83 FR 6280 - Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule Concerning the Floor Broker SPX Surcharge

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 30 (February 13, 2018)

Page Range		6280-6281
FR Document		2018-02859
Federal Register, Volume 83 Issue 30 (Tuesday, February 13, 2018)
[Federal Register Volume 83, Number 30 (Tuesday, February 13, 2018)]
[Notices]
[Pages 6280-6281]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-02859]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82648; File No. SR-CBOE-2018-015]


Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
the Fees Schedule Concerning the Floor Broker SPX Surcharge

February 7, 2018.
    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 February 1, 2018, Cboe Exchange, Inc. (the ``Exchange'' or 
``Cboe Options'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I, 
II, and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its monthly fee of $3,000 per month 
for any Floor Broker Trading Permit Holder (``TPH'') that executes more 
than 20,000 SPX (including SPXW) contracts during the month (``FB SPX 
Surcharge''). Particularly, the Exchange proposes to adopt an exclusion 
for Multi-Class Broad-Based Index Option Spread Orders (``Multi-Class 
Spread Orders'').
    The text of the proposed rule change is also available on the 
Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the 
Secretary, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

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

1. Purpose
    The Exchange proposes to amend its monthly fee of $3,000 per month 
for any Floor Broker Trading Permit Holder (``TPH'') that executes more 
than 20,000 SPX (including SPXW) contracts during the month (``FB SPX 
Surcharge''). Particularly, the Exchange proposes to adopt an exclusion 
for Multi-Class Broad-Based Index Option Spread Orders (``Multi-Class 
Spread Orders'').
    By way of background, Cboe Options Rule 24.19 permits the execution 
of Multi-Class Spread Orders, which are generally defined as orders to 
buy a stated number of contracts of a broad-based index option or 
exchange-traded fund (``ETF'')/exchange-traded note (``ETN'') option 
derived from a broad-based index and to sell an equal number, or an 
equivalent number of contracts of a different broad-based index option 
or ETF/ETN option derived from a broad-based index. These orders may be 
represented at the trading station of either option involved, subject 
to the conditions in Rule 24.19.\3\
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    \3\ See Cboe Options Rule 24.19.
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    The FB SPX Surcharge was not enacted with the intention of 
assessing it to Floor Brokers to whom it would only apply due to their 
execution of Multi-Class Spread Orders that included an SPX component. 
Rather, the surcharge was intended to be assessed on Floor Brokers that 
regularly execute SPX trades in the SPX trading crowd. In order to 
avoid being assessed the FB SPX Surcharge as a result of the execution 
of Multi-Class Spread Orders with an SPX component, the Exchange 
proposes to provide that Floor Brokers to which the FB SPX Surcharge is 
not otherwise applicable will not be assessed the FB SPX Surcharge if 
they only execute SPX open outcry transactions as part of a Multi-Class 
Spread Order. In order to identify those instances, the Exchange is 
proposing to require that Floor Brokers submit the Floor Broker SPX 
Surcharge Exclusion for Multi-Class Broad-Based Index Spread 
Transactions Form (the ``Form'') within three business days of 
execution of the applicable spread transaction(s).
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\4\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \5\ requirements that the rules of an exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transactions in securities, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest. Additionally, 
the Exchange believes the proposed rule change is consistent with 
Section 6(b)(4) of the Act,\6\ 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.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes the proposed rule change is reasonable 
because it allows Floor Brokers to whom the FB SPX Surcharge would 
apply only due to their execution of Multi-Class Spread Orders with an 
SPX component to avoid having to pay the surcharge. The proposed rule 
change is equitable and not unfairly discriminatory because the

[[Page 6281]]

FB SPX Surcharge is intended to be assessed on those Floor Brokers who 
regularly conduct open outcry transactions in SPX or SPX Weeklys (i.e., 
Floor Brokers who are engaging in regular SPX trades), since those 
Floor Brokers are engaging in transactions for which executing SPX 
trades is the primary purpose of such transactions (or are signing up 
to do so). Floor Brokers who only engage in SPX transactions through 
the execution of Multi-Class Spread Orders with an SPX component are 
not engaging in such transactions with primary purpose of executing an 
SPX order, but instead are just executing an SPX order as part of a 
larger Multi-Class Spread Order. Additionally, all Floor Brokers who 
only engage in SPX transactions through the execution of Multi-Class 
Spread Orders with an SPX component will have the opportunity to be 
excluded from the FB SPX Surcharge.

