82_FR_8492 82 FR 8477 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule

82 FR 8477 - 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 15 (January 25, 2017)

Page Range8477-8479
FR Document2017-01604

Federal Register, Volume 82 Issue 15 (Wednesday, January 25, 2017)
[Federal Register Volume 82, Number 15 (Wednesday, January 25, 2017)]
[Notices]
[Pages 8477-8479]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-01604]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79816; File No. SR-CBOE-2017-003]


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

January 18, 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 January 3, 2017, Chicago Board Options Exchange, Incorporated 
(the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange 
Commission (the ``Commission'') the proposed rule change as described 
in Items I, II, and III below, which Items have been prepared by the 
Exchange. The Commission is publishing this notice to solicit comments 
on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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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 also 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 make a number of amendments to its Order 
Routing Subsidy (ORS) and Complex Order Routing Subsidy (CORS) Programs 
(collectively ``Programs''). By way of background, the ORS and CORS 
Programs allow CBOE to enter into subsidy arrangements with any CBOE 
Trading Permit Holder (``TPH'') (each, a ``Participating TPH'') or Non-
CBOE TPH broker-dealer (each a ``Participating Non-CBOE TPH'') that 
meet certain criteria and provide certain order routing functionalities 
to other CBOE TPHs, Non-CBOE TPHs and/or use such functionalities 
themselves.\3\ (The term ``Participant'' as used in this filing refers 
to either a Participating TPH or a Participating Non-CBOE TPH). 
Participants in the ORS Program receive a payment from CBOE for every 
executed contract for simple orders routed to CBOE through their 
system. CBOE does not make payments under the ORS Program with respect 
to executed contracts in single-listed options classes traded on CBOE, 
or with respect to complex orders or spread orders. Similarly, 
participants in the CORS Program receive a payment from CBOE for every 
executed contract for complex orders routed to CBOE through their 
system. CBOE does not make payments under the CORS Program with respect 
to executed contracts in single-listed options classes traded on CBOE 
or with respect to simple orders. Currently, under both programs the 
Exchange pays a subsidy of $0.02 per contract for all customer (origin 
code ``C'') orders and a subsidy of $0.06 per contract for all non-
customer orders.
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    \3\ See CBOE Fees Schedule, ``Order Router Subsidy Program'' and 
``Complex Order Router Subsidy Program'' tables for more details on 
the ORS and CORS Programs.
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    The Exchange first proposes to exclude customer orders from the 
Programs and eliminate the customer order subsidy. The Exchange also 
proposes to increase the subsidy for non-customer orders from $0.06 per 
contract to $0.07 per contract under both ORS and CORS. The Exchange 
notes that another Exchange with a similar subsidy program also does 
not provide subsidies for customer orders.\4\
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    \4\ See NASDAQ PHLX LLC Pricing Schedule, Section IV(e) [sic], 
Other Transaction Fees, Market Access and Routing Subsidy 
(``MARS'').

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[[Page 8478]]

    The Exchange next proposes to amend one of the system requirements 
under the Programs. Specifically, the Exchange notes that to qualify 
for the subsidy arrangement under ORS and CORS, a Participant's order 
routing functionality has to, among other things, cause CBOE to be the 
default destination exchange for simple (under ORS) and complex (under 
CORS) orders, but allow any user to manually override CBOE as the 
default destination on an order-by-order basis. As the Exchange is 
proposing to eliminate subsidies for customer orders, the Exchange does 
not believe it's necessary to require that CBOE be set as the default 
destination exchange for customer orders. As such, the Exchange 
proposes to amend the Fees Schedule to provide that under the ORS and 
CORS programs, CBOE must be set as the default exchange for non-
customer orders only (and still allow any user to manually override 
CBOE as the default destination on an order-by-order basis).
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 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,\7\ 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.
---------------------------------------------------------------------------

