing TPHs.
The Exchange believes amending the
TP Sliding Scales to provide that any
commitment to Trading Permits under
the TP Sliding Scales shall be in place
through September 2019, instead of the
calendar year, is reasonable because the
discounted Trading Permit rates and tier
levels are not changing. The Exchange
believes this proposed rule change is
reasonable, equitable and not unfairly
discriminatory because, as discussed
above, the Exchange anticipates
modifying the current Trading Permit
structure upon the migration of its
trading system in October 2019. The
Exchange notes that through September
2019, Floor Brokers and Market-Makers
are still eligible to take advantage of
these sliding scale programs, which
offer discounts on Trading Permits.
Additionally, the proposed rule change
applies to all Markets-Makers and Floor
Brokers uniformly.
The Exchange believes the proposed
rule change to eliminate per occurrence
badge issuance fees and coat room
services fees are reasonable as TPHs will
no longer be subject to these fees.
Additionally, with respect to the coat
room service fees, the Exchange notes
such services will be eliminated as of
February 1, 2019. Additionally, the
proposed elimination applies to all
TPHs. The Exchange believes the
proposed increases to the Floor Manager
and Clerk Badge fees are reasonable
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because they are a moderate increase,
these fees have not been increased in
several years, and other badge-related
fees are being eliminated. Additionally
the proposed fee increases applies to all
TPHs who need to avail themselves of
these badges.
The Exchange believes it’s
appropriate to continue to waive the
VIX and Sector Index License Surcharge
for Clearing Trading Permit Holder
Proprietary Sector Index and VIX orders
that have a premium of $0.10 or lower
and have series with an expiration of 7
calendar days or less because the
Exchange wants to continue
encouraging Firms to roll and close over
these positions. Particularly, the
Exchange believes it’s reasonable to
waive the entire $0.10 per contract
surcharge because without the waiver of
the surcharge, firms are less likely to
engage in these transactions, as opposed
to other VIX and Sector Index
transactions, due to the associated
transaction costs. The Exchange believes
it’s equitable and not unfairly
discriminatory to limit the waiver to
Clearing Trading Permit Holder
Proprietary orders because they
contribute capital to facilitate the
execution of Sector Index customer
orders and VIX customer orders with a
premium of $0.10 or lower and series
with an expiration of 7 calendar days or
less. Finally, the Exchange believes it’s
reasonable, equitable and not unfairly
discriminatory to provide that the
surcharge will be waived through June
30, 2019, as it gives the Exchange
additional time to evaluate if the waiver
is continuing to have the desired effect
of encouraging these transactions.
The Exchange believes renewing the
waiver of GTH Trading Permit and
Bandwidth Packet fees for one of each
type of Trading Permit and Bandwidth
Packet, per affiliated TPH through June
30, 2019 is reasonable, equitable and not
unfairly discriminatory, because those
respective fees would be waived in their
entirety, which promotes and
encourages trading during the GTH
session and applies to all GTH TPHs.
The Exchange believes it’s also
reasonable, equitable and not unfairly
discriminatory to waive fees for Login
IDs related to waived Trading Permits
and/or Bandwidth Packets in order to
promote and encourage ongoing
participation in GTH and also applies to
all GTH TPHs.
The Exchange believes it is
reasonable, equitable and not unfairly
discriminatory to renew the waiver of
all transaction fees for RLG, RLV, RUI,
AWDE, FTEM, FXTM and UKXM
transactions, including the Floor
Brokerage fee, the License Index
VerDate Sep<11>2014
17:07 Feb 26, 2019
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Surcharge and CFLEX Surcharge Fee,
because the respective fees are being
waived in their entirety, which
promotes and encourages trading of
these products which are still relatively
new and applies to all TPHs.
The Exchange believes that it is
reasonable, equitable and not unfairly
discriminatory to renew the
compensation plan to the DPM
appointed in UKXM to continue to
offset its ongoing DPM costs and
continue to incentivize the DPM to
continue to serve as a DPM in this
product.
