Federal Register / Vol. 83, No. 164 / Thursday, August 23, 2018 / Notices 42749 

39 Id. 40 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed fee 

change on August 1, 2018 (SR–CBOE–2018–054) for 

August 1, 2018 effectiveness. On business date 

August 9, 2018, the Exchange withdrew that filing 

and submitted this filing. 

the Operational Arrangements and the 

Fee Guide would have any impact on 

competition 39 because it would merely 

update the Operational Arrangements 

and the Fee Guide to make changes for 

accuracy and clarity, and therefore 

would not affect the rights and 

obligations of any Participant or other 

interested party. 

(C) Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants, or Others 

Written comments relating to this 

proposed rule change have not been 

solicited or received. DTC will notify 

the Commission of any written 

comments received by DTC. 

III. Date of Effectiveness of the 

Proposed Rule Change, and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: 

(i) Significantly affect the protection 

of investors or the public interest; 

(ii) impose any significant burden on 

competition; and 

(iii) become operative for 30 days 

from the date on which it was filed, or 

such shorter time as the Commission 

may designate, it has become effective 

pursuant to Section 19(b)(3)(A) of the 

Act and Rule 19b–4(f)(6) 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. 

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 rule-comments@

sec.gov. Please include File Number SR– 

DTC–2018–007 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–DTC–2018–007. 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 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 DTC and on DTCC’s website 

(http://dtcc.com/legal/sec-rulefilings.aspx). 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–DTC– 

2018–007 and should be submitted on 

or before September 13, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.40

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–18159 Filed 8–22–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83877; File No. SR–CBOE– 

2018–057] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the Options 

Regulatory Fee 

August 17, 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 August 9, 

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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

Fees Schedule relating to the Options 

Regulatory Fee. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/CBOELegalRegulatory

Home.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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to decrease 

the Options Regulatory Fee (‘‘ORF’’) 

from $0.0049 per contract to $0.0028 per 

contract in order to help ensure that 

revenue collected from the ORF, in 

combination with other regulatory fees 

and fines, meets the Exchange’s total 

regulatory costs.3

The ORF is assessed by Cboe Options 

to each Trading Permit Holder (‘‘TPH’’) 

for options transactions cleared by the 

TPH that are cleared by the Options 


daltland on DSKBBV9HB2PROD with NOTICES
42750 Federal Register / Vol. 83, No. 164 / Thursday, August 23, 2018 / Notices 

4The ORF also applies to customer-range 

transactions executed during Extended Trading 

Hours. 

5See Securities Exchange Act Release No. 76309 

(October 29, 2015), 80 FR 68361 (November 4, 

2015). 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(4). 

8 15 U.S.C. 78f(b)(5). 

9 If the Exchange changes its method of funding 

regulation or if circumstances otherwise change in 

the future, the Exchange may decide to modify the 

ORF or assess a separate regulatory fee on TPH 

proprietary transactions if the Exchange deems it 

advisable. 

Clearing Corporation (‘‘OCC’’) in the 

customer range, regardless of the 

exchange on which the transaction 

occurs.4 In other words, the Exchange 

imposes the ORF on all customer-range 

transactions cleared by a TPH, even if 

the transactions do not take place on the 

Exchange. The ORF is collected by OCC 

on behalf of the Exchange from the 

Clearing Trading Permit Holder 

(‘‘CTPH’’) or non-CTPH that ultimately 

clears the transaction. With respect to 

linkage transactions, Cboe Options 

reimburses its routing broker providing 

Routing Services pursuant to Cboe 

Options Rule 6.14B for options 

regulatory fees it incurs in connection 

with the Routing Services it provides. 

Revenue generated from ORF, when 

combined with all of the Exchange’s 

other regulatory fees and fines, is 

designed to recover a material portion of 

the regulatory costs to the Exchange of 

the supervision and regulation of TPH 

customer options business. Regulatory 

costs include direct regulatory expenses 

and certain indirect expenses for work 

allocated in support of the regulatory 

function. The direct expenses include 

in-house and third party service 

provider costs to support the day to day 

regulatory work such as surveillances, 

investigations and examinations. The 

indirect expenses include support from 

such areas as human resources, legal, 

information technology and accounting. 

These indirect expenses are estimated to 

be approximately 10% of Cboe Options’ 

total regulatory costs for 2018. Thus, 

direct expenses are estimated to be 

approximately 90% of total regulatory 

costs for 2018. In addition, it is Cboe 

Options’ practice that revenue generated 

from ORF not exceed more than 75% of 

total annual regulatory costs. These 

expectations are estimated, preliminary 

and may change. There can be no 

assurance that our final costs for 2018 

will not differ materially from these 

expectations and prior practice; 

however, the Exchange believes that 

revenue generated from the ORF, when 

combined with all of the Exchange’s 

other regulatory fees and fines, will 

cover a material portion, but not all, of 

the Exchange’s regulatory costs. 

The Exchange also notes that its 

regulatory responsibilities with respect 

to TPH compliance with options sales 

practice rules have largely been 

allocated to FINRA under a 17d–2 

agreement.5 The ORF is not designed to 

cover the cost of that options sales 

practice regulation. 

