80 FR 26124 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 87 (May 6, 2015)
Federal Register Volume 80, Issue 87 (May 6, 2015)
| Page Range | 26124-26127 | |
| FR Document | 2015-10505 |
[Federal Register Volume 80, Number 87 (Wednesday, May 6, 2015)] [Notices] [Pages 26124-26127] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-10505] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74854; File No. SR-CBOE-2015-041] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule April 30, 2015. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on April 20, 2015, Chicago Board Options Exchange, Incorporated (``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. The text of the proposed rule change is available on the Exchange's Web site (http://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 [[Page 26125]] 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 On, April 8 2015, the Securities and Exchange Commission (the ``Commission'') approved a proposed rule change that would amend CBOE rules to permit the listing and trading of options that overlie the MSCI EAFE Index (``MXEA options'') and the MSCI Emerging Markets Index (``MXEF options'').\3\ As such, the Exchange proposes to establish fees for MXEA and MXEF, effective April 21, 2015. --------------------------------------------------------------------------- \3\ See Securities Exchange Act Release No. 74681 (April 8, 2015), 80 FR 71 [sic] (April 14, 2015) (SR-CBOE-2015-023). --------------------------------------------------------------------------- First, the Exchange proposes to establish transaction fees for MXEA and MXEF. Under the proposed fees structure, Customers (``C'' origin code) will be assessed no transaction fee for MXEA and MXEF transactions. The absence of a Customer transaction fee for MXEA and MXEF options will provide greater incentives for Customers to trade MXEA and MXEF. The Exchange notes that currently another proprietary index option, XSP, is also not assessed a fee for Customer transactions.\4\ --------------------------------------------------------------------------- \4\ See CBOE Fees Schedule, Index Options Rate Table--All Index Products Excluding Underlying Symbol List A. --------------------------------------------------------------------------- Next, the Exchange proposes to assess Clearing Trading Permit Holder proprietary (``F'' origin code) and Non-Trading Permit Holder Affiliate (``L'' origin code) MXEA and MXEF transactions $0.20 per contract for manual and Automated Improvement Mechanism (``AIM'') Agency/Primary transactions, $0.35 per contract for electronic transactions, $0.05 per contract for AIM Contra transactions and $0.25 per contract for Flex Hybrid Trading Systems (``CFLEX'') AIM Response transactions. The Exchange also proposes to count MXEA and MXEF volume towards the Clearing Trading Permit Holder Fee Cap (``Fee Cap''). This will help these market participants to reach this cap on their fees. Additionally, the Exchange recognizes that Clearing Trading Permit Holders can be an important source of liquidity when they facilitate their own customers' trading activity and, as such, the Exchange proposes to apply the waiver of Clearing Trading Permit Holder Proprietary transaction fees for facilitation orders executed via CFLEX, in open outcry or electronically via AIM. The Exchange notes that the proposed transaction fee amounts for Clearing Trading Permit Holder proprietary and Non-Trading Permit Holder Affiliate transactions are the same for Clearing Trading Permit Holder proprietary and Non- Trading Permit Holder Affiliate transactions in all other index products except for Underlying Symbol List A.\5\ --------------------------------------------------------------------------- \5\ See CBOE Fees Schedule, Index Options Rate Table--All Index Products Excluding Underlying Symbol List A. As of April 1, 2015, the following products are included in Underlying Symbol List A: OEX, XEO, RUT, SPX (including SPXw), SPXpm, SRO, VIX, VXST, VOLATILITY INDEXES and binary options. --------------------------------------------------------------------------- Currently, Market-Maker transactions in all products except for those listed in Underlying Symbol List A are subject to the Liquidity Provider Sliding Scale, which provides for reduced transaction fees for Market-Makers that reach certain volume thresholds in all underlying symbols excluding Underlying Symbol List A and mini-options. Similarly, the Exchange proposes to subject all Market-Maker MXEA and MXEF transactions to the Liquidity Provider Sliding Scale. The Exchange next proposes to establish transaction fees for Broker-Dealers (``B''), Non-Trading Permit Holder Market-Makers (``N''), Professionals/Voluntary Professionals (``W'') and Joint Back- Offices (``JBOs'') (``J''). Specifically, the Exchange proposes to assess these market participants $0.25 per contract for manual transactions, $0.65 per contract for non-AIM electronic transactions, $0.20 per contract for AIM Agency/Primary transactions, and $0.05 per contract for AIM Contra transactions. Additionally for MXEA and MXEF transactions, the Exchange is proposing to assess Broker-Dealers and Non-Trading Permit Holder Market Makers $0.25 per contract for CFLEX AIM Response transactions and Professional/Voluntary Professionals and JBOs $0.30 per contract for CFLEX AIM Response transactions. The Exchange notes that the proposed MXEA and MXEF transaction fees for these market participants are also the same amounts assessed for the same market participants for other index options other than those in Underlying Symbol List A.