Lastly, the Exchange believes
eliminating references to Footnote 42
(which footnote does not currently
contain any language and is obsolete)
alleviates potential confusion. The
alleviation of confusion removes
impediments to and perfects the
mechanism of a free and open market
and a national market system, and, in
general, protects investors and the
public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule changes will impose
any burden on competition that are not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange does not believe that the
proposed rule change will impose any
burden on intramarket competition that
is not necessary or appropriate in
furtherance of the purposes of the Act
because, while different fees and rebates
are assessed to different market
participants in some circumstances,
these different market participants have
different obligations and different
circumstances. For example, Clearing
TPHs have clearing obligations that
other market participants do not have.
Market-Makers have quoting obligations
that other market participants do not
have. There is also a history in the
options markets of providing
preferential treatment to customers, as
they often do not have as sophisticated
trading operations and systems as other
market participants, which often makes
other market participants prefer to trade
with customers. Further, the Exchange
fees and rebates, both current and those
proposed to be changed, are intended to
encourage market participants to bring
increased volume to the Exchange
(which benefits all market participants),
while still covering Exchange costs
(including those associated with the
upgrading and maintenance of Exchange
systems).
The Exchange does not believe that
the proposed rule changes will impose
any burden on intermarket competition
PO 00000
Frm 00096
Fmt 4703
Sfmt 4703
6449
that is not necessary or appropriate in
furtherance of the purposes of the Act
because the proposed changes are
intended to promote competition and
better improve the Exchange’s
competitive position and make Cboe
Options a more attractive marketplace
in order to encourage market
participants to bring increased volume
to the Exchange (while still covering
costs as necessary). Further, the
proposed changes only affect trading on
the Exchange. To the extent that the
proposed changes make Cboe Options a
more attractive marketplace for market
participants at other exchanges, such
market participants are welcome to
become Cboe Options 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 13 and paragraph (f) of Rule
19b–4 14 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–2019–012 on the subject line.
13 15
14 17
E:\FR\FM\27FEN1.SGM
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CFR 240.19b–4(f).
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Federal Register / Vol. 84, No. 39 / Wednesday, February 27, 2019 / Notices
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–2019–012. 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 website (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 website 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.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–CBOE–2019–012 and
should be submitted on or before March
20, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–03332 Filed 2–26–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
amozie on DSK3GDR082PROD with NOTICES1
[SEC File No. 270–658 OMB Control No.
3235–0716]
Proposed Collection; Comment
Request
Upon Written Request Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
15 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
17:07 Feb 26, 2019
Jkt 247001
100 F Street NE, Washington, DC
20549–2736.
Extension:
Form C
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the collection of information
summarized below. The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget for extension
and approval.
Form C (17 CFR 239.900) is used by
issuers offering securities in reliance on
the crowdfunding exemption in Section
4(a)(6) (15 U.S.C. 77d(a)(6)) of the
Securities Act of 1933 (‘‘Securities Act’’)
(15 U.S.C. 77a et seq.) Form C will also
be used by issuers that have completed
transactions in reliance on Section
4(a)(6) to file annual reports or to
provide notice of the termination of
reporting obligations.. The information
collected is intended to create a
framework for the filing and disclosure
requirements of Title III Section 4A of
the Jumpstart Our Business Startups Act
(Pub. L. 112–106, 126 Stat. 306) to
implement the exemption from
Securities Act registration for offerings
made in reliance on Section 4(a)(6).
Form C takes approximately 48.96969
hours per response and is filed by
approximately 5,852 respondents. We
estimate that 75% of the 48.96969 hours
per response (36.72727 hours) is
prepared by the issuer for a total annual
reporting burden of 214,928 hours
(36.72727 hours per response × 5,852
responses).
Written comments are invited on: (a)
Whether this proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information will have practical utility;
(b) the accuracy of the agency’s estimate
of the burden imposed by the collection
of information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology. Consideration will be given
to comments and suggestions submitted
in writing within 60 days of this
publication.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid
control number.
PO 00000
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Please direct your written comment to
Charles Riddle, Acting Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Candace
Kenner, 100 F Street NE, Washington,
DC 20549 or send an email to: PRA_
Mailbox@sec.gov.