    \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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    In particular, the Exchange believes the proposed amendments to the 
ORS and CORS Programs are reasonable because the proposed changes still 
affords Participants an opportunity to receive payments to subsidize 
the costs associated with providing certain order routing 
functionalities that would otherwise go unsubsidized. Additionally, the 
Exchange believes the increased $0.07 per contract subsidy for non-
customer orders is reasonable because it is within the range of 
subsidies paid by another exchange under a similar subsidy program.\8\ 
The Exchange also believes it is reasonable, equitable and not unfairly 
discriminatory to maintain a subsidy for non-customer orders only under 
the Programs. Particularly, the Exchange notes that customer orders 
already have the opportunity to earn various rebates, discounts or fee 
caps.\9\ Moreover, the Exchange notes that another exchange also does 
not provide subsidies for customer orders.\10\
---------------------------------------------------------------------------

    \8\ See supra note 4.
    \9\ See e.g., CBOE Fees Schedule, Customer Large Trade Discount 
and Volume Incentive Program.
    \10\ See supra note 4.
---------------------------------------------------------------------------

    The Exchange believes the elimination of the requirement to set 
CBOE as the default destination for customer orders is reasonable, 
equitable and not unfairly discriminatory because the Exchange will no 
longer be providing a subsidy for such orders.

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. The Exchange does not believe 
that the proposed changes will impose an unnecessary burden on 
intramarket competition because they will apply equally to all 
participating parties. Although the subsidy for orders routed to CBOE 
through a Participant's system only applies to Participants of the 
Programs, the subsidies are designed to encourage the sending of more 
orders to the Exchange, which should provide greater liquidity and 
trading opportunities for all market participants. Additionally, 
although customer orders will no longer be eligible for subsidies under 
the programs, customer orders are eligible for other rebates, discounts 
or fee caps.\11\ The Exchange also does not believe that such changes 
will impose any burden on intermarket competition that is not necessary 
or appropriate in furtherance of the purposes of the Act. The Exchange 
notes that, should the proposed changes make CBOE more attractive for 
trading, market participants trading on other exchanges can always 
elect to provide order routing functionality to CBOE. Additionally, to 
the extent that the proposed changes to the ORS and CORS Programs 
result in increased trading volume on CBOE and lessened volume on other 
exchanges, the Exchange notes that market participants trading on other 
exchanges can always elect to become TPHs on CBOE to take advantage of 
the trading opportunities.
---------------------------------------------------------------------------

    \11\ See e.g., CBOE Fees Schedule, Customer Large Trade Discount 
and Volume Incentive Program.
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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 \12\ and paragraph (f) of Rule 19b-4 \13\ 
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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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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-2017-003 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-2017-003. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your

[[Page 8479]]

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-2017-003 and should be submitted on or before 
February 15, 2017.
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    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-01604 Filed 1-24-17; 8:45 am]
 BILLING CODE 8011-01-P



                                                                             Federal Register / Vol. 82, No. 15 / Wednesday, January 25, 2017 / Notices                                                        8477