\6\ --------------------------------------------------------------------------- \6\ Id. --------------------------------------------------------------------------- The Exchange also proposes to assess an Index License Surcharge (``Surcharge'') for MXEA and MXEF of $0.10 per contract for all non- customer orders. The Exchange proposes to adopt the Index License Surcharge for these products in order to recoup some of the costs associated with the license for MXEA and MXEF options. Additionally, the Exchange proposes to adopt a CFLEX Surcharge Fee of $0.10 per contract for all MXEA and MXEF orders executed electronically on CFLEX, capped at $250 per trade (i.e., first 2,500 contracts per trade). The CFLEX Surcharge Fee assists the Exchange in recouping the cost of developing and maintaining the CFLEX system. The Exchange notes that the CFLEX Surcharge Fee (and $250 cap) also applies to other proprietary index options, including products in Underlying Symbol List A, as well as DJX and XSP.\7\ The Exchange also notes that the Complex Order Book (``COB'') Taker Surcharge will also apply to MXEA and MXEF, as it does for all products other than those in Underlying Symbol list A and mini-options.\8\ --------------------------------------------------------------------------- \7\ See CBOE Fees Schedule, Index Options Rate Table--All Index Products Excluding Underlying Symbol List A, CFLEX Surcharge Fee [sic] and Specified Proprietary Index Options Rate Table--Underlying Symbol List A, CFLEX Surcharge Fee. \8\ See CBOE Fees Schedule, COB Taker Surcharge, Footnote 35. --------------------------------------------------------------------------- The Exchange next proposes to count MXEA and MXEF options towards the average daily volume thresholds for the CBOE Proprietary Product Sliding Scale. The CBOE Proprietary Products Sliding Scale provides that Clearing Trading Permit Holder Proprietary transaction fees and transaction fees for Non-Clearing Trading Permit Holder Affiliates in Underlying Symbol List A \9\ are reduced provided a Clearing Trading Permit Holder (``Clearing TPH'') reaches certain average daily volume (``ADV'') thresholds in all underlying symbols excluding Underlying Symbol List A and mini-options on the Exchange in a month. The Exchange notes that other proprietary index products such as DJX and XSP are also included towards the qualification thresholds of the CBOE Proprietary Products Sliding Scale. --------------------------------------------------------------------------- \9\ SROs are currently excluded from the CBOE Proprietary Products Sliding Scale. See Exchange Fees Schedule, CBOE Proprietary Products Sliding Scale. --------------------------------------------------------------------------- Finally, like other proprietary index products, the Exchange proposes to except MXEA and MXEF from the Volume Incentive Program, \10\ the Marketing Fee, \11\ and eligibility for payments under the Order Router Subsidy (ORS) and Complex Order Router Subsidy (CORS) Programs \12\. Additionally, it will be excluded from the calculation of qualifying volume for [[Page 26126]] rebates for Floor Broker Trading Permit Holder Trading Permit Fees.\13\ --------------------------------------------------------------------------- \10\ See CBOE Fees Schedule, Volume Incentive Program. \11\ See CBOE Fees Schedule, Marketing Fee, Footnote 6. \12\ See CBOE Fees Schedule, Order Router Subsidy Program and Complex Order Subsidy Program, Footnotes 29 and 30. \13\ See CBOE Fees Schedule, Footnote 25. --------------------------------------------------------------------------- 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.\14\ Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \15\ 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,\16\ 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. --------------------------------------------------------------------------- \14\ 15 U.S.C. 78f(b). \15\ 15 U.S.C. 78f(b)(5). \16\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- Particularly, the Exchange believes it is reasonable to charge different fee amounts to different user types in the manner proposed because the proposed fees are consistent with the price differentiation that exists today for other index products. The Exchange also believes that the proposed fee amounts for MXEA and MXEF orders are reasonable because the proposed fee amounts are within the range of amounts assessed for the Exchange's other index products, excluding Underlying Symbol List A.\17\ --------------------------------------------------------------------------- \17\ See CBOE Fees Schedule, CBOE Fees Schedule, Index Options Rate Table--All Index Products Excluding Underlying Symbol List A. --------------------------------------------------------------------------- The Exchange believes that it is equitable and not unfairly discriminatory to assess lower fees to Customers as compared to other market participants because Customer order flow enhances liquidity on the Exchange for the benefit of all market participants. Specifically, customer liquidity benefits all market participants by providing more trading opportunities, which attracts Market-Makers. An increase in the activity of these market participants in turn facilitates tighter spreads, which may cause an additional corresponding increase in order flow from other market participants. The fees offered to customers are intended to attract