80 FR 72761 - 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 224 (November 20, 2015)

Page Range		72761-72763
FR Document		2015-29598
Federal Register, Volume 80 Issue 224 (Friday, November 20, 2015)
[Federal Register Volume 80, Number 224 (Friday, November 20, 2015)]
[Notices]
[Pages 72761-72763]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-29598]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76442; File No. SR-CBOE-2015-101]


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

November 16, 2015.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on November 2, 2015, Chicago Board Options Exchange, Incorporated 
(the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange 
Commission (the ``Commission'') the proposed rule change as described 
in Items I, II, and III below, which Items have been prepared by the 
Exchange. The Commission is publishing this notice to solicit comments 
on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend its Fees Schedule. The text of the 
proposed rule change is available on the Exchange's Web site (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 the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Fees Schedule, effective 
November 2, 2015. Specifically, the Exchange proposes to increase the 
Customer Priority Surcharge fee assessed to contracts executed in VIX 
volatility index options (``VIX options'') and weekly S&P 500 options 
(``SPXW options''). Currently, the VIX Customer Priority Surcharge 
(``VIX Surcharge'') is assessed on all Customer (C) VIX contracts 
executed electronically that are Maker and not Market Turner. 
Additionally, the VIX Surcharge is only assessed on such contracts that 
have a premium of $0.11 or greater. The Exchange proposes to increase 
the VIX Surcharge from $0.10 per contract to $0.20 per contract on such 
contracts that have a premium of $0.11 or greater. The SPXW Customer 
Priority Surcharge (``SPXW Surcharge'') is currently assessed on all 
Customer (C) SPXW contracts executed electronically.\3\ The Exchange 
also proposes to increase the SPXW Surcharge from $0.05 per contract to 
$0.10 per contract.
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    \3\ The SPXW Surcharge is not assessed to contracts executed by 
a floor broker using a PAR terminal or orders in SPXW options in 
SPXW electronic book that are executed during opening rotation on 
the final settlement day of VIX options and futures which have the 
expiration that contribute to the VIX settlement calculation.
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    The Exchange also proposes to amend the Fees Schedule with respect 
to the Qualified Contingent Cross (``QCC'') Orders Rate Table. By way 
of background, the Fees Schedule currently provides for a ``QCC Rate 
Table'' which sets forth a transaction fee and credit for QCC 
transactions. In addition, the ``Notes'' section of the QCC Rate Table 
includes the definition of a QCC transaction. Specifically the 
``Notes'' section currently provides that ``A QCC transaction is 
comprised of an `initiating order' to buy (sell) at least 1,000 
contracts, coupled with a contra-side order to sell (buy) an equal 
number of contracts . . .'' The Exchange notes that it recently amended 
its QCC rules to expand the availability of QCC orders by permitting 
multiple contra-parties on a QCC order.\4\ As such, the definition of 
QCC Orders in CBOE Rule 6.53 has been amended. The Exchange proposes to 
similarly amend the Fees Schedule to

[[Page 72762]]

incorporate this new definition to maintain consistency in the Rules 
and Fees Schedule and avoid potential confusion.
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    \4\ See Securities Exchange Act Release No. 75756 (August 25, 
2015), 80 FR 168 (August 31, 2015) (SR-CBOE-2015-073).
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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.\5\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
section 6(b)(5) \6\ requirements that the rules of an exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitation 
transactions in securities, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest. The Exchange 
also believes the proposed rule change is consistent with section 
6(b)(4) of the Act,\7\ which provides that Exchange rules may provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its Trading Permit Holders.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the SPXW and VIX Customer Priority 
Surcharge increases are reasonable because the amount of the new fees 
are within the range of surcharges assessed for customer transactions 
in other CBOE proprietary products (for example customers are currently 
assessed a $0.20 Hybrid 3.0 Execution Surcharge (which essentially acts 
as a customer priority surcharge) in SPX options).
    The Exchange believes that it is equitable and not unfairly 
discriminatory to assess the SPXW and VIX Priority Surcharges to 
Customers and not other market participants because Customers are not 
subject to additional costs for effecting transactions in SPXW and VIX 
which are applicable to other market participants, such as license 
surcharges. Additionally, Customers are not subject to fees applicable 
to other market participants such as connectivity fees and fees 
relating to Trading Permits, and are not subject to the same 
obligations as other market participants, including regulatory and 
compliance requirements and quoting obligations. The Exchange believes 
that it is equitable and not unfairly discriminatory to only assess the 
VIX Surcharge to Maker Non-Turners because the Exchange wants to 
encourage improving the market (``turning'').
    The Exchange believes that it is equitable and not unfairly 
discriminatory to only assess the VIX Surcharge when the contract 
premium is at least $0.11 because the Exchange wants to reduce costs on 
low priced VIX options to encourage Customers to close and roll over 
positions close to expiration at low premium levels. Currently, such 
Customers are less likely to do this because the transaction fee is 
closer to the premium level. The Exchange believes that maintaining 
lowered fees overall for VIX options trading with a premium of $0.00-
$0.10 will encourage the trading of such options. As such, the Exchange 
does not wish to assess the VIX Surcharge on such options in order to 
keep the costs low.
    Finally, the Exchange believes that codifying the amended 
definition of a QCC transaction in the Fees Schedule (in addition to 
the Exchange's Rules, where it is currently provided for), will 
alleviate potential confusion and maintain clarity in the Fees 
Schedule, which serves to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest.

