7512 Federal Register / Vol. 80, No. 27 / Tuesday, February 10, 2015 / Notices 

4See ‘‘OMB Report to the Congress on the Joint 

Committee Reductions for Fiscal Year 2015’’, 

Appendix page 17 of 17 at: http://

www.whitehouse.gov/sites/default/files/omb/assets/

legislative_reports/sequestration_order_report_

march2014.pdf 

submission of the PCAOB budget and 

for Commission actions related to each 

budget, a description of the information 

that should be included in each budget 

submission, limits on the PCAOB’s 

ability to incur expenses and obligations 

except as provided in the approved 

budget, procedures relating to 

supplemental budget requests, 

requirements for the PCAOB to furnish 

on a quarterly basis certain budgetrelated information, and a list of 

definitions that apply to the rule and to 

general discussions of PCAOB budget 

matters. 

In accordance with the budget rule, in 

March 2014 the PCAOB provided the 

Commission with a narrative 

description of its program issues and 

outlook for the 2015 budget year. In 

response, the Commission provided the 

PCAOB with economic assumptions and 

budgetary guidance for the 2015 budget 

year. The PCAOB subsequently 

delivered a preliminary budget and 

budget justification to the Commission. 

Staff from the Commission’s Offices of 

the Chief Accountant and Financial 

Management dedicated a substantial 

amount of time to the review and 

analysis of the PCAOB’s programs, 

projects and budget estimates; reviewed 

the PCAOB’s estimates of 2014 actual 

spending; and attended several meetings 

with management and staff of the 

PCAOB to further develop its 

understanding of the PCAOB’s budget 

and operations. During the course of 

this review, Commission staff relied 

upon representations and supporting 

documentation from the PCAOB. Based 

on this review, the Commission issued 

a ‘‘pass back’’ letter to the PCAOB. On 

November 25, 2014, the PCAOB 

approved its 2015 budget during an 

open meeting, and subsequently 

submitted that budget to the 

Commission for approval. 

After considering the above, the 

Commission did not identify any 

proposed disbursements in the 2015 

budget adopted by the PCAOB that are 

not properly recoverable through the 

annual accounting support fee, and the 

Commission believes that the aggregate 

proposed 2015 annual accounting 

support fee does not exceed the 

PCAOB’s aggregate recoverable budget 

expenses for 2015. The Commission also 

acknowledges the PCAOB’s updated 

strategic plan and encourages the 

PCAOB to continue keeping the 

Commission and its staff apprised of 

developments throughout the PCAOB’s 

implementation of its near-term priority 

projects. The Commission looks forward 

to providing views to the PCAOB as 

future updates are made to the plan. 

The Commission is aware that some 

of the projects on the PCAOB’s standard 

setting agenda to update auditing and 

quality control standards have been 

slow to advance. The Commission also 

understands that the Board intends to 

undertake a review of performance and 

management of the standard setting 

agenda. The Commission directs the 

PCAOB during 2015 to provide timely 

updates to the Commission’s staff on the 

Board’s evaluation of all aspects of its 

standard setting process including 

performance and management of the 

process and the potential actions being 

considered by the Board for process 

improvements. The Commission also 

directs the PCAOB, upon its finalization 

of a process improvement plan for the 

standard setting agenda, to include in its 

quarterly reports to the Commission 

updates on the Board’s assessment of 

the improvements in the performance 

and management of the standard setting 

agenda. 

Similarly, as part of its review of the 

2015 budget, the Commission notes that 

the Center for Economic Analysis 

(‘‘Center’’), established in 2014, requires 

continued Board oversight to align its 

activities with the PCAOB’s mission. 

The Commission directs the PCAOB 

during 2015 to provide timely updates 

to the Commission’s staff on the 

activities of the Center, including with 

respect to defining its role and aligning 

its activities with the Board’s mission. 

The Commission also directs the 

PCAOB to include in its quarterly 

reports to the Commission, updates on 

the Board’s assessment of the 

performance of the Center. 