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

    The Exchange does not believe that the proposed rule change will 
impose any burdens on competition that are not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange does not 
believe 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 the proposed rule change provides Floor 
Brokers not engaged in regular SPX trades with an opportunity to be 
excluded from the FB SPX Surcharge, which is intended to be assessed on 
those Floor Brokers who engage in transactions for which executing SPX 
trades is the primary purpose of such transactions (or are signing up 
to do so). The Exchange does not believe that the proposed rule changes 
will impose any burden on intermarket competition that is not necessary 
or appropriate in furtherance of the purposes of the Act because the 
proposed rule change only affects trading on the Exchange's trading 
floor. To the extent that the proposed changes make Cboe Options a more 
attractive marketplace for market participants at other exchanges, such 
market participants are welcome to become Cboe Options market 
participants.

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

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

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \7\ and paragraph (f) of Rule 19b-4 \8\ 
thereunder. At any time within 60 days of the filing of the proposed 
rule change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission will institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-CBOE-2018-015 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-2018-015. 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 website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-CBOE-2018-015 and should be submitted on 
or before March 6, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-02859 Filed 2-12-18; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 83, No. 30 / Tuesday, February 13, 2018 / Notices 6281

FB SPX Surcharge is intended to be III. Date of Effectiveness of the Reference Room, 100 F Street NE,
assessed on those Floor Brokers who Proposed Rule Change and Timing for Washington, DC 20549 on official
regularly conduct open outcry Commission Action business days between the hours of
transactions in SPX or SPX Weeklys The foregoing rule change has become 10:00 a.m. and 3:00 p.m. Copies of the
(i.e., Floor Brokers who are engaging in effective pursuant to Section 19(b)(3)(A) filing also will be available for
regular SPX trades), since those Floor of the Act 7 and paragraph (f) of Rule inspection and copying at the principal
Brokers are engaging in transactions for 19b–4 8 thereunder. At any time within office of the Exchange. All comments
which executing SPX trades is the 60 days of the filing of the proposed rule received will be posted without change.
primary purpose of such transactions (or change, the Commission summarily may Persons submitting comments are
are signing up to do so). Floor Brokers temporarily suspend such rule change if cautioned that we do not redact or edit
who only engage in SPX transactions it appears to the Commission that such personal identifying information from
through the execution of Multi-Class action is necessary or appropriate in the comment submissions. You should
Spread Orders with an SPX component public interest, for the protection of submit only information that you wish
are not engaging in such transactions investors, or otherwise in furtherance of to make available publicly. All
with primary purpose of executing an the purposes of the Act. If the submissions should refer to File
SPX order, but instead are just executing Commission takes such action, the Number SR–CBOE–2018–015 and
an SPX order as part of a larger Multi- Commission will institute proceedings
should be submitted on or before March
Class Spread Order. Additionally, all to determine whether the proposed rule
6, 2018.
Floor Brokers who only engage in SPX change should be approved or
transactions through the execution of disapproved. For the Commission, by the Division of
Multi-Class Spread Orders with an SPX Trading and Markets, pursuant to delegated
IV. Solicitation of Comments authority.9
component will have the opportunity to
be excluded from the FB SPX Surcharge. Interested persons are invited to Eduardo A. Aleman,