                                                  exists an active and liquid market                        For the Commission, by the Division of                the most significant aspects of such
                                                  functioning on the Exchange outside of                  Trading and Markets, pursuant to delegated              statements.
                                                  the Auction.34 The Commission further                   authority.38
                                                                                                          Eduardo A. Aleman,                                      A. Self-Regulatory Organization’s
                                                  believes that the proposed revisions to                                                                         Statement of the Purpose of, and
                                                  the eligibility requirements for orders of              Assistant Secretary.
                                                                                                                                                                  Statutory Basis for, the Proposed Rule
                                                  fewer than 50 contracts with respect to                 [FR Doc. 2017–01618 Filed 1–24–17; 8:45 am]
                                                                                                                                                                  Change
                                                  circumstances when the NBBO is no                       BILLING CODE 8011–01–P
                                                  more than $0.01 wide should help to                                                                             1. Purpose
                                                  enhance the operation of the Auction by                                                                            The Exchange proposes to make a
                                                  providing meaningful opportunities for                  SECURITIES AND EXCHANGE
                                                                                                                                                                  number of amendments to its Order
                                                                                                          COMMISSION
                                                  price improvement in such                                                                                       Routing Subsidy (ORS) and Complex
                                                  circumstances, and should benefit                                                                               Order Routing Subsidy (CORS)
                                                                                                          [Release No. 34–79816; File No. SR–CBOE–                Programs (collectively ‘‘Programs’’). By
                                                  investors and others in a manner that is                2017–003]
                                                  consistent with the Act.                                                                                        way of background, the ORS and CORS
                                                     The Commission further notes that, as                Self-Regulatory Organizations;                          Programs allow CBOE to enter into
                                                                                                          Chicago Board Options Exchange,                         subsidy arrangements with any CBOE
                                                  discussed more fully above, ISE Gemini
                                                                                                          Incorporated; Notice of Filing and                      Trading Permit Holder (‘‘TPH’’) (each, a
                                                  is initially proposing to implement is
                                                                                                          Immediate Effectiveness of a Proposed                   ‘‘Participating TPH’’) or Non-CBOE TPH
                                                  price improvement requirement for                                                                               broker-dealer (each a ‘‘Participating
                                                  Agency Orders of fewer than 50 option                   Rule Change To Amend the Fees
                                                                                                          Schedule                                                Non-CBOE TPH’’) that meet certain
                                                  contracts where the difference in the                                                                           criteria and provide certain order
                                                  NBBO is $0.01 with a member conduct                     January 18, 2017.                                       routing functionalities to other CBOE
                                                  standard.35 As described in greater                        Pursuant to Section 19(b)(1) of the                  TPHs, Non-CBOE TPHs and/or use such
                                                  detail above, ISE Gemini proposes to                    Securities Exchange Act of 1934 (the                    functionalities themselves.3 (The term
                                                  enforce this requirement under ISE Rule                 ‘‘Act’’),1 and Rule 19b–4 thereunder,2                  ‘‘Participant’’ as used in this filing refers
                                                  1614(d)(4). The Commission believes                     notice is hereby given that on January 3,               to either a Participating TPH or a
                                                  that ISE Gemini’s proposed member                       2017, Chicago Board Options Exchange,                   Participating Non-CBOE TPH).
                                                  conduct standard and ISE Rule                           Incorporated (the ‘‘Exchange’’ or                       Participants in the ORS Program receive
                                                  1614(d)(4) are reasonable means to                      ‘‘CBOE’’) filed with the Securities and                 a payment from CBOE for every
                                                  implement the price improvement                         Exchange Commission (the                                executed contract for simple orders
                                                  requirement until implementation of its                 ‘‘Commission’’) the proposed rule                       routed to CBOE through their system.
                                                  proposed systems-based mechanism for                    change as described in Items I, II, and                 CBOE does not make payments under
                                                  this requirement, which will become                     III below, which Items have been                        the ORS Program with respect to
                                                  effective following the migration of a                  prepared by the Exchange. The                           executed contracts in single-listed
                                                  symbol to INET, the platform operated                   Commission is publishing this notice to                 options classes traded on CBOE, or with
                                                  by Nasdaq, Inc. that will also operate                  solicit comments on the proposed rule                   respect to complex orders or spread
                                                  the PIM. The Commission further notes                   change from interested persons.                         orders. Similarly, participants in the
                                                  that the Exchange has represented that                                                                          CORS Program receive a payment from
                                                                                                          I. Self-Regulatory Organization’s
                                                  its proposed member conduct standard                                                                            CBOE for every executed contract for
                                                                                                          Statement of the Terms of Substance of
                                                  will be effective until the migration of                                                                        complex orders routed to CBOE through
                                                                                                          the Proposed Rule Change
                                                  all symbols to the INET platform, which                                                                         their system. CBOE does not make
                                                                                                            The Exchange proposes to amend its                    payments under the CORS Program with
                                                  shall be no later than April 15, 2017.36                Fees Schedule. The text of the proposed                 respect to executed contracts in single-
                                                     Thus, the Commission has                             rule change is also available on the                    listed options classes traded on CBOE or
                                                  determined to approve the Exchange’s                    Exchange’s Web site (http://                            with respect to simple orders. Currently,
                                                  proposed revisions to ISE Gemini Rule                   www.cboe.com/AboutCBOE/                                 under both programs the Exchange pays
                                                  723(b) and Supplementary Material .03                   CBOELegalRegulatoryHome.aspx), at                       a subsidy of $0.02 per contract for all
                                                  and .05 to ISE Gemini Rule 723, and to                  the Exchange’s Office of the Secretary,                 customer (origin code ‘‘C’’) orders and a
                                                  approve the Pilot, as proposed to be                    and at the Commission’s Public                          subsidy of $0.06 per contract for all non-
                                                  modified, on a permanent basis.                         Reference Room.                                         customer orders.
                                                                                                          II. Self-Regulatory Organization’s                         The Exchange first proposes to
                                                  IV. Conclusion                                                                                                  exclude customer orders from the
                                                                                                          Statement of the Purpose of, and
                                                    It is therefore ordered, pursuant to                  Statutory Basis for, the Proposed Rule                  Programs and eliminate the customer
                                                  Section 19(b)(2) of the Act,37 that the                 Change                                                  order subsidy. The Exchange also
                                                  proposed rule change (SR–ISEGemini–                                                                             proposes to increase the subsidy for
                                                                                                            In its filing with the Commission, the                non-customer orders from $0.06 per
                                                  2016–23), be and hereby is approved.                    Exchange included statements                            contract to $0.07 per contract under
                                                                                                          concerning the purpose of and basis for                 both ORS and CORS. The Exchange
                                                                                                          the proposed rule change and discussed                  notes that another Exchange with a
                                                    34 See  Exhibit 3 to SR–ISEGemini–2016–23.            any comments it received on the                         similar subsidy program also does not
                                                    35 The  Exchange stated that it will conduct          proposed rule change. The text of these
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                                                  electronic surveillance of the PIM to ensure that                                                               provide subsidies for customer orders.4
                                                  members comply with the proposed price
                                                                                                          statements may be examined at the
                                                  improvement requirements for option orders of           places specified in Item IV below. The                    3 See CBOE Fees Schedule, ‘‘Order Router