Dated: February 22, 2019.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–03394 Filed 2–26–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–440, OMB Control No.
3235–0496]
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736.
Extension:
Appendix F to Rule 15c3–1
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.) (‘‘PRA’’), the
Securities and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the existing collection of information
provided for in appendix F to Rule
15c3–1 (‘‘Appendix F’’ or ‘‘Rule 15c3–
1f’’) (17 CFR 240.15c3–1f) under the
Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.). The Commission
plans to submit this existing collection
of information to the Office of
Management and Budget (‘‘OMB’’) for
extension and approval.
Under appendix F, a class of brokerdealers known as over-the counter
(‘‘OTC’’) derivatives dealers may apply
to the Commission for authorization to
compute net capital charges for market
and credit risk in accordance with
appendix F in lieu of computing
securities haircuts under paragraph
(c)(2)(vi) of Exchange Act Rule 15c3–1.
At present, three OTC derivatives
dealers have been approved to use
appendix F. Two OTC derivatives
dealers have applied to use appendix F,
and the staff expects that one additional
OTC derivatives dealer will apply to use
appendix F during the next three years.
The Commission estimates that the
three approved OTC derivatives dealers
and two OTC derivatives dealers with
pending applications (if approved) will
spend an average of approximately
1,000 hours each per year reporting
information concerning their VAR
models and internal risk management
E:\FR\FM\27FEN1.SGM
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]]>Agencies
[Federal Register Volume 84, Number 39 (Wednesday, February 27, 2019)]
[Notices]
[Pages 6445-6450]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-03332]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85169; File No. SR-CBOE-2019-012]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
To Amend its Fees Schedule
February 21, 2019.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on February 11, 2019, Cboe Exchange, Inc. (the ``Exchange'' or
``Cboe Options'') 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
Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to amend its fees schedule. The text of the proposed rule change is
provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's website (https://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.
[[Page 6446]]
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 make a number of changes to its Fees
Schedule, effective February 1, 2019.\3\
---------------------------------------------------------------------------
\3\ The Exchange initially filed the proposed fee changes on
February 1, 2019 (SR-CBOE-2019-009). On business date February 4,
2019, the Exchange withdrew that filing and submitted SR-CBOE-2019-
010. On business date February 11, 2019, the Exchange withdrew that
filing and submitted this filing.
---------------------------------------------------------------------------
Volume Incentive Program
The Exchange first proposes to amend the Volume Incentive Program
(``VIP''). By way of background, under VIP, the Exchange credits each
Trading Permit Holder (``TPH'') the per contract amount set forth in
the VIP table for Public Customer orders (``C'' origin code)
transmitted by that TPH (with certain exceptions) which is executed
electronically on the Exchange, provided the TPH meets certain volume
thresholds in a month.\4\ The Exchange proposes to amend the volume
thresholds for Tiers 4 and 5. The proposed change is as follows:
---------------------------------------------------------------------------
\4\ See Cboe Options Fees Schedule, Volume Incentive Program.
------------------------------------------------------------------------
Percentage Thresholds of National
Customer Volume in All Underlying
Symbols Excluding Underlying Symbol
List A, Sector Indexes, DJX, MXEA,
Tier MXEF, MNX, NDX, XSP and XSPAM
(Monthly)
---------------------------------------
Current Proposed
------------------------------------------------------------------------
1............................... 0.00%-0.75%....... No change.
2............................... Above 0.75% to No change.
2.00%.
3............................... Above 2.00% to No change.
3.00%.
4............................... Above 3.00% to Above 3.00% to
4.00%. 3.75%.
5............................... Above 4.00%....... Above 3.75%.
------------------------------------------------------------------------
The purpose of these changes is to adjust for current volume trends
while maintaining an incremental incentive for TPHs to strive for the
highest tier level.