submit written data, views, and
Assistant Secretary.
B. Self-Regulatory Organization’s arguments concerning the foregoing,
Statement on Burden on Competition [FR Doc. 2018–02859 Filed 2–12–18; 8:45 am]
including whether the proposed rule
change is consistent with the Act. BILLING CODE 8011–01–P
The Exchange does not believe that Comments may be submitted by any of
the proposed rule change will impose the following methods:
any burdens on competition that are not SECURITIES AND EXCHANGE
necessary or appropriate in furtherance Electronic Comments COMMISSION
of the purposes of the Act. The • Use the Commission’s internet
Exchange does not believe the proposed comment form (http://www.sec.gov/ [Release No. 34–82655; File No. SR–BOX–
rule change will impose any burden on rules/sro.shtml); or 2018–03]
intramarket competition that is not • Send an email to rule-comments@
necessary or appropriate in furtherance sec.gov. Please include File Number SR– Self-Regulatory Organizations; BOX
of the purposes of the Act, because the CBOE–2018–015 on the subject line. Options Exchange LLC; Notice of
proposed rule change provides Floor Paper Comments Filing and Immediate Effectiveness of
Brokers not engaged in regular SPX a Proposed Rule Change To Amend
trades with an opportunity to be • Send paper comments in triplicate
the Fee Schedule To Amend the BOX
excluded from the FB SPX Surcharge, to Secretary, Securities and Exchange
Volume Rebate
which is intended to be assessed on Commission, 100 F Street NE,
those Floor Brokers who engage in Washington, DC 20549–1090. February 7, 2018.
transactions for which executing SPX All submissions should refer to File
Pursuant to Section 19(b)(1) of the
trades is the primary purpose of such Number SR–CBOE–2018–015. This file
number should be included on the Securities Exchange Act of 1934 (the
transactions (or are signing up to do so). ‘‘Act’’),1 and Rule 19b–4 thereunder,2
The Exchange does not believe that the subject line if email is used. To help the
Commission process and review your notice is hereby given that on January
proposed rule changes will impose any 31, 2018, BOX Options Exchange LLC
burden on intermarket competition that comments more efficiently, please use
only one method. The Commission will (the ‘‘Exchange’’) filed with the
is not necessary or appropriate in Securities and Exchange Commission
furtherance of the purposes of the Act post all comments on the Commission’s
internet website (http://www.sec.gov/ (‘‘Commission’’) the proposed rule
because the proposed rule change only change as described in Items I, II, and
affects trading on the Exchange’s trading rules/sro.shtml). Copies of the
submission, all subsequent III below, which Items have been
floor. To the extent that the proposed
amendments, all written statements prepared by the Exchange. The
changes make Cboe Options a more
with respect to the proposed rule Exchange filed the proposed rule change
attractive marketplace for market
change that are filed with the pursuant to Section 19(b)(3)(A)(ii) of the
participants at other exchanges, such
Commission, and all written Act,3 and Rule 19b–4(f)(2) thereunder,4
market participants are welcome to
communications relating to the which renders the proposal effective
become Cboe Options market
proposed rule change between the upon filing with the Commission. The
participants.
Commission and any person, other than Commission is publishing this notice to
sradovich on DSK3GMQ082PROD with NOTICES

C. Self-Regulatory Organization’s those that may be withheld from the solicit comments on the proposed rule
Statement on Comments on the public in accordance with the change from interested persons.
Proposed Rule Change Received From provisions of 5 U.S.C. 552, will be
Members, Participants, or Others available for website viewing and 9 17 CFR 200.30–3(a)(12).
printing in the Commission’s Public 1 15 U.S.C. 78s(b)(1).
The Exchange neither solicited nor 2 17 CFR 240.19b–4.

received comments on the proposed 7 15 U.S.C. 78s(b)(3)(A). 3 15 U.S.C. 78s(b)(3)(A)(ii).

rule change. 8 17 CFR 240.19b–4(f). 4 17 CFR 240.19b–4(f)(2).

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Document Created: 2018-02-13 02:32:26
Document Modified: 2018-02-13 02:32:26
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		83 FR 6280