                                                  fewer than 50 contracts. See Notice, supra note 3,      Exchange has prepared summaries, set                    Subsidy Program’’ and ‘‘Complex Order Router
                                                                                                          forth in sections A, B, and C below, of                 Subsidy Program’’ tables for more details on the
                                                  at 91275–76.
                                                                                                                                                                  ORS and CORS Programs.
                                                     36 See Notice, supra note 3, at 91275 & n.7.
                                                                                                                                                                    4 See NASDAQ PHLX LLC Pricing Schedule,
                                                     37 15 U.S.C. 78s(b)(2).                                1 15   U.S.C. 78s(b)(1).                              Section IV(e) [sic], Other Transaction Fees, Market
                                                     38 17 CFR 200.30–3(a)(12).                             2 17   CFR 240.19b–4.                                 Access and Routing Subsidy (‘‘MARS’’).



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                                                  8478                        Federal Register / Vol. 82, No. 15 / Wednesday, January 25, 2017 / Notices

                                                     The Exchange next proposes to amend                   routing functionalities that would                     Additionally, to the extent that the
                                                  one of the system requirements under                     otherwise go unsubsidized.                             proposed changes to the ORS and CORS
                                                  the Programs. Specifically, the Exchange                 Additionally, the Exchange believes the                Programs result in increased trading
                                                  notes that to qualify for the subsidy                    increased $0.07 per contract subsidy for               volume on CBOE and lessened volume
                                                  arrangement under ORS and CORS, a                        non-customer orders is reasonable                      on other exchanges, the Exchange notes
                                                  Participant’s order routing functionality                because it is within the range of                      that market participants trading on other
                                                  has to, among other things, cause CBOE                   subsidies paid by another exchange                     exchanges can always elect to become
                                                  to be the default destination exchange                   under a similar subsidy program.8 The                  TPHs on CBOE to take advantage of the
                                                  for simple (under ORS) and complex                       Exchange also believes it is reasonable,               trading opportunities.
                                                  (under CORS) orders, but allow any user                  equitable and not unfairly
                                                  to manually override CBOE as the                         discriminatory to maintain a subsidy for               C. Self-Regulatory Organization’s
                                                  default destination on an order-by-order                 non-customer orders only under the                     Statement on Comments on the
                                                  basis. As the Exchange is proposing to                   Programs. Particularly, the Exchange                   Proposed Rule Change Received From
                                                  eliminate subsidies for customer orders,                 notes that customer orders already have                Members, Participants, or Others
                                                  the Exchange does not believe it’s                       the opportunity to earn various rebates,                 The Exchange neither solicited nor
                                                  necessary to require that CBOE be set as                 discounts or fee caps.9 Moreover, the                  received comments on the proposed
                                                  the default destination exchange for                     Exchange notes that another exchange                   rule change.
                                                  customer orders. As such, the Exchange                   also does not provide subsidies for
                                                                                                                                                                  III. Date of Effectiveness of the
                                                  proposes to amend the Fees Schedule to                   customer orders.10
                                                                                                              The Exchange believes the                           Proposed Rule Change and Timing for
                                                  provide that under the ORS and CORS
                                                                                                           elimination of the requirement to set                  Commission Action
                                                  programs, CBOE must be set as the
                                                  default exchange for non-customer                        CBOE as the default destination for                       The foregoing rule change has become
                                                  orders only (and still allow any user to                 customer orders is reasonable, equitable               effective pursuant to Section 19(b)(3)(A)
                                                  manually override CBOE as the default                    and not unfairly discriminatory because                of the Act 12 and paragraph (f) of Rule
                                                  destination on an order-by-order basis).                 the Exchange will no longer be                         19b–4 13 thereunder. At any time within
                                                                                                           providing a subsidy for such orders.                   60 days of the filing of the proposed rule
                                                  2. Statutory Basis
                                                                                                                                                                  change, the Commission summarily may