more customer trading volume to the Exchange. Moreover, the options industry has a long history of providing preferential pricing to Customers, and the Exchange's current Fees Schedule currently does so in many places, as do the fees structures of many other exchanges. Finally, all fee amounts listed as applying to Customers will be applied equally to all Customers (meaning that all Customers will be assessed the same amount). The Exchange believes that it is equitable and not unfairly discriminatory to offer the Liquidity Provider Sliding Scale to Market- Makers only because Market-Makers take on obligations, such as quoting obligations, which other market participants do not have. Further, the lower fees offered to Market-Makers are intended to incent Market- Makers to quote and trade more on the Exchange, thereby providing more trading opportunities for all market participants. Similarly, it is equitable and not unfairly discriminatory to assess lower fees to Clearing Trading Permit Holder Proprietary orders than those of other market participants (except Customers and Market- Makers) because Clearing Trading Permit Holders also have a number of obligations (such as membership with the Options Clearing Corporation), significant regulatory burdens, and financial obligations, that other market participants do not need to take on. It should also be noted that all fee amounts described herein are intended to attract greater order flow to the Exchange in MXEA and MXEF, which should therefore serve to benefit all Exchange market participants. The Exchange also notes that the MXEA and MXEF fee amounts for each separate type of market participant will be assessed equally to all such market participants (i.e. all Broker-Dealer orders will be assessed the same amount, all Joint Back-Office orders will be assessed the same amount, etc.). The Exchange believes that assessing an Index License Surcharge Fee of $0.10 per contract to MXEA and MXEF transactions is reasonable because the Surcharge helps recoup some of the costs associated with the license for MXEA and MXEF options. Additionally, the Exchange notes that the Surcharge amount is the same as, and in some cases lower than, the amount assessed as an Index License Surcharge to other index products.\18\ The proposed Surcharge is also equitable and not unfairly discriminatory because the amount will be assessed to all market participants to whom the Surcharge applies. Not applying the MXEA and MXEF Index License Surcharge Fee to Customer orders is equitable and not unfairly discriminatory because this is designed to attract Customer MXEA and MXEF orders, which increases liquidity and provides greater trading opportunities to all market participants. Similarly, the Exchange believes assessing a CFLEX Surcharge Fee of $0.10 per contract for all MXEA and MXEF orders executed electronically on CFLEX and capping it at $250 (i.e., first 2,500 contracts per trade) is reasonable because it is the same amount currently charged to other proprietary index products for the same transactions.\19\ The proposed Surcharge is also equitable and not unfairly discriminatory because the amount will be assessed to all market participants to whom the CFLEX Surcharge applies. --------------------------------------------------------------------------- \18\ See CBOE Fees Schedule, CBOE Fees Schedule, Index Options Rate Table--All Index Products Excluding Underlying Symbol List A, Surcharge Fee Index License. \19\ See CBOE Fees Schedule, Index Options Rate Table--All Index Products Excluding Underlying Symbol List A, CFLEX Surcharge Fee and Specified Proprietary Index Options Rate Table--Underlying Symbol List A, CFLEX Surcharge Fee. --------------------------------------------------------------------------- Additionally, the Exchange believes that the proposal to count MXEA and MXEF fees towards the Fee Cap is reasonable because it will help Clearing Trading Permit Holders to reach this cap on their fees. The Exchange believes this is equitable and not unfairly discriminatory MXEA and MXEF fees will count towards the Fee Cap in the same manner that transaction fees for all other products excluding Underlying Symbol List A (except for binary options) count towards the Fee Cap. The Exchange believes it's reasonable to apply the waiver of Clearing Trading Permit Holder Proprietary transaction fees for facilitation orders executed via CFLEX, in open outcry or electronically via AIM for MXEA and MXEF because it will exempt such orders from being assessed fees. The Exchange believes that this is equitable and not unfairly discriminatory because the waiver also applies to other products, including other proprietary index products (e.g., DJX and XSP). Further, the Exchange recognizes that Clearing Trading Permit Holders can be an important source of liquidity when they facilitate their own customers' trading activity. Such trades add transparency and promote price discovery to the benefit of all market participants. Moreover, the exemption [[Page 26127]] from fees for MXEA and MXEF facilitation orders executed in AIM, open outcry, or as a CFLEX transaction will apply to all such orders. The Exchange believes it's reasonable to count MXEA and MXEF volume towards the average daily volume thresholds for the CBOE Proprietary Product Sliding Scale because other proprietary index products such as DJX and XSP are also included towards the qualification thresholds of the CBOE Proprietary Products Sliding Scale.