82 FR 8883 - 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 19 (January 31, 2017)
Federal Register Volume 82, Issue 19 (January 31, 2017)
| Page Range | 8883-8886 | |
| FR Document | 2017-01999 |
[Federal Register Volume 82, Number 19 (Tuesday, January 31, 2017)] [Notices] [Pages 8883-8886] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-01999] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79873; File No SR-CBOE-2017-007] 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 25, 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 17, 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. --------------------------------------------------------------------------- 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 adopt a new Liquidity Provider Sliding Scale [[Page 8884]] Adjustment Table (``Adjustment Table'').\3\ By way of background, under the Liquidity Provider Sliding Scale (``LP Sliding Scale''), a Liquidity Provider's (CBOE Market-Makers, DPMs and LMMs) standard per- contract transaction fees for all products except Underlying Symbol List A \4\ and mini options are reduced based upon the Liquidity Provider (``LP'') reaching certain contract volume thresholds in a month.\5\ The Exchange proposes to adopt the Adjustment Table which would establish Taker fees to be applied to ``Taker'' volume and a Maker rebate that would be applied to ``Maker'' volume in addition to the transaction fees assessed under the LP Sliding Scale. The amount of the Taker fee (or Maker rebate) would be determined by the LP's percentage of volume from the previous month that was Maker (``Make Rate''). The proposed Performance Tiers (determined by the Make Rate), fees and rebate are as follows: --------------------------------------------------------------------------- \3\ The Exchange initially filed the proposed fee change on January 3, 2017 (SR-CBOE-2017-002). On January 17, 2017, the Exchange withdrew that filing and submitted this filing. \4\ As of January 3, 2017, Underlying Symbol List A includes Underlying Symbol List A consists of [sic] OEX, XEO, RUT, RLG, RLV, RUI, AWDE, FTEM, FXTM, UKXM SPX/SPXW, SPXpm, SRO, VIX, Volatility Indexes and binary options. \5\ See CBOE Fees Schedule, Liquidity Provider Sliding Scale. ---------------------------------------------------------------------------------------------------------------- Make rate Maker rebate Taker fee ------------------------------------------------------------------------------- Performance tier (% based on Non-penny Non-penny prior month) Penny classes classes Penny classes classes ---------------------------------------------------------------------------------------------------------------- 1............................... 0-50 ($0.00) ($0.00) $0.04 $0.08 2............................... 51-75 (0.00) (0.00) 0.03 0.06 3............................... 76-85 (0.00) (0.00) 0.02 0.04 4............................... 86-90 (0.00) (0.00) 0.01 0.02 5............................... 91-100 (0.01) (0.00) 0.00 0.00 ---------------------------------------------------------------------------------------------------------------- As indicated above, the adjustment to a LP's transaction fees will be determined by which Performance Tier a LP qualifies for, which is based on the LP's ``Make Rate.'' More specifically, the Make Rate is derived from an LP's electronic volume the previous month in all symbols excluding Underlying Symbol List A using the following formula: (i) The LP's total electronic automatic execution (``auto-ex'') Maker volume (i.e., volume resulting from that LP's resting quotes or single sided quotes/orders that were executed by an incoming order or quote), divided by (ii) the LP's total auto-ex volume (i.e., volume that resulted from the LP's resting quotes/orders and volume that resulted from that LP's quotes/orders that removed liquidity).\6\ The Exchange notes that (i) trades on the open, and (ii) complex orders \7\ will be excluded from Make Rate calculation. Additionally, as with the Liquidity Provider Sliding Scale, the Exchange will aggregate the trading activity of separate Liquidity Provider firms for purposes of the Adjustment Table if there is at least 75% common ownership between the firms as reflected on each firm's Form BD, Schedule A. The Exchange notes that the Performance Tiers are independent from the tier levels in the LP Sliding Scale (e.g., a LP that falls in Tier 3 of the LP Sliding Scale can fall in Performance Tier 4 of the Adjustment Table). The Exchange also notes once a LP's Make Rate has been determined for a given month, the corresponding Performance Tier will applicable