                                                     The Exchange believes the proposed                    B. Self-Regulatory Organization’s
                                                                                                           Statement on Burden on Competition                     temporarily suspend such rule change if
                                                  rule change is consistent with the                                                                              it appears to the Commission that such
                                                  Securities Exchange Act of 1934 (the                        CBOE does not believe that the                      action is necessary or appropriate in the
                                                  ‘‘Act’’) and the rules and regulations                   proposed rule change will impose any                   public interest, for the protection of
                                                  thereunder applicable to the Exchange                    burden on competition that is not                      investors, or otherwise in furtherance of
                                                  and, in particular, the requirements of                  necessary or appropriate in furtherance                the purposes of the Act. If the
                                                  Section 6(b) of the Act.5 Specifically,                  of the purposes of the Act. The                        Commission takes such action, the
                                                  the Exchange believes the proposed rule                  Exchange does not believe that the                     Commission will institute proceedings
                                                  change is consistent with the Section                    proposed changes will impose an                        to determine whether the proposed rule
                                                  6(b)(5) 6 requirements that the rules of                 unnecessary burden on intramarket                      change should be approved or
                                                  an exchange be designed to prevent                       competition because they will apply                    disapproved.
                                                  fraudulent and manipulative acts and                     equally to all participating parties.
                                                  practices, to promote just and equitable                 Although the subsidy for orders routed                 IV. Solicitation of Comments
                                                  principles of trade, to foster cooperation               to CBOE through a Participant’s system                   Interested persons are invited to
                                                  and coordination with persons engaged                    only applies to Participants of the                    submit written data, views, and
                                                  in regulating, clearing, settling,                       Programs, the subsidies are designed to                arguments concerning the foregoing,
                                                  processing information with respect to,                  encourage the sending of more orders to                including whether the proposed rule
                                                  and facilitating transactions in                         the Exchange, which should provide                     change is consistent with the Act.
                                                  securities, to remove impediments to                     greater liquidity and trading                          Comments may be submitted by any of
                                                  and perfect the mechanism of a free and                  opportunities for all market                           the following methods:
                                                  open market and a national market                        participants. Additionally, although
                                                                                                           customer orders will no longer be                      Electronic Comments
                                                  system, and, in general, to protect
                                                  investors and the public interest.                       eligible for subsidies under the                         • Use the Commission’s Internet
                                                  Additionally, the Exchange believes the                  programs, customer orders are eligible                 comment form (http://www.sec.gov/
                                                  proposed rule change is consistent with                  for other rebates, discounts or fee                    rules/sro.shtml); or
                                                  Section 6(b)(4) of the Act,7 which                       caps.11 The Exchange also does not                       • Send an email to rule-comments@
                                                  requires that Exchange rules provide for                 believe that such changes will impose                  sec.gov. Please include File Number SR–
                                                  the equitable allocation of reasonable                   any burden on intermarket competition                  CBOE–2017–003 on the subject line.
                                                  dues, fees, and other charges among its                  that is not necessary or appropriate in
                                                                                                           furtherance of the purposes of the Act.                Paper Comments
                                                  Trading Permit Holders and other
                                                  persons using its facilities.                            The Exchange notes that, should the                      • Send paper comments in triplicate
                                                     In particular, the Exchange believes                  proposed changes make CBOE more                        to Secretary, Securities and Exchange
                                                  the proposed amendments to the ORS                       attractive for trading, market                         Commission, 100 F Street NE.,
                                                  and CORS Programs are reasonable                         participants trading on other exchanges                Washington, DC 20549–1090.
                                                                                                           can always elect to provide order
mstockstill on DSK3G9T082PROD with NOTICES