\20\ The Exchange believes the proposed inclusion of MXEA and MXEF in the qualifying volume is equitable and not unfairly discriminatory because it will apply to all Clearing Trading Permit Holder Proprietary MXEA and MXEF orders --------------------------------------------------------------------------- \20\ See CBOE Fees Schedule, CBOE Proprietary Products Sliding Scale. --------------------------------------------------------------------------- Finally, excepting MXEA and MXEF from the Marketing Fee, VIP, and the ORS and CORS Programs is reasonable because other proprietary index products (e.g., DJX and XSP) are also excepted from these fees and programs.\21\ It seems equitable to except MXEA and MXEF from items on the Fees Schedule from which other proprietary index products are also excepted. Similarly, the Exchange believes it's reasonable to exclude MXEA and MXEF from the calculation of the qualifying volume for the Floor Broker Trading Permit Fees rebate because other proprietary index products such as DJX and XSP are also excluded.\22\ The Exchange also believes the proposed exclusion of MXEA and MXEF from the qualifying calculation is equitable and not unfairly discriminatory because the exclusion will apply to all MXEA and MXEF orders. --------------------------------------------------------------------------- \21\ See CBOE Fees Schedule, Volume Incentive Program, Marketing Fee, Footnote 6 and Order Router Subsidy Program and Complex Order Subsidy Program, Footnotes 29 and 30. \22\ See CBOE Fees Schedule, Footnote 25. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule changes will impose any burden on competition that are not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed rule change will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because, while different fees are assessed to different market participants in some circumstances, these different market participants have different obligations and different circumstances as discussed above. For example, Market-Makers have quoting obligations that other market participants do not have. The Exchange does not believe that the proposed rule changes will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because MXEA and MXEF will be exclusively listed on CBOE. To the extent that the proposed changes make CBOE a more attractive marketplace for market participants at other exchanges, such market participants are welcome to become CBOE market participants. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act \23\ and paragraph (f) of Rule 19b-4 \24\ 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. --------------------------------------------------------------------------- \23\ 15 U.S.C. 78s(b)(3)(A). \24\ 17 CFR 240.19b-4(f). --------------------------------------------------------------------------- IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic commentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-CBOE-2015-041 on the subject line. Paper comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-CBOE-2015-041. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://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-2015-041 and should be submitted on or before May 27, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\25\ --------------------------------------------------------------------------- \25\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2015-10505 Filed 5-5-15; 8:45 am] BILLING CODE 8011-01-P
![26124 Federal Register / Vol. 80, No. 87 / Wednesday, May 6, 2015 / Notices
securities as defined in the 1940 Act, or, the discretion of the then- existing For the Commission, by the Division of
in the case of a new Subadvised Series Independent Board Members. Investment Management, under delegated
whose public shareholders purchase authority.
8. The Adviser will provide the Brent J. Fields,
shares on the basis of a prospectus Board, no less frequently than quarterly,
containing the disclosure contemplated Secretary.
with information about the profitability
by condition 2 below, by the sole initial [FR Doc. 2015–10511 Filed 5–5–15; 8:45 am]
of the Adviser on a per Subadvised
shareholder before offering the BILLING CODE 8011–01–P
Series basis. The information will reflect
Subadvised Series’ shares to the public.
the impact on profitability of the hiring
2. The prospectus for each
Subadvised Series will disclose the or termination of any sub-adviser during SECURITIES AND EXCHANGE
existence, substance, and effect of any the applicable quarter. COMMISSION
order granted pursuant to the 9. Whenever a sub-adviser is hired or
application. Each Subadvised Series terminated, the Adviser will provide the [Release No. 34–74854; File No. SR–CBOE–
will hold itself out to the public as Board with information showing the 2015–041]
employing the multi-manager structure expected impact on the profitability of
described in the application. Each the Adviser. Self-Regulatory Organizations;
prospectus will prominently disclose Chicago Board Options Exchange,
10. Whenever a sub-adviser change is Incorporated; Notice of Filing and
that the Adviser has the ultimate proposed for a Subadvised Series with
responsibility, subject to oversight by Immediate Effectiveness of a Proposed
an Affiliated Sub-Advisor, the Board, Rule Change To Amend the Fees
the Board, to oversee the Sub-Advisers
including a majority of the Independent Schedule
and recommend their hiring,
termination and replacement. Board Members, will make a separate
finding, reflected in the Board minutes, April 30, 2015.