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

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

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to section 
19(b)(3)(A) of the Act \8\ and paragraph (f) of Rule 19b-4 \9\ 
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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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-CBOE-2015-101 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-2015-101. 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

[[Page 72763]]

with respect to the proposed rule change that are filed with the 
Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for Web site viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE., Washington, 
DC 20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of such filing also will be available for inspection 
and copying at the principal offices 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-2015-101, and should be 
submitted on or before December 11, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-29598 Filed 11-19-15; 8:45 am]
BILLING CODE 8011-01-P
Federal Register / Vol. 80, No. 224 / Friday, November 20, 2015 / Notices 72763

with respect to the proposed rule I. Self-Regulatory Organization’s A. Self-Regulatory Organization’s
change that are filed with the Statement of the Terms of Substance of Statement of the Purpose of, and
Commission, and all written the Proposed Rule Change Statutory Basis for, the Proposed Rule
communications relating to the The Exchange proposes to amend the Change
proposed rule change between the Exchange’s transaction fees at Chapter 1. Purpose
Commission and any person, other than XV, Section 2 entitled ‘‘NASDAQ
those that may be withheld from the NOM proposes a new subsidy
Options Market—Fees and Rebates,’’
public in accordance with the program, MARS, which would pay a
which governs pricing for Nasdaq
provisions of 5 U.S.C. 552, will be subsidy to NOM Participants that
Participants using the NASDAQ Options
available for Web site viewing and provide certain order routing
Market (‘‘NOM’’), Nasdaq’s facility for
printing in the Commission’s Public functionalities to other NOM
executing and routing standardized
Reference Room, 100 F Street NE., Participants and/or use such
equity and index options. The Exchange
Washington, DC 20549 on official functionalities themselves. Generally,
proposes to create a subsidy program,
business days between the hours of under MARS, NOM proposes to make
the Market Access and Routing Subsidy
10:00 a.m. and 3:00 p.m. Copies of such payments to participating NOM
or ‘‘MARS,’’ for NOM Participants that
filing also will be available for Participants to subsidize their costs of
provide certain order routing
inspection and copying at the principal providing routing services to route
functionalities 3 to other NOM
offices of the Exchange. All comments orders to NOM. The Exchange believes
Participants and/or use such
received will be posted without change; that MARS will attract higher volumes
functionalities themselves.
the Commission does not edit personal The text of the proposed rule change of electronic equity and ETF options
identifying information from is available on the Exchange’s Web site volume to the Exchange from non-NOM
submissions. You should submit only at http://nasdaq.cchwallstreet.com, at Participants as well as NOM
information that you wish to make the principal office of the Exchange, and Participants.
available publicly. All submissions at the Commission’s Public Reference MARS System Eligibility
should refer to File Number SR–CBOE– Room. To qualify for MARS, a NOM
2015–101, and should be submitted on Participant’s routing system (hereinafter
II. Self-Regulatory Organization’s
or before December 11, 2015. ‘‘System’’) would be required to meet
Statement of the Purpose of, and
For the Commission, by the Division of Statutory Basis for, the Proposed Rule certain criteria. Specifically the
Trading and Markets, pursuant to delegated Change Participant’s System would be required
authority.10 to: (1) Enable the electronic routing of
Robert W. Errett,
In its filing with the Commission, the
Exchange included statements orders to all of the U.S. options
Deputy Secretary.
concerning the purpose of and basis for exchanges, including NOM; (2) provide
[FR Doc. 2015–29598 Filed 11–19–15; 8:45 am]
the proposed rule change and discussed current consolidated market data from