for the next month only. For example, the Performance Tier rates that will be applied in February 2017 will be based on a LP's Make Rate volume from January 2017. Similarly, the Performance Tier that would apply for a Market-Maker in March 2017, would be based off the LP's Make Rate for February 2017 and so forth. --------------------------------------------------------------------------- \6\ For example, a Trading Permit Holder's electronic auto-ex Maker contract volume in December 2016 is 1,800,000 contracts and its total electronic auto-ex volume is 3,000,000 contracts, resulting in a Make Rate of 60% (Performance Tier 2). As such, the Trading Permit Holder's electronic Taker volume in January 2017 would be assessed $0.03 per contract for penny classes and $0.06 per contract for non-penny class volume. \7\ Simple, non-complex orders that execute against a complex order will not be excluded. --------------------------------------------------------------------------- The Exchange next proposes to establish the applicable Taker fees and Maker rebate set forth in the Performance Tiers for Penny and non- Penny classes. The Exchange proposes to apply these adjustments to a LP's electronic volume only, including auction responses, but excluding the following: (i) Trades on the open, (ii) Qualified Contingent Cross (``QCC'') orders, (iii) complex orders,\8\ and (iv) original paired orders executed via an auction mechanism. As noted above, the Taker fees set forth in the Adjustment Table would be applied to ``Taker'' volume. Taker volume under the Adjustment Table would include the following: (i) Volume resulting from a LP's orders and/or quotes removing other market participants' resting orders and/or quotes and (ii) volume resulting from a LP's primary orders in unpaired auctions (i.e., Hybrid Agency Liaison (``HAL'') and HAL on the Open (``HALO'')). The Exchange notes that Taker fees for Penny classes would be subject to a cap of $0.50 per contract, which includes the LP Sliding Scale transaction fee, Adjustment Table fee and Marketing Fee.\9\ The Maker rebate set forth in the Adjustment Table would be applied to ``Maker'' volume, defined for this purpose as the following: (i) Volume resulting from executions against a LP's resting orders and/or quotes and (ii) volume resulting from a LP's responses to auctions (i.e., Automated Improvement Mechanism (``AIM''), HAL, and/or HALO --------------------------------------------------------------------------- \8\ Simple, non-complex orders that execute against a complex order will not be excluded. \9\ For example, if an LP is assessed the Marketing Fee on a given transaction ($0.25 per contract) for which it was a Taker in a Penny class, and that LP falls in Tier 1 of the LP Sliding Scale ($0.23 per contract) and Performance Tier 1 of the Adjustment Table ($0.04 per contract), the LP would be assessed $0.50 per contract for the transaction, instead of $0.52 per contract. --------------------------------------------------------------------------- [[Page 8885]] responses).\10\ The Exchange notes that other Exchanges assess transactions fees based on whether volume is ``maker'' or ``taker''.\11\ The Exchange lastly proposes to make clear in the ``Notes'' section of the Affiliate Volume Program (``AVP'') table that the transaction fee credits under AVP do not apply to the LP Adjustment Table. --------------------------------------------------------------------------- \10\ For example, based on December 2016's volume, a LP's Performance Tier is Tier 2 for January 2017. In January 2017, the LP has the following breakdown of volume: 1,162,500 contracts from AIM responses in Penny Classes 2,000,000 contracts from electronic Maker activity in Penny Classes 1,000,000 contracts from electronic Maker activity in Non-Penny Classes 500,000 contracts from electronic Taker activity in Penny Classes 100,000 contracts from electronic Taker activity in Non-Penny Classes 200,000 contracts from responses to HAL in Penny Classes Per the proposed Adjustment Table, the LP would be assessed $0.03 per contract for the 500,000 Taker Penny contracts ($15,000) and $0.06 per contract for the 100,000 Taker non-Penny contracts ($6,000), resulting in an additional charge of $21,000. If based on December 2016's volume the LP had instead met Performance Tier 5, for January 2017, the LP would have been entitled to a rebate of $0.01 for its Penny Maker volume of 3,362,500 (1,162,500 AIM responses, 2,000,000 Maker auto-ex Penny contracts and 200,000 HAL responses) for a total rebate of $33,625. In this example, no additional fees would be assessed on the LP's Taker volume. \11\ See e.g., Miami International Securities Exchange LLC (``MIAX'') Options Fees Schedule, Section 1(a), Market Maker Transaction Fees. --------------------------------------------------------------------------- 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.