3. The Adviser will provide general Pursuant to Section 19(b)(1) of the
management services to a Subadvised that such change is in the best interests
of the Subadvised Series and its Securities Exchange Act of 1934 (the
Series, including overall supervisory ‘‘Act’’),1 and Rule 19b–4 thereunder,2
responsibility for the general shareholders, and does not involve a
conflict of interest from which the notice is hereby given that on April 20,
management and investment of the 2015, Chicago Board Options Exchange,
Subadvised Series’ assets. Subject to Advisor or the Affiliated Sub-Advisor
Incorporated (‘‘Exchange’’ or ‘‘CBOE’’)
review and approval of the Board, the derives an inappropriate advantage.
filed with the Securities and Exchange
Adviser will (a) set a Subadvised Series’ 11. No trustee or officer of the Trust Commission (the ‘‘Commission’’) the
overall investment strategies, (b) or a Subadvised Series, or partner, proposed rule change as described in
evaluate, select, and recommend Sub- director, manager or officer of the Items I, II, and III below, which Items
Advisers to manage all or a portion of Adviser, will own directly or indirectly have been prepared by the Exchange.
a Subadvised Series’ assets, and (c) (other than through a pooled investment The Commission is publishing this
implement procedures reasonably vehicle that is not controlled by such notice to solicit comments on the
designed to ensure that Sub-Advisers person), any interest in a Sub-Adviser, proposed rule change from interested
comply with a Subadvised Series’ except for (a) ownership of interests in persons.
investment objective, policies and the Adviser or any entity that controls,
restrictions. Subject to review by the I. Self-Regulatory Organization’s
is controlled by, or is under common Statement of the Terms of Substance of
Board, the Adviser will (a) when
control with the Adviser; or (b) the Proposed Rule Change
appropriate, allocate and reallocate a
ownership of less than 1% of the
Subadvised Series’ assets among The Exchange proposes to amend its
outstanding securities of any class of
multiple Sub-Advisers; and (b) monitor Fees Schedule. The text of the proposed
and evaluate the performance of Sub- equity or debt of a publicly traded
company that is either a Sub-Adviser or rule change is available on the
Advisers. Exchange’s Web site (http://
4. A Subadvised Series will not make an entity that controls, is controlled by,
or is under common control with a Sub- www.cboe.com/AboutCBOE/
any Ineligible Sub-Adviser Changes CBOELegalRegulatoryHome.aspx), at
without such agreement, including the Adviser.
the Exchange’s Office of the Secretary,
compensation to be paid thereunder, 12. Each Subadvised Series will and at the Commission’s Public
being approved by the shareholders of disclose the Aggregate Fee Disclosure in Reference Room.
the applicable Subadvised Series. its registration statement.
5. Subadvised Series will inform II. Self-Regulatory Organization’s
13. Any new Sub-Advisory Statement of the Purpose of, and
shareholders of the hiring of a new Sub- Agreement or any amendment to a
Adviser within 90 days after the hiring Statutory Basis for, the Proposed Rule
Subadvised Series’ existing Investment Change
of the new Sub-Adviser pursuant to the Management Agreement or Sub-
Modified Notice and Access Procedures. Advisory Agreement that directly or In its filing with the Commission, the
6. At all times, at least a majority of indirectly results in an increase in the Exchange included statements
the Board will be Independent Board concerning the purpose of and basis for
aggregate advisory fee rate payable by
Members, and the selection and the proposed rule change and discussed
the Subadvised Series will be submitted
nomination of new or additional any comments it received on the
to the Subadvised Series’ shareholders
Independent Board Members will be proposed rule change. The text of these
for approval.
tkelley on DSK3SPTVN1PROD with NOTICES
placed within the discretion of the then- statements may be examined at the
existing Independent Board Members. 14. In the event the Commission places specified in Item IV below. The
7. Independent Legal Counsel, as adopts a rule under the Act providing Exchange has prepared summaries, set
defined in Rule 0–1(a)(6) under the 1940 substantially similar relief to that forth in sections A, B, and C below, of
Act, will be engaged to represent the requested in the application, the
Independent Board Members. The requested order will expire on the 1 15 U.S.C. 78s(b)(1).
selection of such counsel will be within effective date of that rule. 2 17 CFR 240.19b–4.