                                                  because the proposed changes still                                                                              All submissions should refer to File
                                                  affords Participants an opportunity to                   routing functionality to CBOE.                         Number SR–CBOE–2017–003. This file
                                                  receive payments to subsidize the costs                                                                         number should be included on the
                                                                                                             8 See supra note 4.
                                                  associated with providing certain order                    9 See
                                                                                                                                                                  subject line if email is used. To help the
                                                                                                                   e.g., CBOE Fees Schedule, Customer Large
                                                                                                           Trade Discount and Volume Incentive Program.           Commission process and review your
                                                    5 15 U.S.C. 78f(b).                                      10 See supra note 4.
                                                    6 15 U.S.C. 78f(b)(5).                                   11 See e.g., CBOE Fees Schedule, Customer Large        12 15   U.S.C. 78s(b)(3)(A).
                                                    7 15 U.S.C. 78f(b)(4).                                 Trade Discount and Volume Incentive Program.             13 17   CFR 240.19b–4(f).



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                                                                             Federal Register / Vol. 82, No. 15 / Wednesday, January 25, 2017 / Notices                                                           8479

                                                  comments more efficiently, please use                   Items I and II below, which Items have                    and/or certification programs as may be
                                                  only one method. The Commission will                    been prepared by the Exchange. The                        required the Exchange.
                                                  post all comments on the Commission’s                   Commission is publishing this notice to                     The Exchange notes that the proposed
                                                  Internet Web site (http://www.sec.gov/                  solicit comments on the proposed rule                     rule change would harmonize the
                                                  rules/sro.shtml). Copies of the                         change from interested persons.                           Exchange’s MMAT examination
                                                  submission, all subsequent                                                                                        requirement with the MMAT
                                                  amendments, all written statements                      I. Self-Regulatory Organization’s                         examination requirements of other
                                                  with respect to the proposed rule                       Statement of the Terms of Substance of                    national securities exchanges that
                                                  change that are filed with the                          the Proposed Rule Change                                  require prospective MMATs (or
                                                  Commission, and all written                                CHX proposes to amend the Rules of                     equivalents) to successfully complete
                                                  communications relating to the                                                                                    the Series 57 Securities Trader
                                                                                                          the Exchange (‘‘CHX Rules’’) to modify
                                                  proposed rule change between the                                                                                  Examination.4
                                                                                                          the examination requirement for CHX
                                                  Commission and any person, other than
                                                                                                          Market Maker Authorized Traders                           Background
                                                  those that may be withheld from the
                                                                                                          (‘‘MMATs’’). The text of this proposed
                                                  public in accordance with the                                                                                        Current Article 16, Rule 3(b) provides
                                                  provisions of 5 U.S.C. 552, will be                     rule change is available on the
                                                                                                                                                                    the registration requirements for
                                                  available for Web site viewing and                      Exchange’s Web site at (www.chx.com)
                                                                                                                                                                    MMATs. Thereunder, current paragraph
                                                  printing in the Commission’s Public                     and in the Commission’s Public
                                                                                                                                                                    (b)(2) provides that to be eligible for
                                                  Reference Room, 100 F Street NE.,                       Reference Room.
                                                                                                                                                                    registration as an MMAT, a person must
                                                  Washington, DC 20549, on official                       II. Self-Regulatory Organization’s                        be registered with the Exchange as
                                                  business days between the hours of                      Statement of the Purpose of, and                          provided in Article 6 and complete any
                                                  10:00 a.m. and 3:00 p.m. Copies of the                  Statutory Basis for, the Proposed Rule                    other training and/or certification
                                                  filing also will be available for                       Change                                                    programs as may be required. Moreover,
                                                  inspection and copying at the principal                                                                           current paragraph .01(b) of the
                                                  office of the Exchange. All comments                      In its filing with the Commission, the                  Interpretations and Policies of Article 6,
                                                  received will be posted without change;                 CHX included statements concerning                        Rule 3 provides that prior to the