\12\ Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \13\ 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,\14\ 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. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78f(b). \13\ 15 U.S.C. 78f(b)(5). \14\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- The Exchange believes that adopting the Adjustment Table is reasonable because the amount of LP transaction fees including the proposed Taker fees and Taker cap of $0.50 per contract are similar and in line with the amount assessed for similar transactions at other Exchanges.\15\ Additionally, the Adjustment Table provides LPs an opportunity to qualify for a rebate they would not otherwise receive. The Exchange also notes that other exchanges have established transaction fees for Market-Makers based on maker and taker activity.\16\ Additionally the proposed rule change is designed to encourage LPs to provide and post liquidity to the Exchange. The different tiers provide an incremental incentive for LPs to add, rather than take, liquidity. --------------------------------------------------------------------------- \15\ See e.g., International Securities Exchange (``ISE'') Schedule of Fees, Regular Order Fees and Rebates. See also, BOX Options Exchange Fees Schedule, Section I., Exchange Fees. \16\ Id. See also MIAX Options Fees Schedule, Section 1(a), Market Maker Transaction Fees. --------------------------------------------------------------------------- The Exchange believes that it is reasonable, equitable and not unfairly discriminatory to only assess an additional Taker fee to those transactions removing liquidity from the market (``Takers'') and not Maker volume because the Exchange wants to continue to encourage market participation and price improvement. The Exchange's proposal to charge LPs who remove more liquidity higher fees is equitable and not unfairly discriminatory as it is common practice among options exchanges to differentiate fees for adding liquidity and fees for removing liquidity as discussed above. The Exchange also believes it's equitable and not unfairly discriminatory to assess higher fees for non-Penny option classes than Penny option classes and provide a rebate only for Penny classes because Penny classes and Non-Penny classes offer different pricing, liquidity, spread and trading incentives. The spreads in Penny classes are tighter than those in Non-Penny classes (which trade in $0.05 increments). The wider spreads in non-Penny option classes allow for greater profit potential. Limiting the Adjustment Table to orders entered electronically is equitable and not unfairly discriminatory because the Exchange seeks to improve the quality of posted electronic markets. Additionally, the Exchange cannot discern whether an order is a Maker or Taker in open- outcry. The Exchange believes it's equitable and not unfairly discriminatory to exclude Trades on the Open because these transactions involve the matching of undisplayed pre-opening trading interest. As such, there is, in effect, no Maker or Taker activity occurring. The Exchange would also like to encourage users to submit pre-opening orders. This brings greater liquidity and trading opportunity, which benefits all market participants. Similarly, the Exchange believes it's equitable and not unfairly discriminatory to exclude the original paired orders entered into an auction mechanism because there is no Maker or Taker activity occurring with respect to the original paired order. The Exchange believes it's reasonable, equitable and not unfairly discriminatory to exclude complex orders from the Adjustment Table because complex orders are already subject to the Complex Surcharge. The Exchange believes it's reasonable, equitable and not unfairly discriminatory to exclude QCC orders from the Adjustment Table because QCC orders are also not subject to the Liquidity Provider Sliding Scale. Excluding auction responses from the Make Rate is equitable and not unfairly discriminatory because the Exchange wants to encourage improved resting liquidity. The Exchange notes however, that auction responses are included as Maker with respect to the potential Maker rebate, as it still wants to reward price improvement and using auction mechanisms. Lastly, the Exchange believes the proposed change is also equitable and not unfairly discriminatory because all similarly situated LPs are subject to the same fee structure. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule changes will impose any burden on competition that are not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed rule change will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because all similarly situated LPs are subject to the same fee structure. Additionally the proposed rule change is designed to encourage LPs to provide and post liquidity to the Exchange, which benefits all market participants. The Exchange does not believe that the proposed rule changes will impose any burden on intermarket competition [[Page 8886]] that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed change only affects trading on CBOE. To the extent that the proposed change makes 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 \17\ and paragraph (f) of Rule 19b-4 \18\ 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. --------------------------------------------------------------------------- \17\ 15 U.S.C. 78s(b)(3)(A). \18\ 17 CFR 240.19b-4(f). --------------------------------------------------------------------------- Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-CBOE-2017-007 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549. All submissions should refer to File Number SR-CBOE-2017-007. 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 such 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-2017-007 and should be submitted on or before February 21, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\19\ --------------------------------------------------------------------------- \19\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-01999 Filed 1-30-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 19 / Tuesday, January 31, 2017 / Notices 8883
regulations/information-collections- $1,250 times the number of participants. SECURITIES AND EXCHANGE
under-omb-review.html. They may also However, the rate is increased from COMMISSION
be obtained without charge by writing to $1,250 to $2,500 in certain cases
[Release No. 34–79873; File No SR–CBOE–
the Disclosure Division of the Office of involving commercial airline or airline 2017–007]
the General Counsel of PBGC, 1200 K catering service plans. The termination
Street NW., Washington, DC 20005, or premium is due on the 30th day of each Self-Regulatory Organizations;
by calling 202–326–4040 during normal of three consecutive 12-month periods. Chicago Board Options Exchange,
business hours. (TTY and TDD users The first 12-month period generally Incorporated; Notice of Filing and
may call the Federal relay service toll- begins shortly after the termination date Immediate Effectiveness of a Proposed
free at 800–877–8339 and ask to be or after the conclusion of bankruptcy Rule Change To Amend the Fees
connected to 202–326–4040.) proceedings in certain cases. Schedule
FOR FURTHER INFORMATION CONTACT: The termination premium and related
January 25, 2017.
Deborah C. Murphy, Assistant General information must be filed by a person
Counsel for Regulatory Affairs, Office of Pursuant to Section 19(b)(1) of the
liable for the termination premium. The
the General Counsel, Pension Benefit Securities Exchange Act of 1934 (the
persons liable for the termination
Guaranty Corporation, 1200 K Street ‘‘Act’’),1 and Rule 19b–4 thereunder,2
premium are contributing sponsors and
NW., Washington, DC 20005–4026, 202– notice is hereby given that on January
members of their controlled groups,
326–4400 ext.3451 or Murphy.Deborah@ 17, 2017, Chicago Board Options
determined on the day before the plan
Exchange, Incorporated (the ‘‘Exchange’’
pbgc.gov. (TTY and TDD users may call termination date. Interest on late
or ‘‘CBOE’’) filed with the Securities
the Federal relay service toll-free at termination premiums is charged at the
and Exchange Commission (the
800–877–8339 and ask to be connected rate imposed under section 6601(a) of
‘‘Commission’’) the proposed rule
to 202–326–4400 ext 3451.) the Internal Revenue Code,
change as described in Items I, II, and
SUPPLEMENTARY INFORMATION: The compounded daily, from the due date to III below, which Items have been
Pension Benefit Guaranty Corporation the payment date. Penalties based on prepared by the Exchange. The
(PBGC) administers the pension plan facts and circumstances may be assessed Commission is publishing this notice to
termination insurance program under both for failure to timely pay the solicit comments on the proposed rule
title IV of the Employee Retirement termination premium and for failure to change from interested persons.
