1904 Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 

8 15 U.S.C. 78f(b)(4). 

9See supra note 5. 

10 15 U.S.C. 78f(b)(1). 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f). 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Section 6(b)(4) of the Act,8 which 

provides that Exchange rules may 

provide for the equitable allocation of 

reasonable dues, fees, and other charges 

among its Trading Permit Holders and 

other persons using its facilities. 

In particular, the proposed rule 

change is equitable and not unfairly 

discriminatory as it is allocated to all 

Exchange DPMs and TPHs for which the 

Exchange is the DEA equally based 

upon their gross revenue. In addition, 

the fee is reasonable as it is a slight 

increase to the current Exchange fee 

which has not recently been updated to 

reflect current regulatory costs.9 The 

Exchange believes the proposed rule 

change will protect investors and the 

public interest by increasing the 

Exchange’s regulatory revenue to allow 

the Exchange to more adequately 

perform its regulatory functions and, 

thus, also allow the Exchange to better 

prevent fraudulent and manipulative 

acts and practices. 

Finally, the Exchange also believes 

the proposed rule change is consistent 

with Section 6(b)(1) of the Act,10 which 

provides that the Exchange be organized 

and have the capacity to be able to carry 

out the purposes of the Act and to 

enforce compliance by the Exchange’s 

TPHs and persons associated with its 

TPHs with the Act, the rules and 

regulations thereunder, and the rules of 

the Exchange. The proposed rule change 

is designed to fund the Exchange’s 

regulatory program, and, more 

specifically, to help more closely cover 

the costs of regulating Exchange DPMs 

and those TPHs for which the Exchange 

is the DEA. Thus, the proposed changes 

will help the Exchange to enforce 

compliance of its TPHs with the Act and 

Exchange rules. 

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. In particular, 

the proposed rule change will serve to 

aid the Exchange in fulfilling its 

obligations as a Self-Regulatory 

Organization by further funding the 

Exchange regulatory program. 

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 11 and paragraph (f) of Rule 

19b–4 12 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 rulecomments@sec.gov. Please include File 

Number SR–CBOE–2012–132 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–CBOE–2012–132. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–CBOE– 

2012–132 and should be submitted on 

or before January 30, 2013. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2013–00199 Filed 1–8–13; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–68571; File No. SR–C2– 

2012–046] 

Self-Regulatory Organizations; C2 

Options Exchange, Incorporated; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend the Fees Schedule 

January 3, 2013. 

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 December 

28, 2012, C2 Options Exchange, 

Incorporated (the ‘‘Exchange’’ or ‘‘C2’’) 

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. 


srobinson on DSK4SPTVN1PROD with 
Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 1905 

3The Commission notes that new text is in italics 

and deleted text is in brackets. 

4See Exchange Rule 2.1, which authorizes fees to 

Participants to be ‘‘fixed from time to time by the 

Exchange.’’ 

5See Securities Exchange Act Release No. 34– 

63175 (October 25, 2010), 75 FR 66813 (October 29, 

2010) (SR–C2–2010–006) (immediately effective 

rule establishing, among other things, the 

Designated Examining Authority Fee of $.40 per 

$1,000 of gross revenue as reported on quarterly 

FOCUS reports filed and the firm FOCUS Minimum 

Monthly Fee of $1000 for clearing members and 

$275 for non-clearing members). 

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

7 15 U.S.C. 78f(b)(5). 

8 15 U.S.C. 78f(b)(4). 

9See supra note 5. 

10 15 U.S.C. 78f(b)(1). 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

Fees Schedule. The text of the proposed 

rule change is provided below.3

* * * * * 

C2 Options Exchange, Incorporated 

Rules 

* * * * * 

1.–7. No change. 