RUT Transaction Fee
The Exchange next proposes to increase the transaction fee for
Market-Maker orders in RUT options. Currently, the Exchange charges
$0.20 per contract for Market-Makers' RUT orders. The Exchange proposes
to increase the transaction rate to $0.30 per contract. The Exchange
notes the proposed rate change is less than the amount assessed for
similar transactions on another Exchange and is also similar to Market-
Maker fees assessed for other proprietary products.\5\
---------------------------------------------------------------------------
\5\ See Cboe BZX Fees Schedule. See also Cboe Options Fees
Schedule, SPX Liquidity Provider Sliding Scale.
---------------------------------------------------------------------------
ETF and ETN Options Transaction Fee
The Exchange proposes to amend the fees for electronic Customer
orders (origin code ``C'') for ETF and ETN options. Currently the
Exchange waives transaction fees for (1) all customer orders executed
in open outcry or AIM, and (2) customer electronic executions of 249
contracts or less in ETF and ETN options in Penny and Non-Penny
classes. The Exchange proposes to amend the transaction fee for
Customer electronic executions in ETF and ETN options such that it will
waive the transaction fees for all Customer electronic executions that
add liquidity (i.e., ``Maker'' transactions). The Exchange will charge
$0.18 per contract on all Customer electronic executions if the
original order size is 100 contracts or greater and if it removes
liquidity (i.e., ``Taker'' transactions) in ETF and ETN options.
The Exchange also proposes to amend Footnote 9 to make
corresponding changes to the footnote text regarding the proposed
change described above and also explicitly make clear what transactions
the Exchange would consider to be Maker (and therefore have no fees
assessed) and Taker (and therefore be assessed $0.18 per contract, if
equal to or greater than 100 contracts). Particularly, the Exchange
proposes to provide that the Taker fee applies to electronic volume
only, but is not applied to the following: (i) Trades on the open and
(ii) QCC orders. The Taker fees would apply to the following volume:
(i) Volume resulting from a Customer's orders and/or quotes removing
other market participants' resting orders and/or quotes and (ii) volume
resulting from a Customer's primary orders in (i) unpaired auctions
(i.e., Hybrid Agency Liaison (``HAL'') and HAL on the Open (``HALO''))
and (ii) Complex Order Auction (COA)). The Maker fee waiver would apply
to the following volume: (i) Volume resulting from executions against a
Customer's resting orders and/or quotes and (ii) volume resulting from
a Customer's responses to auctions (i.e., HAL, HALO and COA responses).
The Exchange notes it similarly has clarified what volume is considered
Taker versus Maker in Footnote 44 of the Fees Schedule which relates to
the Liquidity Provider Sliding Scale Adjustment Table.\6\
---------------------------------------------------------------------------
\6\ See Cboe Options Fees Schedule, Footnote 44.
---------------------------------------------------------------------------
SPXW Priority Surcharge
The Exchange proposes to amend the Customer Priority Surcharge for
SPXW (``SPXW Surcharge''). Currently, the Exchange assesses a SPXW
Surcharge of $0.10 per contract for Customer orders in SPXW that are
executed electronically (with some exceptions).\7\ The Exchange
proposes to extend the SPXW Surcharge to all market participants other
than Market-Makers, which aligns its applicability to the same market
participants as the SPX Hybrid Execution Surcharge.
---------------------------------------------------------------------------
\7\ See Cboe Options Fees Schedule, Footnote 31.
---------------------------------------------------------------------------
In connection with the proposed change, and in order to make the
Fees Schedule easier to read, the Exchange proposes to relocate the
SPXW Surcharge to its own line item grouped together with the SPX
Hybrid Execution Surcharge and rename the SPX Hybrid Execution
Surcharge, such that both
[[Page 6447]]
surcharges will be grouped together as the ``Execution Surcharge'' (one
for SPX and one for SPXW). The Exchange also proposes to (i) update
Footnote 31 of the Fees Schedule, which is currently appended to the
SPXW Surcharge, to eliminate references to the SPXW Customer Priority
Surcharge and (ii) in its place, append Footnote 21 to the SPXW
surcharge (and add references to ``SPXW Execution Surcharge'' in
Footnote 21). The Exchange also proposes to amend Footnote 21 to
eliminate the second and third surcharge exemptions listed relating to
Market-Maker transactions. Particularly, Footnote 21 provides, among
other things, that the SPX Execution Surcharge will not apply to (i)
executions by Market-Makers against orders in the complex order auction
(COA) and Simple Auction Liaison (SAL) systems in their appointed
classes and (ii) executions by Market-Makers against orders in the
electronic book, Hybrid Agency Liaison (HAL) and the complex order book
in their appointed classes. The Exchange notes that since neither the
SPX Execution Surcharge nor SPXW Execution Surcharge, even as amended,
apply to Market-Maker orders, this language is moot and obsolete. The
Exchange therefore proposes to eliminate it from the Fees Schedule to
avoid confusion. The Exchange notes that the remaining two exemptions
set forth under Footnote 21 of the Fees Schedule currently apply to
both the SPX and SPXW Execution Surcharges.