Income Security Act of 1974 (ERISA). timely file required related information
Section 4006(a)(7) of ERISA provides for and may be waived in appropriate I. Self-Regulatory Organization’s
a ‘‘termination premium’’ (in addition to circumstances. A penalty for late Statement of the Terms of Substance of
the flat-rate and variable-rate premiums payment will not exceed the amount of the Proposed Rule Change
under section 4006(a)(3) and (8) of termination premium paid late. Section The Exchange proposes to amend its
ERISA) that is payable for three years 4007.10 of the premium payment Fees Schedule. The text of the proposed
following certain distress and regulation requires the retention of rule change is also available on the
involuntary plan terminations. PBGC’s records supporting or validating the Exchange’s Web site (http://
regulations on Premium Rates (29 CFR computation of premiums paid and www.cboe.com/AboutCBOE/
part 4006) and Payment of Premiums requires that the records be made CBOELegalRegulatoryHome.aspx), at
(29 CFR part 4007) implement the available to PBGC. the Exchange’s Office of the Secretary,
termination premium. Sections 4007.3 OMB has approved the termination and at the Commission’s Public
and 4007.13(b) of the premium payment premium collection of information Reference Room.
regulation require the filing of (Form T and instructions) under control II. Self-Regulatory Organization’s
termination premium information and number 1212–0064 through February Statement of the Purpose of, and
payments with PBGC. PBGC has 28, 2017. PBGC is requesting that OMB Statutory Basis for, the Proposed Rule
promulgated Form T and instructions extend approval of this collection of Change
for paying the termination premium. information for three years, without
In general, the termination premium changes. An agency may not conduct or In its filing with the Commission, the
applies where a single-employer plan sponsor, and a person is not required to Exchange included statements
terminates in a distress termination respond to, a collection of information concerning the purpose of and basis for
under ERISA section 4041(c) (unless unless it displays a currently valid OMB the proposed rule change and discussed
contributing sponsors and controlled control number. any comments it received on the
group members meet the bankruptcy proposed rule change. The text of these
PBGC estimates that it will each year
liquidation requirements of ERISA statements may be examined at the
receive an average of about 1 filing for
section 4041(c)(2)(B)(i)) or in an places specified in Item IV below. The
the first year a termination premium is
involuntary termination under ERISA Exchange has prepared summaries, set
due, 1 filing for the second year a
section 4042, and the termination date forth in sections A, B, and C below, of
termination premium is due, and 1
under section 4048 of ERISA is after the most significant aspects of such
filing for the third year a termination
2005. The termination premium does statements.
premium is due, from a total of about 3
not apply in certain cases where respondents. PBGC estimates that the A. Self-Regulatory Organization’s
termination occurs during a bankruptcy total annual burden of the collection of Statement of the Purpose of, and
proceeding filed before October 18,
asabaliauskas on DSK3SPTVN1PROD with NOTICES
information will be about 15 minutes Statutory Basis for, the Proposed Rule
2005. and $200. Change
The termination premium is payable
for three years. The same amount is Deborah Chase Murphy, 1. Purpose
payable each year. The amount of each Assistant General Counsel for Regulatory The Exchange proposes to adopt a
payment is based on the number of Affairs, Pension Benefit Guaranty new Liquidity Provider Sliding Scale
participants in the plan as of the day Corporation.
before the termination date. In general, [FR Doc. 2017–02018 Filed 1–30–17; 8:45 am] 1 15 U.S.C. 78s(b)(1).
the amount of each payment is equal to BILLING CODE 7709–02–P 2 17 CFR 240.19b–4.