BILLING CODE 8011–01–P any comments it received on the the U.S. options exchanges; and (3) be
proposed rule change. The text of these capable of interfacing with NOM’s API
statements may be examined at the to access current NOM match engine
SECURITIES AND EXCHANGE places specified in Item IV below. The functionality. The NOM Participant’s
COMMISSION Exchange has prepared summaries, set System would also need to cause NOM
forth in sections A, B, and C below, of to be one of the top three default
[Release No. 34–76445; File No. SR– destination exchanges for individually
NASDAQ–2015–133] the most significant aspects of such
statements. executed marketable orders if NOM is at
Self-Regulatory Organizations; The the national best bid or offer (‘‘NBBO’’),
NASDAQ Stock Market LLC; Notice of 3 The order routing functionalities permit a NOM regardless of size or time, but allow any
Filing and Immediate Effectiveness of Participant to provide access and connectivity to user to manually override NOM as the
Proposed Rule Change To Create a other Participants as well utilize such access for default destination on an order-by-order
themselves. The Exchange notes that under this basis.
Market Access and Routing Subsidy or arrangement it will be possible for one NOM The Exchange would require NOM
‘‘MARS’’ Participant to be eligible for payments under
MARS, while another NOM Participant might Participants desiring to participate in
November 16, 2015. potentially be liable for transaction charges MARS 4 to complete a form, in a manner
Pursuant to Section 19(b)(1) of the associated with the execution of the order, because prescribed by the Exchange, and
those orders were delivered to the Exchange reaffirm their information on a quarterly
Securities Exchange Act of 1934 through a NOM Participant’s connection to the
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 Exchange and that Participant qualified for the basis to the Exchange. Any NOM
notice is hereby given that, on MARS Payment. Consider the following example: Participant would be permitted to apply
both Participants A and B are NOM Participants but for MARS, provided the above-
November 2, 2015, The NASDAQ Stock A does not utilize its own connections to route
Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) orders to the Exchange, and instead utilizes B’s
referenced requirements are met,
filed with the Securities and Exchange connections. Under this program, B will be eligible
4 For example, a NOM Participant that desires to
Commission (‘‘SEC’’ or ‘‘Commission’’) for the MARS Payment while A is liable for any
transaction charges resulting from the execution of qualify for MARS in November must complete the
the proposed rule change as described orders that originate from A, arrive at the Exchange form and submit it to the Exchange no later than
in Items I, II, and III below, which Items via B’s connectivity, and subsequently execute and the last business day of November. Such form will
have been prepared by the Exchange. clear at The Options Clearing Corporation or require the NOM Participant to identify the NOM
The Commission is publishing this ‘‘OCC,’’ where A is the valid executing clearing Participant seeking the MARS Payment and must
Participant or give-up on the transaction. Similarly, list, among other things, the connections utilized by
tkelley on DSK3SPTVN1PROD with NOTICES

notice to solicit comments on the where B utilizes its own connections to execute the NOM Participant to provide Exchange access to
proposed rule change from interested transactions, B will be eligible for the MARS other NOM Participants and/or itself. MARS
persons. Payment, but would also be liable for any Payments would be made one month in arrears (i.e.,
transaction [sic] resulting from the execution of a MARS Payment earned for activity in November
orders that originate from B, arrive at the Exchange would be paid to the qualifying NOM Participant
10 17 CFR 200.30–3(a)(12). via B’s connectivity, and subsequently execute and in December), as is the case with all other
1 15 U.S.C. 78s(b)(1). clear at OCC, where B is the valid executing transactional payments and assessments made by
2 17 CFR 240.19b–4. clearing Participant or give-up on the transaction. the Exchange.

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Document Created: 2015-12-14 13:58:36
Document Modified: 2015-12-14 13:58:36
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 72761