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![Federal Register / Vol. 80, No. 87 / Wednesday, May 6, 2015 / Notices 26125
the most significant aspects of such AIM. The Exchange notes that the MXEA and MXEF options. Additionally,
statements. proposed transaction fee amounts for the Exchange proposes to adopt a
Clearing Trading Permit Holder CFLEX Surcharge Fee of $0.10 per
A. Self-Regulatory Organization’s
proprietary and Non-Trading Permit contract for all MXEA and MXEF orders
Statement of the Purpose of, and
Holder Affiliate transactions are the executed electronically on CFLEX,
Statutory Basis for, the Proposed Rule
same for Clearing Trading Permit Holder capped at $250 per trade (i.e., first 2,500
Change proprietary and Non-Trading Permit contracts per trade). The CFLEX
1. Purpose Holder Affiliate transactions in all other Surcharge Fee assists the Exchange in
On, April 8 2015, the Securities and index products except for Underlying recouping the cost of developing and
Exchange Commission (the Symbol List A.5 maintaining the CFLEX system. The
Currently, Market-Maker transactions Exchange notes that the CFLEX
‘‘Commission’’) approved a proposed
in all products except for those listed in Surcharge Fee (and $250 cap) also
rule change that would amend CBOE
Underlying Symbol List A are subject to applies to other proprietary index
rules to permit the listing and trading of
the Liquidity Provider Sliding Scale, options, including products in
options that overlie the MSCI EAFE
which provides for reduced transaction Underlying Symbol List A, as well as
Index (‘‘MXEA options’’) and the MSCI
fees for Market-Makers that reach DJX and XSP.7 The Exchange also notes
Emerging Markets Index (‘‘MXEF
certain volume thresholds in all that the Complex Order Book (‘‘COB’’)
options’’).3 As such, the Exchange underlying symbols excluding
proposes to establish fees for MXEA and Taker Surcharge will also apply to
Underlying Symbol List A and mini- MXEA and MXEF, as it does for all
MXEF, effective April 21, 2015. options. Similarly, the Exchange
First, the Exchange proposes to products other than those in Underlying
proposes to subject all Market-Maker Symbol list A and mini-options.8
establish transaction fees for MXEA and
MXEA and MXEF transactions to the The Exchange next proposes to count
MXEF. Under the proposed fees
Liquidity Provider Sliding Scale. MXEA and MXEF options towards the
structure, Customers (‘‘C’’ origin code) The Exchange next proposes to
will be assessed no transaction fee for average daily volume thresholds for the
establish transaction fees for Broker- CBOE Proprietary Product Sliding Scale.
MXEA and MXEF transactions. The Dealers (‘‘B’’), Non-Trading Permit
absence of a Customer transaction fee The CBOE Proprietary Products Sliding
Holder Market-Makers (‘‘N’’), Scale provides that Clearing Trading
for MXEA and MXEF options will Professionals/Voluntary Professionals
provide greater incentives for Customers Permit Holder Proprietary transaction
(‘‘W’’) and Joint Back-Offices (‘‘JBOs’’) fees and transaction fees for Non-
to trade MXEA and MXEF. The (‘‘J’’). Specifically, the Exchange
Exchange notes that currently another Clearing Trading Permit Holder
proposes to assess these market Affiliates in Underlying Symbol List A 9
proprietary index option, XSP, is also participants $0.25 per contract for
not assessed a fee for Customer are reduced provided a Clearing Trading
manual transactions, $0.65 per contract Permit Holder (‘‘Clearing TPH’’) reaches
transactions.4 for non-AIM electronic transactions,
Next, the Exchange proposes to assess certain average daily volume (‘‘ADV’’)
$0.20 per contract for AIM Agency/ thresholds in all underlying symbols
Clearing Trading Permit Holder
Primary transactions, and $0.05 per excluding Underlying Symbol List A
proprietary (‘‘F’’ origin code) and Non-
contract for AIM Contra transactions. and mini-options on the Exchange in a
Trading Permit Holder Affiliate (‘‘L’’
Additionally for MXEA and MXEF month. The Exchange notes that other
origin code) MXEA and MXEF
transactions, the Exchange is proposing proprietary index products such as DJX
transactions $0.20 per contract for
to assess Broker-Dealers and Non- and XSP are also included towards the
manual and Automated Improvement
Trading Permit Holder Market Makers qualification thresholds of the CBOE
Mechanism (‘‘AIM’’) Agency/Primary
$0.25 per contract for CFLEX AIM Proprietary Products Sliding Scale.
transactions, $0.35 per contract for
Response transactions and Professional/ Finally, like other proprietary index
electronic transactions, $0.05 per
Voluntary Professionals and JBOs $0.30 products, the Exchange proposes to
contract for AIM Contra transactions
per contract for CFLEX AIM Response except MXEA and MXEF from the
and $0.25 per contract for Flex Hybrid
transactions. The Exchange notes that Volume Incentive Program, 10 the
Trading Systems (‘‘CFLEX’’) AIM
the proposed MXEA and MXEF Marketing Fee, 11 and eligibility for
Response transactions. The Exchange
transaction fees for these market payments under the Order Router
also proposes to count MXEA and
participants are also the same amounts Subsidy (ORS) and Complex Order
MXEF volume towards the Clearing
assessed for the same market Router Subsidy (CORS) Programs 12.