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Adjustment Table (‘‘Adjustment Liquidity Provider (‘‘LP’’) reaching Scale. The amount of the Taker fee (or
Table’’).3 By way of background, under certain contract volume thresholds in a Maker rebate) would be determined by
the Liquidity Provider Sliding Scale month.5 The Exchange proposes to the LP’s percentage of volume from the
(‘‘LP Sliding Scale’’), a Liquidity adopt the Adjustment Table which previous month that was Maker (‘‘Make
Provider’s (CBOE Market-Makers, DPMs would establish Taker fees to be applied Rate’’). The proposed Performance Tiers
and LMMs) standard per-contract to ‘‘Taker’’ volume and a Maker rebate (determined by the Make Rate), fees and
transaction fees for all products except that would be applied to ‘‘Maker’’ rebate are as follows:
Underlying Symbol List A 4 and mini volume in addition to the transaction
options are reduced based upon the fees assessed under the LP Sliding
Make rate Maker rebate Taker fee
Performance tier (% based on Non-penny Non-penny
Penny classes Penny classes
prior month) classes classes
1 ........................................................................................... 0–50 ($0.00) ($0.00) $0.04 $0.08
2 ........................................................................................... 51–75 (0.00) (0.00) 0.03 0.06
3 ........................................................................................... 76–85 (0.00) (0.00) 0.02 0.04
4 ........................................................................................... 86–90 (0.00) (0.00) 0.01 0.02
5 ........................................................................................... 91–100 (0.01) (0.00) 0.00 0.00
As indicated above, the adjustment to BD, Schedule A. The Exchange notes orders, (iii) complex orders,8 and (iv)
a LP’s transaction fees will be that the Performance Tiers are original paired orders executed via an
determined by which Performance Tier independent from the tier levels in the auction mechanism. As noted above, the
a LP qualifies for, which is based on the LP Sliding Scale (e.g., a LP that falls in Taker fees set forth in the Adjustment
LP’s ‘‘Make Rate.’’ More specifically, the Tier 3 of the LP Sliding Scale can fall Table would be applied to ‘‘Taker’’
Make Rate is derived from an LP’s in Performance Tier 4 of the Adjustment volume. Taker volume under the
electronic volume the previous month Table). The Exchange also notes once a Adjustment Table would include the
in all symbols excluding Underlying LP’s Make Rate has been determined for following: (i) Volume resulting from a
Symbol List A using the following a given month, the corresponding LP’s orders and/or quotes removing
formula: (i) The LP’s total electronic Performance Tier will applicable for the other market participants’ resting orders
automatic execution (‘‘auto-ex’’) Maker next month only. For example, the and/or quotes and (ii) volume resulting
volume (i.e., volume resulting from that Performance Tier rates that will be from a LP’s primary orders in unpaired
LP’s resting quotes or single sided applied in February 2017 will be based auctions (i.e., Hybrid Agency Liaison
quotes/orders that were executed by an on a LP’s Make Rate volume from (‘‘HAL’’) and HAL on the Open
incoming order or quote), divided by (ii) January 2017. Similarly, the (‘‘HALO’’)). The Exchange notes that
the LP’s total auto-ex volume (i.e., Performance Tier that would apply for Taker fees for Penny classes would be
volume that resulted from the LP’s a Market-Maker in March 2017, would subject to a cap of $0.50 per contract,
resting quotes/orders and volume that be based off the LP’s Make Rate for which includes the LP Sliding Scale
resulted from that LP’s quotes/orders February 2017 and so forth. transaction fee, Adjustment Table fee
that removed liquidity).6 The Exchange The Exchange next proposes to and Marketing Fee.9 The Maker rebate
notes that (i) trades on the open, and (ii) establish the applicable Taker fees and set forth in the Adjustment Table would
complex orders 7 will be excluded from Maker rebate set forth in the be applied to ‘‘Maker’’ volume, defined
Make Rate calculation. Additionally, as Performance Tiers for Penny and non- for this purpose as the following: (i)
with the Liquidity Provider Sliding Penny classes. The Exchange proposes Volume resulting from executions
Scale, the Exchange will aggregate the to apply these adjustments to a LP’s against a LP’s resting orders and/or
trading activity of separate Liquidity electronic volume only, including quotes and (ii) volume resulting from a
Provider firms for purposes of the auction responses, but excluding the LP’s responses to auctions (i.e.,
Adjustment Table if there is at least following: (i) Trades on the open, (ii) Automated Improvement Mechanism
75% common ownership between the Qualified Contingent Cross (‘‘QCC’’) (‘‘AIM’’), HAL, and/or HALO
firms as reflected on each firm’s Form
3 The Exchange initially filed the proposed fee 6 For example, a Trading Permit Holder’s 8 Simple, non-complex orders that execute against
asabaliauskas on DSK3SPTVN1PROD with NOTICES
change on January 3, 2017 (SR–CBOE–2017–002). electronic auto-ex Maker contract volume in a complex order will not be excluded.