Supplemental VIX Total Firm Discount
The Exchange next proposes to eliminate its Supplemental VIX Total
Firm Volume Discount (``Supplemental VIX Discount''). The Supplemental
VIX Discount allows VIX options transaction fees for Clearing TPHs'
(including its Non-TPH Affiliates) proprietary orders to be discounted
provided a Clearing TPH reaches certain VIX firm volume percentage
thresholds during a calendar month. The Exchange no longer wishes to
offer the Supplement VIX Discount program and therefore proposes to
eliminate it from its Fees Schedule.
Trading Permits Sliding Scale Program
The Exchange proposes to amend its Market Maker and Floor Broker
Trading Permit Sliding Scale Programs (``TP Sliding Scales''). The TP
Sliding Scales allow Market Makers and Floor Brokers to pay reduced
rates for their Trading Permits if they commit in advance to a specific
tier that includes a minimum number of eligible Market Maker and Floor
Broker Trading Permits, respectively, for each calendar year. The
Exchange notes that in October 2019, it is migrating the current Cboe
Options trading platform onto new technology and in connection with
such migration, is anticipating a new Trading Permit structure. As
such, the Exchange proposes to provide that any commitment to Trading
Permits under the TP Sliding Scales shall be in place through September
2019, instead of the calendar year, and proposes to update Footnotes 24
and 25 accordingly.
Facility Fees
The Exchange next proposes to amend certain facility fees. First,
the Exchange proposes to increase fees for access badges. Currently,
the Exchange charges $120 per Floor Manager Badge and $60 per Clerk
Badge. The Exchange proposes to increase the Floor Manager Badge to
$130 per badge and the Clerk Badge to $70 per badge. The Exchange notes
these fees have not been raised in several years. The Exchange also
proposes to eliminate the following Badge-related fees which are
assessed per occurrence: Badge Issuance, Replacement Badge, Unreturned
Security Access Badge, Temporary Badge--Non Trading Permit Holder,
Temporary Badge--Trading Permit Holder, and Unreturned Temporary Badge.
The Exchange is also proposing to eliminate the fees relating to
coat room services, as such service will be eliminated as of February
1, 2019. Particularly, the $25 per month for Coat Room Checking and $15
per Occurrence for Lost or Damaged Trading Jackets fees will be
eliminated.
VIX and Sector License Index Surcharge
The Exchange proposes to extend the current waiver of the VIX and
Sector Index License Surcharge of $0.10 per contract for Clearing
Trading Permit Holder Proprietary (``Firm'') (origin codes ``F'' or
``L'') VIX and Sector Index orders that have a premium of $0.10 or
lower and have series with an expiration of seven (7) calendar days or
less. The Exchange adopted the current waiver to reduce transaction
costs on expiring, low-priced VIX options as well as Sector Index
options, which the Exchange believed would encourage Firms to seek to
close and/or roll over such positions, including facilitating customers
to do so, in order to free up capital and encourage additional trading.
The Exchange had proposed to waive the surcharge through December 31,
2018, at which time the Exchange had stated that it would evaluate
whether the waiver has in fact prompted Firms to close and roll over
these positions as intended. The Exchange believes the waiver
encourages Firms to do so and as such, proposes to renew the waiver of
the surcharge through June 30, 2019, at which time the Exchange will
again reevaluate whether the waiver has continued to prompt Firms to
close and roll over these positions. Accordingly, the Exchange proposes
to delete the reference to the current waiver period of December 31,
2018 from the Fees Schedule and replace it with June 30, 2019.