                                                  the Commission does not edit personal                   the purpose of and basis for the                          Exchange approving a Participant’s
                                                  identifying information from                            proposed rule changes [sic] and                           request to register an individual as an
                                                  submissions. You should submit only                     discussed any comments it received on                     MMAT, such individual must
                                                  information that you wish to make                       the proposed rule change. The text of                     successfully complete the Market Maker
                                                  available publicly. All submissions                     these statements may be examined at                       Authorized Trader Exam.
                                                  should refer to File Number SR–CBOE–                    the places specified in Item IV below.                       In order to further streamline and
                                                  2017–003 and should be submitted on                     The CHX has prepared summaries, set                       bring consistency to the qualification
                                                  or before February 15, 2017.                            forth in sections A, B and C below, of                    and registration requirements for
                                                    For the Commission, by the Division of                the most significant aspects of such                      MMATs (or equivalents) across different
                                                  Trading and Markets, pursuant to delegated              statements.                                               markets, the Exchange now proposes to
                                                  authority.14                                                                                                      eliminate the Market Maker Authorized
                                                  Eduardo A. Aleman,                                      A. Self-Regulatory Organization’s
                                                                                                                                                                    Trader Exam and instead require
                                                                                                          Statement of the Purpose of, and
                                                  Assistant Secretary.                                                                                              prospective MMATs to successfully
                                                                                                          Statutory Basis for, the Proposed Rule
                                                  [FR Doc. 2017–01604 Filed 1–24–17; 8:45 am]                                                                       complete the Series 57 Securities Trader
                                                                                                          Changes
                                                  BILLING CODE 8011–01–P                                                                                            Examination in order to satisfy the
                                                                                                          1. Purpose                                                Exchange’s MMAT examination
                                                                                                                                                                    requirement. To this end, the Exchange
                                                  SECURITIES AND EXCHANGE                                    The Exchange proposes to amend                         proposes to delete current paragraph
                                                  COMMISSION                                              CHX Rules to modify the examination                       .01(b) of the Interpretations and Policies
                                                                                                          requirement for CHX Market Maker                          of Article 6, Rule 3 in its entirety and
                                                  [Release No. 34–79822; File No. SR–CHX–
                                                                                                          Authorized Traders (‘‘MMATs’’).                           amend current Article 16, Rule 3(b)(2) to
                                                  2017–01]
                                                                                                          Specifically, the Exchange proposes to                    provide as follows:
                                                  Self-Regulatory Organizations;                          eliminate the requirement that
                                                                                                                                                                      To be eligible for registration as a MMAT,
                                                  Chicago Stock Exchange, Inc.; Notice                    prospective MMATs successfully                            a person must successfully complete the
                                                  of Filing and Immediate Effectiveness                   complete the CHX Market Maker                             Series 57 Securities Trader Examination and
                                                  of Proposed Rule Change To Modify                       Authorized Trader Exam, which is an                       any other training and/or certification
                                                  the Examination Requirement for CHX                     examination currently maintained and                      programs as may be required by the
                                                  Market Maker Authorized Traders                         administered by the Exchange for                          Exchange.
                                                                                                          prospective MMATs. In lieu of the CHX                     The Exchange does not propose to
                                                  January 18, 2017.                                       Market Maker Authorized Trader Exam,
                                                     Pursuant to Section 19(b)(1) of the                                                                            amend or modify any other
                                                                                                          the Exchange proposes to require                          requirements related to MMATs or
                                                  Securities Exchange Act of 1934                         prospective MMATs to successfully
                                                  (‘‘Act’’) 1, and Rule 19b–4 2 thereunder,                                                                         Market Makers in general.
                                                                                                          complete the Series 57 Securities Trader
                                                  notice is hereby given that on January 6,               Examination 3 and any other training                        4 See, e.g., NYSE Arca Equities Rule 7.21(b)(2).
                                                  2017 the Chicago Stock Exchange, Inc.
                                                                                                                                                                    Other markets do not explicitly recognize an
mstockstill on DSK3G9T082PROD with NOTICES