On January 17, 2017, the Exchange withdrew that December 2016 is 1,800,000 contracts and its total 9 For example, if an LP is assessed the Marketing
filing and submitted this filing. electronic auto-ex volume is 3,000,000 contracts,
Fee on a given transaction ($0.25 per contract) for
4 As of January 3, 2017, Underlying Symbol List resulting in a Make Rate of 60% (Performance Tier
which it was a Taker in a Penny class, and that LP
A includes Underlying Symbol List A consists of 2). As such, the Trading Permit Holder’s electronic
[sic] OEX, XEO, RUT, RLG, RLV, RUI, AWDE, Taker volume in January 2017 would be assessed falls in Tier 1 of the LP Sliding Scale ($0.23 per
FTEM, FXTM, UKXM SPX/SPXW, SPXpm, SRO, $0.03 per contract for penny classes and $0.06 per contract) and Performance Tier 1 of the Adjustment
VIX, Volatility Indexes and binary options. contract for non-penny class volume. Table ($0.04 per contract), the LP would be assessed
5 See CBOE Fees Schedule, Liquidity Provider 7 Simple, non-complex orders that execute against $0.50 per contract for the transaction, instead of
Sliding Scale. a complex order will not be excluded. $0.52 per contract.
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that is not necessary or appropriate in comments more efficiently, please use APPLICANTS: Causeway ETMF Trust (the
furtherance of the purposes of the Act only one method. The Commission will ‘‘Trust’’), Causeway Capital
because the proposed change only post all comments on the Commission’s Management LLC (the ‘‘Adviser’’) and
affects trading on CBOE. To the extent Internet Web site (http://www.sec.gov/ SEI Investments Distribution Co. (the
that the proposed change makes CBOE rules/sro.shtml). Copies of the ‘‘Distributor’’).
a more attractive marketplace for market submission, all subsequent SUMMARY OF APPLICATION: Applicants
participants at other exchanges, such amendments, all written statements request an order (‘‘Order’’) that permits:
market participants are welcome to with respect to the proposed rule (a) Actively managed series of certain
become CBOE market participants. change that are filed with the open-end management investment
Commission, and all written companies to issue shares (‘‘Shares’’)
C. Self-Regulatory Organization’s communications relating to the
Statement on Comments on the redeemable in large aggregations only
proposed rule change between the (‘‘Creation Units’’); (b) secondary market
Proposed Rule Change Received From Commission and any person, other than
Members, Participants, or Others transactions in Shares to occur at the
those that may be withheld from the next-determined net asset value plus or
The Exchange neither solicited nor public in accordance with the minus a market-determined premium or
received comments on the proposed provisions of 5 U.S.C. 552, will be discount that may vary during the
rule change. available for Web site viewing and trading day; (c) certain series to pay
printing in the Commission’s Public redemption proceeds, under certain
III. Date of Effectiveness of the
Reference Room, 100 F Street NE., circumstances, more than seven days
Proposed Rule Change and Timing for
Washington, DC 20549, on official from the tender of Shares for
Commission Action business days between the hours of redemption; (d) certain affiliated
The foregoing rule change has become 10:00 a.m. and 3:00 p.m. Copies of such persons of the series to deposit
effective pursuant to Section 19(b)(3)(A) filing also will be available for securities into, and receive securities
of the Act 17 and paragraph (f) of Rule inspection and copying at the principal from, the series in connection with the
19b–4 18 thereunder. At any time within office of the Exchange. All comments purchase and redemption of Creation
60 days of the filing of the proposed rule received will be posted without change; Units; (e) certain registered management
change, the Commission summarily may the Commission does not edit personal investment companies and unit
temporarily suspend such rule change if identifying information from investment trusts outside of the same
it appears to the Commission that such submissions. You should submit only group of investment companies as the
action is necessary or appropriate in the information that you wish to make series to acquire Shares; and (f) certain
public interest, for the protection of available publicly. All submissions series to create and redeem Shares in
investors, or otherwise in furtherance of should refer to File Number SR–CBOE– kind in a master-feeder structure. The
the purposes of the Act. If the 2017–007 and should be submitted on Order would incorporate by reference
Commission takes such action, the or before February 21, 2017. terms and conditions of a previous order
Commission will institute proceedings For the Commission, by the Division of granting the same relief sought by
to determine whether the proposed rule Trading and Markets, pursuant to delegated applicants, as that order may be
change should be approved or authority.19 amended from time to time (‘‘Reference
disapproved. Eduardo A. Aleman, Order’’).1
Solicitation of Comments Assistant Secretary. FILING DATE: The application was filed
[FR Doc. 2017–01999 Filed 1–30–17; 8:45 am] on December 28, 2016.