Global Trading Hour Fees
In order to promote and encourage trading during the Global Trading
Hours (``GTH'') session, the Exchange previously waived GTH Trading
Permit and Bandwidth Packet fees for one (1) of each initial Trading
Permits and one (1) of each initial Bandwidth Packet, per affiliated
TPH. The Exchange notes that waiver expired December 31, 2018. The
Exchange also waived fees through December 31, 2018 for a CMI and FIX
login ID if the CMI and/or FIX login ID is related to a waived GTH
Trading Permit and/or waived Bandwidth packet. In order to continue to
promote trading during GTH, the Exchange wishes to renew these waivers
through June 30, 2019.
RLG, RLV, RUI, AWDE, FTEM, FXTM and UKXM Transaction Fees
In order to promote and encourage trading of seven FTSE Russell
Index products (i.e., Russell 1000 Growth Index (``RLG''), Russell 1000
Value Index (``RLV''), Russell 1000 Index (``RUI''), FTSE Developed
Europe Index (``AWDE''), FTSE Emerging Markets Index (``FTEM''), China
50 Index ``(FXTM'') and FTSE 100 Index (``UKXM'')), the Exchange had
waived all transaction fees (including the Floor Brokerage Fee, Index
License Surcharge and CFLEX Surcharge Fee) for each of these products.
This waiver expired December 31, 2018. To continue promoting the
trading of these options classes, the Exchange proposes to renew the
fee waiver through June 30, 2019.
UKXM DPM Payment
The Exchange previously offered a compensation plan to the
Designated Primary Market-Maker(s) (``DPM(s)'') appointed in UKXM to
offset its DPM costs. Specifically, the Fees Schedule provides that
DPM(s) appointed for an entire month in UKXM will receive a payment of
$5,000 per month, through December 31, 2018. The Exchange proposes to
renew the compensation plan through June 30, 2019 to continue to
incentivize the DPM(s) to continue to serve as a DPM in this product.
[[Page 6448]]
Footnote 42 References
The Exchange lastly proposes to delete all appended references to
Footnote 42. The Exchange notes that effective, July 2, 2018, the
Exchange eliminated the FLEX Asian & Cliquet FLEX Trader Incentive
Program, which program was described in Footnote 42 of the Fees
Schedule.\8\ Although, the program was eliminated (along with the
contents of Footnote 42), the Exchange inadvertently omitted to delete
appended references to Footnote 42 in the Fees Schedule. The Exchange
proposes to correct that oversight and delete such references, which
will avoid potential confusion.
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\8\ See Securities Exchange Act Release No. 83587 (July 3,
2018), 83 FR 31810 (July 9, 2018) (SR-CBOE-2018-051).
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\9\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \10\ 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,\11\ which requires that Exchange rules
provide for the equitable allocation of reasonable dues, fees, and
other charges among its Trading Permit Holders and other persons using
its facilities.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
\11\ 15 U.S.C. 78f(b)(4).
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First, the Exchange believes adjusting the VIP volume thresholds
for Tiers 4 and 5 is reasonable because it adjusts for the current
volume trends and makes it slightly easier for TPHs to meet the
qualifying criteria to achieve the highest tier, Tier 5. The Exchange
also notes that the credits offered under VIP are not changing. Rather,
the rebalance of tiers still allows the Exchange to maintain an
incremental incentive for TPHs to strive for the highest tier level,
which provides increasingly higher credits. The Exchange believes it is
equitable and not unfairly discriminatory because the proposed changes
to the qualifying volume thresholds apply to all TPHs uniformly.
The Exchange believes increasing the fee for Market-Maker
executions in RUT is reasonable because the proposed rate change is
less than the amount assessed for similar transactions on another
Exchange and is also similar to Market-Maker fees assessed for other
proprietary products.\12\ The Exchange believes that this proposed
change is also equitable and not unfairly discriminatory because the
proposed changes will apply equally to all Market-Makers uniformly.