                                                  (‘‘CHX’’ or the ‘‘Exchange’’) filed with                   3 A Representative (as defined under CHX Article       MMAT registration category but require any person
                                                  the Securities and Exchange                             6, Rule 2(b)) that is engaged in securities trading       engaged in the purchase or sale of securities or
                                                  Commission (‘‘Commission’’) the                         activities, on either an agency or principal basis, for   other similar instruments for the account of a
                                                  proposed rule change as described in                    the Participant (as defined under CHX Article 1,          member organization, which would include market
                                                                                                          Rule 1(s)) with which the Representative is               maker traders, to be registered as a Securities Trader
                                                                                                          associated, must register with the Exchange as a          and pass the Series 57 Securities Trader
                                                    14 17 CFR 200.30–3(a)(12).                            Securities Trader and pass the Series 57 Securities       Examination. See e.g., paragraph .10 of the
                                                    1 15 U.S.C. 78s(b)(1).                                Trader Examination. See CHX Article 6, Rule               Supplementary Material under NYSE Rule 345; see
                                                    2 17 CFR 240.19b–4.                                   3(a)(1).                                                  also, e.g., NASDAQ PHLX Rule 613(f)(2).



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Document Created: 2017-01-25 00:08:59
Document Modified: 2017-01-25 00:08:59
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation82 FR 8477 

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