Trading Permit Holder Fee Cap (‘‘Fee
participants for other index options Additionally, it will be excluded from
Cap’’). This will help these market
other than those in Underlying Symbol the calculation of qualifying volume for
participants to reach this cap on their
List A.6
fees. Additionally, the Exchange The Exchange also proposes to assess
recognizes that Clearing Trading Permit an Index License Surcharge
7 See CBOE Fees Schedule, Index Options Rate
Holders can be an important source of Table—All Index Products Excluding Underlying
(‘‘Surcharge’’) for MXEA and MXEF of Symbol List A, CFLEX Surcharge Fee [sic] and
liquidity when they facilitate their own $0.10 per contract for all non-customer Specified Proprietary Index Options Rate Table—
customers’ trading activity and, as such, orders. The Exchange proposes to adopt Underlying Symbol List A, CFLEX Surcharge Fee.
the Exchange proposes to apply the the Index License Surcharge for these
8 See CBOE Fees Schedule, COB Taker Surcharge,
waiver of Clearing Trading Permit Footnote 35.
products in order to recoup some of the 9 SROs are currently excluded from the CBOE
Holder Proprietary transaction fees for costs associated with the license for Proprietary Products Sliding Scale. See Exchange
facilitation orders executed via CFLEX, Fees Schedule, CBOE Proprietary Products Sliding
tkelley on DSK3SPTVN1PROD with NOTICES
in open outcry or electronically via 5 See CBOE Fees Schedule, Index Options Rate Scale.
10 See CBOE Fees Schedule, Volume Incentive
Table—All Index Products Excluding Underlying
3 See Securities Exchange Act Release No. 74681 Symbol List A. As of April 1, 2015, the following Program.
(April 8, 2015), 80 FR 71 [sic] (April 14, 2015) (SR– products are included in Underlying Symbol List A: 11 See CBOE Fees Schedule, Marketing Fee,
CBOE–2015–023). OEX, XEO, RUT, SPX (including SPXw), SPXpm, Footnote 6.
4 See CBOE Fees Schedule, Index Options Rate SRO, VIX, VXST, VOLATILITY INDEXES and 12 See CBOE Fees Schedule, Order Router
Table—All Index Products Excluding Underlying binary options. Subsidy Program and Complex Order Subsidy
Symbol List A. 6 Id. Program, Footnotes 29 and 30.
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![Federal Register / Vol. 80, No. 87 / Wednesday, May 6, 2015 / Notices 26127
from fees for MXEA and MXEF as discussed above. For example, Commission, 100 F Street NE.,
facilitation orders executed in AIM, Market-Makers have quoting obligations Washington, DC 20549–1090.