8. Regulatory Fees 

A) Firm Designated Examining 

Authority Fee $0.[4]60 per $1,000 of 

gross revenue (subject to a monthly 

minimum fee of $[1,000] 1,500 for 

clearing firms and $[275] 400 for nonclearing firms)—As reported on 

quarterly FOCUS Report, Form X–17A– 

5. Excludes commodity commission 

revenue. 

* * * * * 

The text of the proposed rule change 

is also available on the Exchange’s Web 

site (http://www.c2exchange.com/ 

Legal/), at the Exchange’s Office of the 

Secretary, and at the Commission. 

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 

Fees Schedule.4 More specifically, the 

Exchange is proposing to make changes 

to the section ‘‘Regulatory Fees.’’ Under 

the Exchange’s Regulatory Fees, the 

Exchange charges a fee to firms for 

which the Exchange is the Designated 

Examining Authority (‘‘DEA’’) called the 

‘‘Firm Designated Examining Authority 

Fee.’’ Under such fee, the Exchange 

currently charges these Trading Permit 

Holders (‘‘TPHs’’) for which the 

Exchange is the DEA $0.40 per $1,000 

of gross revenue as reported on 

quarterly FOCUS reports filed by such 

TPHs (excluding commodity 

commission revenue). In addition, this 

fee is subject to a monthly minimum fee 

of $1,000 per month for Clearing TPHs 

and $275 for non-Clearing TPHs. The 

Exchange is proposing to increase this 

fee from $.40 per $1,000 of gross 

revenue to $0.60 per $1,000 of gross 

revenue. In addition, the Exchange is 

proposing to increase the monthly 

minimum fee for Clearing TPHs from 

$1,000 to $1,500 and the monthly 

minimum fee for non-Clearing TPHs 

from $275 to $400. New proposed text 

has been added to the ‘‘Regulatory Fees’’ 

section of the Fees Schedule to reflect 

this charge. 

The Exchange has determined that 

these changes are necessary to increase 

the revenue of the Exchange for the 

purpose of continuing to adequately 

fund its regulatory functions. 

Specifically, the Exchange is proposing 

to increase this fee in order to help more 

closely cover the costs of regulating 

these TPHs for which the Exchange is 

the DEA. The proposed modifications 

are reasonable as they have never been 

changed to reflect growing regulatory 

costs.5 In addition, the Exchange 

believes the proposed changes to the 

Fees Schedule are equitably allocated to 

all TPHs in which the Exchange is the 

DEA as all will be charged based upon 

their gross revenue. 

The proposed changes are to take 

effect on January 1, 2013. 

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 the Section 

6(b)(5) 7 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 facilitation 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,8 which 

provides that Exchange rules may 

provide for the equitable allocation of 

reasonable dues, fees, and other charges 

among its Trading Permit Holders and 

other persons using its facilities. 

In particular, the proposed rule 

change is equitable and not unfairly 

discriminatory as it is allocated to all 

Exchange DPMs and TPHs for which the 

Exchange is the DEA equally based 

upon their gross revenue. In addition, 

the fee is reasonable as it is a slight 

increase to the current Exchange fee 

which has not recently been updated to 

reflect current regulatory costs.9 The 

Exchange believes the proposed rule 

change will protect investors and the 

public interest by increasing the 

Exchange’s regulatory revenue to allow 

the Exchange to more adequately 

perform its regulatory functions and, 

thus, also allow the Exchange to better 

prevent fraudulent and manipulative 

acts and practices. 

Finally, the Exchange also believes 

the proposed rule change is consistent 

with Section 6(b)(1) of the Act,10 which 

provides that the Exchange be organized 

and have the capacity to be able to carry 

out the purposes of the Act and to 

enforce compliance by the Exchange’s 

TPHs and persons associated with its 

TPHs with the Act, the rules and 

regulations thereunder, and the rules of 

the Exchange. The proposed rule change 

is designed to fund the Exchange’s 

regulatory program, and, more 

specifically, to help more closely cover 

the costs of regulating Exchange DPMs 

and those TPHs for which the Exchange 

is the DEA. Thus, the proposed changes 

will help the Exchange to enforce 

compliance of its TPHs with the Act and 

Exchange rules. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

C2 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. In particular, the 

proposed rule change will serve to aid 

the Exchange in fulfilling its obligations 

as a Self-Regulatory Organization by 


srobinson on DSK4SPTVN1PROD with 
1906 Federal Register / Vol. 78, No. 6 / Wednesday, January 9, 2013 / Notices 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f). 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 68217 

(November 13, 2012), 77 FR 69525. 