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\12\ See Cboe BZX Fees Schedule. See also Cboe Options Fees
Schedule, SPX Liquidity Provider Sliding Scale.
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The Exchange believes the proposed rule change to waive fees for
Customer electronic executions in ETF and ETN options that add
liquidity, but assess $0.18 per contract for such executions that
remove liquidity and are of an order size of 100 contracts or greater,
is reasonable because Customers will pay nothing for these executions
where they add liquidity and will be paying the same rate as is
currently provided for under the fees schedule (i.e., $0.18 per
contract) when they remove liquidity. The Exchange believes the
proposed rule change is equitable and not unfairly discriminatory
because the proposed rule change applies to all Customers equally.
Additionally, the proposed rule change is designed to encourage posted
liquidity to the Exchange. Particularly, the Exchange believes it's
equitable and not unfairly discriminatory to assess this fee for orders
that remove liquidity and not orders that add liquidity because the
Exchange wants to encourage market participation and price improvement.
The Exchange believes the proposed updates to Footnote 9 provide
clarity in the Fees Schedule and alleviates potential confusion as to
what volume would be considered ``Taker'' vs ``Maker'' for purposes of
this fee. The alleviation of confusion removes impediments to and
perfects the mechanism of a free and open market and a national market
system, and, in general, protects investors and the public interest.
The Exchange believes extending the applicability of the SPXW
Execution Surcharge to all market participants other than Market-Makers
is reasonable as it aligns the applicability of the surcharge to the
same market participants subject to the SPX Hybrid Execution Surcharge
and because the surcharge amount is not changing. The Exchange believes
it's equitable and not unfairly discriminatory to apply the SPXW
Execution Surcharge to all market participants other than Market-Makers
because Market-Makers, unlike other market participants, take on a
number of obligations, including quoting obligations, that other market
participants do not have. The Exchange believes the proposed updates to
Footnotes 21 and 31 in connection with the proposed SPXW Execution
Surcharge change provides clarity in the Fees Schedule and alleviates
potential confusion, thereby removing impediments to and perfecting the
mechanism of a free and open market and a national market system, and,
in general, protecting investors and the public interest.
The Exchange believes it's reasonable to eliminate the Supplemental
VIX Discount because it is not required to provide such a discount.
Additionally, the Exchange notes that Clearing TPHs have other
opportunities to obtain a discount on VIX executions, such as via the
Cboe Proprietary Product Sliding Scale programs. The Exchange believes
it's equitable and not unfairly discriminatory because it applies
uniformly to all Clearing TPHs.
The Exchange believes amending the TP Sliding Scales to provide
that any commitment to Trading Permits under the TP Sliding Scales
shall be in place through September 2019, instead of the calendar year,
is reasonable because the discounted Trading Permit rates and tier
levels are not changing. The Exchange believes this proposed rule
change is reasonable, equitable and not unfairly discriminatory
because, as discussed above, the Exchange anticipates modifying the
current Trading Permit structure upon the migration of its trading
system in October 2019. The Exchange notes that through September 2019,
Floor Brokers and Market-Makers are still eligible to take advantage of
these sliding scale programs, which offer discounts on Trading Permits.
Additionally, the proposed rule change applies to all Markets-Makers
and Floor Brokers uniformly.
The Exchange believes the proposed rule change to eliminate per
occurrence badge issuance fees and coat room services fees are
reasonable as TPHs will no longer be subject to these fees.
Additionally, with respect to the coat room service fees, the Exchange
notes such services will be eliminated as of February 1, 2019.
Additionally, the proposed elimination applies to all TPHs. The
Exchange believes the proposed increases to the Floor Manager and Clerk
Badge fees are reasonable
[[Page 6449]]
because they are a moderate increase, these fees have not been
increased in several years, and other badge-related fees are being
eliminated. Additionally the proposed fee increases applies to all TPHs
who need to avail themselves of these badges.
