82 FR 18679 - 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 82, Issue 75 (April 20, 2017)

[Federal Register Volume 82, Number 75 (Thursday, April 20, 2017)]
[Notices]
[Pages 18679-18680]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-07954]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80462; File No. SR-CBOE-2017-033]


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 14, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on April 10, 2017, Chicago Board Options Exchange, Incorporated 
(the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange 
Commission (the ``Commission'') the proposed rule change as described 
in Items I, II, and III below, which Items have been prepared by the 
Exchange. The Commission is publishing this notice to solicit comments 
on the proposed rule change from interested persons.
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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 Substance 
of the Proposed Rule Change

    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

1. Purpose

    The Exchange proposes to amend its Fees Schedule with respect to 
the Frequent Trader program.\3\ By way of background, the Frequent 
Trader Program offers transaction fee rebates to registered Customers, 
Professional Customers and Voluntary Professionals (origin codes ``C'' 
and ``W'') (collectively ``Customers'') that meet certain volume 
thresholds in CBOE VIX Volatility Index options (``VIX options''), 
Russell 2000 Index (``RUT'') options, and S&P 500 Index options 
(``SPX''), weekly S&P 500 options (``SPXW'') and p.m.-settled SPX Index 
options (``SPXpm'') (collectively referred to as ``SPX options'') 
provided the Customer registers for the program. The Exchange proposes 
to amend the Frequent Trader Program to increase the (i) volume 
thresholds and (ii) rebates for VIX options. Specifically, the proposed 
changes will be as follows:
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    \3\ The Exchange initially filed the proposed fee change on 
April 3, 2017 (SR-CBOE-2017-027). On April 10, 2017, the Exchange 
withdrew that filing and submitted this filing.

                                                       VIX
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                                              Monthly contracts traded                      Fee rebate
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               Tier                                                                   Current        Proposed
                                           Current                Proposed           (percent)       (percent)
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1.................................  10,000-49,000........  10,000-99,999........               3               5
2.................................  50,000-99,000........  100,000-299,999......               6              15
3.................................  100,000 and above....  300,000 and above....               9              25
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[[Page 18680]]

    The Exchange believes the proposed changes incentivizes the sending 
of Customer orders to the Exchange while maintaining an incremental 
incentive for Customers to strive for the highest tier level.

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.\4\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \5\ requirements that the rules of an exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transactions in securities, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest. The Exchange 
also believes the proposed rule change is consistent with Section 
6(b)(4) of the Act,\6\ 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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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes it's reasonable to increase the Frequent 
Trader rebates for VIX because it provides Customers an opportunity to 
receive increased rebates for reaching certain qualifying volume 
thresholds that they would not otherwise receive. The proposed rule 
change is designed to encourage greater Customer VIX options trading, 
which, along with bringing greater VIX options trading opportunities to 
all market participants, would bring in more fees to the Exchange, and 
such fees can be used to recoup the Exchange's costs and expenditures 
from maintaining VIX options. The Exchange believes it's also 
reasonable to increase the qualifying volume thresholds for VIX as it 
still allows the Exchange to maintain an incremental incentive for 
Customers to strive for the highest tier level and because the Exchange 
has increased the rebates for each of the tiers. The Exchange believes 
it's equitable and not unfairly discriminatory to establish higher 
rebates under the Frequent Trader Program for VIX as compared to SPX 
and RUT options because the Exchange would like to encourage more VIX 
trading. The Exchange believes that the proposed change is not unfairly 
discriminatory because it will apply to all Frequent Trader Customers.

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

    CBOE does not believe that the proposed rule change will impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act because, while the rebates apply 
only to Customers, the proposed change is designed to encourage 
increased Customer VIX options volume, which provides greater trading 
opportunities for all market participants. The Exchange believes that 
the proposed rule change will not cause an unnecessary burden on 
intermarket competition because VIX is only traded on CBOE. To the 
extent that the proposed changes make CBOE a more attractive 
marketplace for market participants at other exchanges, such market 
participants are welcome to become CBOE market participants.

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

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

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \7\ and paragraph (f) of Rule 19b-4 \8\ 
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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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 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-2017-033 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-2017-033. 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-2017-033 and should be 
submitted on or before May 11, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2017-07954 Filed 4-19-17; 8:45 am]
 BILLING CODE 8011-01-P