Interested persons are invited to
BILLING CODE 8011–01–P
submit written data, views, and HEARING OR NOTIFICATION OF HEARING:
arguments concerning the foregoing, An order granting the requested relief
including whether the proposed rule SECURITIES AND EXCHANGE will be issued unless the Commission
change is consistent with the Act. COMMISSION orders a hearing. Interested persons may
Comments may be submitted by any of request a hearing by writing to the
the following methods: [Investment Company Act Release No. Commission’s Secretary and serving
32435; 812–14729] applicants with a copy of the request,
Electronic Comments personally or by mail. Hearing requests
• Use the Commission’s Internet Causeway ETMF Trust, et al.; Notice of
should be received by the Commission
comment form (http://www.sec.gov/ Application
by 5:30 p.m. on February 21, 2017, and
rules/sro.shtml); or January 25, 2017. should be accompanied by proof of
• Send an email to rule-comments@ AGENCY: Securities and Exchange service on applicants, in the form of an
sec.gov. Please include File Number SR– Commission (‘‘Commission’’). affidavit or, for lawyers, a certificate of
CBOE–2017–007 on the subject line. ACTION: Notice of an application for an service. Pursuant to rule 0–5 under the
Paper Comments order under section 6(c) of the Act, hearing requests should state the
Investment Company Act of 1940 nature of the writer’s interest, any facts
• Send paper comments in triplicate bearing upon the desirability of a
(‘‘Act’’) for an exemption from sections
to Brent J. Fields, Secretary, Securities hearing on the matter, the reason for the
2(a)(32), 5(a)(1), 22(d) and 22(e) of the
and Exchange Commission, 100 F Street request, and the issues contested.
Act and rule 22c–1 under the Act, under
NE., Washington, DC 20549.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
sections 6(c) and 17(b) of the Act for an Persons who wish to be notified of a
All submissions should refer to File exemption from sections 17(a)(1) and hearing may request notification by
Number SR–CBOE–2017–007. This file (a)(2) of the Act, and under section writing to the Commission’s Secretary.
number should be included on the 12(d)(1)(J) of the Act for an exemption ADDRESSES: The Commission: Secretary,
subject line if email is used. To help the from sections 12(d)(1)(A) and (B) of the U.S. Securities and Exchange
Commission process and review your Act.
1 Eaton Vance Management, et al., Investment
17 15 U.S.C. 78s(b)(3)(A). Company Act Rel. Nos. 31333 (Nov. 6, 2014)
18 17 CFR 240.19b–4(f). 19 17 CFR 200.30–3(a)(12). (notice) and 31361 (Dec. 2, 2014) (order).
VerDate Sep<11>2014 18:22 Jan 30, 2017 Jkt 241001 PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 E:\FR\FM\31JAN1.SGM 31JAN1](https://thefederalregister.org/doc/82_FR_8902/page/4.svg)
Document Created: 2017-01-31 00:20:04
Document Modified: 2017-01-31 00:20:04
| 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 | 82 FR 8883 |
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