open outcry, or as a CFLEX transaction that other market participants do not All submissions should refer to File
will apply to all such orders. have. Number SR–CBOE-2015–041. This file
The Exchange believes it’s reasonable The Exchange does not believe that number should be included on the
to count MXEA and MXEF volume the proposed rule changes will impose subject line if email is used. To help the
towards the average daily volume any burden on intermarket competition Commission process and review your
thresholds for the CBOE Proprietary that is not necessary or appropriate in comments more efficiently, please use
Product Sliding Scale because other furtherance of the purposes of the Act only one method. The Commission will
proprietary index products such as DJX because MXEA and MXEF will be post all comments on the Commission’s
and XSP are also included towards the exclusively listed on CBOE. To the Internet Web site (http://www.sec.gov/
qualification thresholds of the CBOE extent that the proposed changes make rules/sro.shtml). Copies of the
Proprietary Products Sliding Scale.20 CBOE a more attractive marketplace for submission, all subsequent
The Exchange believes the proposed market participants at other exchanges, amendments, all written statements
inclusion of MXEA and MXEF in the such market participants are welcome to with respect to the proposed rule
qualifying volume is equitable and not become CBOE market participants. change that are filed with the
unfairly discriminatory because it will Commission, and all written
apply to all Clearing Trading Permit C. Self-Regulatory Organization’s
Statement on Comments on the communications relating to the
Holder Proprietary MXEA and MXEF proposed rule change between the
orders Proposed Rule Change Received From
Members, Participants, or Others Commission and any person, other than
Finally, excepting MXEA and MXEF
those that may be withheld from the
from the Marketing Fee, VIP, and the The Exchange neither solicited nor public in accordance with the
ORS and CORS Programs is reasonable received comments on the proposed provisions of 5 U.S.C. 552, will be
because other proprietary index rule change. available for Web site viewing and
products (e.g., DJX and XSP) are also
III. Date of Effectiveness of the printing in the Commission’s Public
excepted from these fees and
Proposed Rule Change and Timing for Reference Room, 100 F Street NE.,
programs.21 It seems equitable to except
Commission Action Washington, DC 20549 on official
MXEA and MXEF from items on the
Fees Schedule from which other business days between the hours of
The foregoing rule change has become 10:00 a.m. and 3:00 p.m. Copies of the
proprietary index products are also effective pursuant to Section 19(b)(3)(A)
excepted. Similarly, the Exchange filing also will be available for
of the Act 23 and paragraph (f) of Rule inspection and copying at the principal
believes it’s reasonable to exclude 19b–4 24 thereunder. At any time within
MXEA and MXEF from the calculation office of the Exchange. All comments
60 days of the filing of the proposed rule received will be posted without change;
of the qualifying volume for the Floor change, the Commission summarily may
Broker Trading Permit Fees rebate the Commission does not edit personal
temporarily suspend such rule change if identifying information from
because other proprietary index it appears to the Commission that such
products such as DJX and XSP are also submissions. You should submit only
action is necessary or appropriate in the information that you wish to make
excluded.22 The Exchange also believes public interest, for the protection of
the proposed exclusion of MXEA and available publicly. All submissions
investors, or otherwise in furtherance of should refer to File Number SR–CBOE-
MXEF from the qualifying calculation is the purposes of the Act. If the
equitable and not unfairly 2015–041 and should be submitted on
Commission takes such action, the or before May 27, 2015.
discriminatory because the exclusion Commission will institute proceedings
will apply to all MXEA and MXEF to determine whether the proposed rule For the Commission, by the Division of
orders. change should be approved or Trading and Markets, pursuant to delegated
authority.25
B. Self-Regulatory Organization’s disapproved.
Brent J. Fields,
Statement on Burden on Competition IV. Solicitation of Comments Secretary.
The Exchange does not believe that Interested persons are invited to [FR Doc. 2015–10505 Filed 5–5–15; 8:45 am]
the proposed rule changes will impose submit written data, views, and BILLING CODE 8011–01–P
any burden on competition that are not arguments concerning the foregoing,
necessary or appropriate in furtherance including whether the proposed rule
of the purposes of the Act. The change is consistent with the Act. SECURITIES AND EXCHANGE
Exchange does not believe that the Comments may be submitted by any of COMMISSION
proposed rule change will impose any the following methods:
burden on intramarket competition that [Release No. 34–74853; File No. SR–OCC–
Electronic comments 2015–006]
is not necessary or appropriate in
furtherance of the purposes of the Act • Use the Commission’s Internet Self-Regulatory Organizations; The
because, while different fees are comment form (http://www.sec.gov/ Options Clearing Corporation; Order
assessed to different market participants rules/sro.shtml); or Approving Proposed Rule Change
in some circumstances, these different • Send an email to rule-comments@ Concerning the Provision of Clearance
market participants have different sec.gov. Please include File Number SR– and Settlement Services for Energy
obligations and different circumstances CBOE–2015–041 on the subject line. Futures and Options on Energy
tkelley on DSK3SPTVN1PROD with NOTICES
20 See CBOE Fees Schedule, CBOE Proprietary Paper comments Futures
Products Sliding Scale.
21 See CBOE Fees Schedule, Volume Incentive
• Send paper comments in triplicate April 30, 2015.
Program, Marketing Fee, Footnote 6 and Order to Secretary, Securities and Exchange On March 2, 2015, The Options
Router Subsidy Program and Complex Order Clearing Corporation (‘‘OCC’’) filed with
Subsidy Program, Footnotes 29 and 30. 23 15 U.S.C. 78s(b)(3)(A).
22 See CBOE Fees Schedule, Footnote 25. 24 17 CFR 240.19b–4(f). 25 17 CFR 200.30–3(a)(12).
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Document Created: 2015-12-16 07:40:45
Document Modified: 2015-12-16 07:40:45
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 26124 |
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