The Exchange believes it's appropriate to continue to waive the VIX
and Sector Index License Surcharge for Clearing Trading Permit Holder
Proprietary Sector Index and VIX orders that have a premium of $0.10 or
lower and have series with an expiration of 7 calendar days or less
because the Exchange wants to continue encouraging Firms to roll and
close over these positions. Particularly, the Exchange believes it's
reasonable to waive the entire $0.10 per contract surcharge because
without the waiver of the surcharge, firms are less likely to engage in
these transactions, as opposed to other VIX and Sector Index
transactions, due to the associated transaction costs. The Exchange
believes it's equitable and not unfairly discriminatory to limit the
waiver to Clearing Trading Permit Holder Proprietary orders because
they contribute capital to facilitate the execution of Sector Index
customer orders and VIX customer orders with a premium of $0.10 or
lower and series with an expiration of 7 calendar days or less.
Finally, the Exchange believes it's reasonable, equitable and not
unfairly discriminatory to provide that the surcharge will be waived
through June 30, 2019, as it gives the Exchange additional time to
evaluate if the waiver is continuing to have the desired effect of
encouraging these transactions.
The Exchange believes renewing the waiver of GTH Trading Permit and
Bandwidth Packet fees for one of each type of Trading Permit and
Bandwidth Packet, per affiliated TPH through June 30, 2019 is
reasonable, equitable and not unfairly discriminatory, because those
respective fees would be waived in their entirety, which promotes and
encourages trading during the GTH session and applies to all GTH TPHs.
The Exchange believes it's also reasonable, equitable and not unfairly
discriminatory to waive fees for Login IDs related to waived Trading
Permits and/or Bandwidth Packets in order to promote and encourage
ongoing participation in GTH and also applies to all GTH TPHs.
The Exchange believes it is reasonable, equitable and not unfairly
discriminatory to renew the waiver of all transaction fees for RLG,
RLV, RUI, AWDE, FTEM, FXTM and UKXM transactions, including the Floor
Brokerage fee, the License Index Surcharge and CFLEX Surcharge Fee,
because the respective fees are being waived in their entirety, which
promotes and encourages trading of these products which are still
relatively new and applies to all TPHs.
The Exchange believes that it is reasonable, equitable and not
unfairly discriminatory to renew the compensation plan to the DPM
appointed in UKXM to continue to offset its ongoing DPM costs and
continue to incentivize the DPM to continue to serve as a DPM in this
product.
Lastly, the Exchange believes eliminating references to Footnote 42
(which footnote does not currently contain any language and is
obsolete) alleviates potential confusion. The alleviation of confusion
removes impediments to and perfects the mechanism of a free and open
market and a national market system, and, in general, protects
investors and the public interest.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule changes will
impose any burden on competition that are not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange does not
believe that the proposed rule change will impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act because, while different fees
and rebates are assessed to different market participants in some
circumstances, these different market participants have different
obligations and different circumstances. For example, Clearing TPHs
have clearing obligations that other market participants do not have.
Market-Makers have quoting obligations that other market participants
do not have. There is also a history in the options markets of
providing preferential treatment to customers, as they often do not
have as sophisticated trading operations and systems as other market
participants, which often makes other market participants prefer to
trade with customers. Further, the Exchange fees and rebates, both
current and those proposed to be changed, are intended to encourage
market participants to bring increased volume to the Exchange (which
benefits all market participants), while still covering Exchange costs
(including those associated with the upgrading and maintenance of
Exchange systems).
The Exchange does not believe that the proposed rule changes will
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
proposed changes are intended to promote competition and better improve
the Exchange's competitive position and make Cboe Options a more
attractive marketplace in order to encourage market participants to
bring increased volume to the Exchange (while still covering costs as
necessary). Further, the proposed changes only affect trading on the
Exchange. To the extent that the proposed changes make Cboe Options a
more attractive marketplace for market participants at other exchanges,
such market participants are welcome to become Cboe Options 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 \13\ and paragraph (f) of Rule 19b-4 \14\
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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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 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-2019-012 on the subject line.
[[Page 6450]]
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-2019-012. 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 website (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 website 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CBOE-2019-012 and should be submitted on
or before March 20, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-03332 Filed 2-26-19; 8:45 am]
BILLING CODE 8011-01-P