The Exchange will continue to 

monitor the amount of revenue 

collected from the ORF to ensure that it, 

in combination with its other regulatory 

fees and fines, does not exceed the 

Exchange’s total regulatory costs. The 

Exchange monitors its regulatory costs 

and revenues at a minimum on a semiannual basis. If the Exchange 

determines regulatory revenues exceed 

or are insufficient to cover a material 

portion of its regulatory costs, the 

Exchange will adjust the ORF by 

submitting a fee change filing to the 

Commission. The Exchange notifies 

TPHs of adjustments to the ORF via 

regulatory circular. The Exchange 

endeavors to provide TPHs with such 

notice at least 30 calendar days prior to 

the effective date of the change. 

The Exchange lastly proposes a 

couple of minor clean up changes to the 

Fees Schedule. Particularly, the ORF is 

listed as being $0.0081 per contract 

through January 31, 2018 and $0.0049 

per contract effective February 1, 2018. 

As these dates have passed and the ORF 

is now simply $0.0028 per contract, the 

Exchange proposes to delete the 

reference to the ORF being $0.0081 per 

contract through January 31, 2018 and 

the February 1, 2018 effective date of 

the $0.0049 per contract ORF. 

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.6 Specifically, 

the Exchange believes the proposed rule 

change is consistent with Section 6(b)(4) 

of the Act,7 which provides that 

Exchange rules may provide for the 

equitable allocation of reasonable dues, 

fees, and other charges among its TPHs 

and other persons using its facilities. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 8 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange believes the proposed 

fee change is reasonable because it 

would help ensure that revenue 

collected from the ORF, in combination 

with other regulatory fees and fines, 

does not exceed the Exchange’s total 

regulatory costs. Moreover, the 

Exchange believes the ORF ensures 

fairness by assessing higher fees to those 

TPHs that require more Exchange 

regulatory services based on the amount 

of customer options business they 

conduct. Regulating customer trading 

activity is much more labor intensive 

and requires greater expenditure of 

human and technical resources than 

regulating non-customer trading 

activity, which tends to be more 

automated and less labor-intensive. As a 

result, the costs associated with 

administering the customer component 

of the Exchange’s overall regulatory 

program are materially higher than the 

costs associated with administering the 

non-customer component (e.g., TPH 

proprietary transactions) of its 

regulatory program.9 The Exchange 

believes the proposed fee change is 

equitable and not unfairly 

discriminatory in that it is charged to all 

TPHs on all their transactions that clear 

in the customer range at the OCC. 

The Exchange believes the proposal to 

eliminate obsolete language with respect 

to past ORF rates maintains clarity in 

the rules and alleviates potential 

confusion, thereby protecting investors 

and the public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. This 

proposal does not create an unnecessary 

or inappropriate intra-market burden on 

competition because the ORF applies to 

all customer activity, thereby raising 

regulatory revenue to offset regulatory 

expenses. It also supplements the 

regulatory revenue derived from noncustomer activity. This proposal does 

not create an unnecessary or 

inappropriate inter-market burden on 

competition because it is a regulatory 

fee that supports regulation in 

furtherance of the purposes of the Act. 

The Exchange is obligated to ensure that 

the amount of regulatory revenue 

collected from the ORF, in combination 

with its other regulatory fees and fines, 

does not exceed regulatory costs. 


daltland on DSKBBV9HB2PROD with NOTICES
Federal Register / Vol. 83, No. 164 / Thursday, August 23, 2018 / Notices 42751 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f). 

12 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3For purposes of this rule, references to ‘‘MarketMaker’’ shall refer to Trading Permit Holders acting 

in the capacity of a Market-Maker and shall include 

all Exchange Market-Maker capacities (e.g., 

Designated Primary Market-Makers and Lead 

Market-Makers). 

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 10 and paragraph (f) of Rule 

19b–4 11 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. 

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 rule-comments@

sec.gov. Please include File No. SR– 

CBOE–2018–057 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 No. 

SR–CBOE–2018–057. 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 No. 

SR–CBOE–2018–057, and should be 

submitted on or before September 13, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–18162 Filed 8–22–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83872; File No. SR–CBOE– 

2018–55] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing of a 

Proposed Rule Change Relating To 

Amend Rule 6.21., Give Up of a 

Clearing Trading Permit Holder 

August 17, 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 August 7, 

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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

rules governing the give up of a Clearing 

Trading Permit Holder by a Trading 

Permit Holder on exchange transactions. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/CBOELegalRegulatory

Home.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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rule 6.21, which governs the give up of 

a Clearing Trading Permit Holder 

(‘‘Clearing TPH’’) by a Trading Permit 

Holder (‘‘TPH’’) on Exchange 

transactions. 

Background 

By way of background, Cboe Options 

Rule 6.21 provides that when a TPH 

executes a transaction on the Exchange, 

it must give up the name of the CTPH 

(the ‘‘Give Up’’) through which the 

transaction will be cleared. Rule 6.21 

also provides that a TPH may only give 

up a ‘‘Designated Give Up’’ or its 

‘‘Guarantor.’’ This limitation is enforced 

by the Exchange’s trading systems. 

A ‘‘Designated Give Up’’ is currently 

defined as any CTPH that a TPH (other 

than a Market-Maker 3) identifies to the 

Exchange, in writing, as a CTPH that the 

TPH would like to have the ability to 

give up. To designate a ‘‘Designated 

Give Up’’ a TPH must submit written 


daltland on DSKBBV9HB2PROD with NOTICES