4Exchange Rule 1080.01(a) provides that ‘‘[a] 

specialist, [remote streaming quote trader] or 

[streaming quote trader] may establish an option 

pricing model via a specialized connection, which 

is known as a specialized quote feed (‘SQF’). 

Specialists, [streaming quote traders] and [remote 

streaming quote traders] individually determine 

which model to select per option and may change 

models during the trading day. Each pricing model 

requires the specialist, [streaming quote traders] 

and [remote streaming quote traders] to input 

various parameters, such as interest rates, 

volatilities (delta, vega, theta, gamma, etc.) and 

dividends.’’ 

further funding the Exchange regulatory 

program. 

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 11 and paragraph (f) of Rule 

19b–4 12 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 rulecomments@sec.gov. Please include File 

Number SR–C2–2012–046 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–C2–2012–046. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–C2– 

2012–046 and should be submitted on 

or before January 30, 2013. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2013–00198 Filed 1–8–13; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–68574; File No. SR–Phlx– 

2012–130] 

Self-Regulatory Organizations; 

NASDAQ OX PHLX LLC; Order 

Approving Proposed Rule Change To 

Amend Performance Evaluations With 

Respect to Quote Submissions of 

Streaming Quote Traders and Remote 

Streaming Quote Traders 

January 3, 2013. 

I. Introduction 

On October 31, 2012, NASDAQ OMX 

PHLX LLC (‘‘Exchange’’ or ‘‘Phlx’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

to Section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to amend performance 

evaluations with respect to Streaming 

Quote Traders (‘‘SQTs’’) and Remote 

Streaming Quote Traders (‘‘RSQTs’’). 

The proposed rule change was 

published for comment in the Federal 

Register on November 19, 2012.3 The 

Commission received no comments on 

the proposal. This order approves the 

proposed rule change. 

II. Description of the Proposal 

The Exchange proposes to amend the 

performance evaluations with respect to 

SQTs and RSQTs. Exchange Rule 510 

sets forth standards by which the 

Exchange periodically conducts an 

evaluation of SQTs and RSQTs to 

determine whether they have fulfilled 

performance standards relating to, 

among other things, quality of markets, 

efficient quote submission to the 

Exchange (including quotes submitted 

through a third party vendor), 

competition among market makers, 

observance of ethical standards, and 

administrative factors. 

Specifically, the Exchange proposes to 

amend the evaluation standards with 

respect to quote submission. According 

to the Exchange, Phlx reviews the 

percentage of total quotes that represent 

the Phlx best bid or offer, quoting 

requirements pursuant to Exchange Rule 

1014, the number of requests for a quote 

spread parameter and efficient quote 

submission. To evaluate efficient quote 

submission, the Exchange currently 

considers how an SQT or RSQT 

optimizes the submission of quotes 

through the Specialized Quote Feed 4 by 

evaluating the number of individual 

quotes per quote block received by the 

Exchange. 

Instead of evaluating the number of 

individual quotes per quote block, the 

Exchange proposes to utilize quote-totrade and quote-to-contracts traded 

ratios to evaluate SQTs and RSQTs. 

According to the Exchange, the quoteto-trade and quote-to-contract traded 

data would provide statistical 

information on spreads and efficiency, 

which would allow the Exchange to 

obtain more precise information to 

evaluate performance. 

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to national 


srobinson on DSK4SPTVN1PROD with