The Commission understands that in 

recent years the PCAOB has taken 

significant and productive steps to 

improve its information technology 

(‘‘IT’’) program. These steps include IT 

staffing changes, implementing stronger 

IT governance structures, and 

strengthening Board oversight of its IT 

program. Based upon updates provided 

by the PCAOB, the Commission also 

understands that these efforts are 

ongoing; and directs the Board to 

continue to provide in its quarterly 

reports to the Commission detailed 

information about the state of the 

PCAOB’s IT program, including 

planned, estimated, and actual costs for 

IT projects, and the level of involvement 

of consultants. These reports also 

should continue to include: (a) A 

discussion of the Board’s assessment of 

the progress and implementation of the 

Board actions mentioned above; and (b) 

the quarterly IT report that is prepared 

by PCAOB staff and submitted to the 

Board. 

The Commission also directs the 

PCAOB during 2015 to continue to 

include in its quarterly reports to the 

Commission information about the 

PCAOB’s inspections program. Such 

information is to include: (a) Statistics 

relative to the numbers and types of 

firms budgeted and expected to be 

inspected in 2015, including by location 

and by year the inspections are required 

to be conducted in accordance with the 

Sarbanes-Oxley Act and PCAOB rules; 

(b) information about the timing of the 

issuance of inspections reports for 

domestic and non-U.S. inspections; and 

(c) updates on the PCAOB’s efforts to 

establish cooperative arrangements with 

respective non-U.S. authorities for 

inspections required in those countries. 

The Commission understands that the 

Office of Management and Budget 

(‘‘OMB’’) has determined the 2015 

budget of the PCAOB to be sequestrable 

under the Budget Control Act of 2011.4

Unless legislation occurs that avoids 

sequestration, we expect the PCAOB 

will have approximately $1 million in 

excess funds available from the 2014 

sequestration for spending in 2015. As 

such, the PCAOB has reduced its 

accounting support fee for 2015 by 

approximately $1 million. 

The Commission has determined that 

the PCAOB’s 2015 budget and annual 

accounting support fee are consistent 

with Section 109 of the Sarbanes-Oxley 

Act. Accordingly, 

It is ordered, pursuant to Section 109 

of the Sarbanes-Oxley Act, that the 

PCAOB budget and annual accounting 

support fee for calendar year 2015 are 

approved. 

By the Commission. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–02637 Filed 2–9–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74201; File No. SR–BOX– 

2015–08] 

Self-Regulatory Organizations; BOX 

Options Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change Relating to 

the Options Regulatory Fee 

February 4, 2015. 

Pursuant to Section 19(b)(1) under the 

Securities Exchange Act of 1934 (the 


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 27 / Tuesday, February 10, 2015 / Notices 7513 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on January 

28, 2015, BOX Options Exchange LLC 

(the ‘‘Exchange’’) 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 

Exchange filed the proposed rule change 

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

Act,3 and Rule 19b–4(f)(2) thereunder,4

which renders the proposal effective 

upon filing with the Commission. 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 the Substance 

of the Proposed Rule Change 

The Exchange is filing with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

to amend the Fee Schedule to increase 

the ORF from $0.0030 per contract to 

$0.0038 per contract. While changes to 

the fee schedule pursuant to this 

proposal will be effective upon filing, 

the changes will become operative on 

February 2, 2015. The text of the 

proposed rule change is available from 

the principal office of the Exchange, at 

the Commission’s Public Reference 

Room and also on the Exchange’s 

Internet Web site at http://

boxexchange.com. 

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 the 

Fee Schedule to increase the ORF from 

$0.0030 per contract to $0.0038 per 

contract. The Exchange proposes to 

increase the ORF in light of increased 

regulatory costs and expected volume 

levels in 2015. The filing is based on the 

substantially similar filings filed by 

Miami International Securities 

Exchange, LLC. The proposed fee 

change would be operative on February 

2, 2015. 

The Exchange proposes to increase 

the ORF from $0.0030 per contract to 

$0.0038 per contract in light of 

increased regulatory costs and expected 

volume levels in 2015. The ORF is 

assessed by the Exchange on each 

Participant for all options transactions 

executed or cleared by the Participant 

that are cleared by The Options Clearing 

Corporation (‘‘OCC’’) in the customer 

range (i.e., transactions that clear in the 

customer account of the Participant’s 

clearing firm at OCC) regardless of the 

exchange on which the transaction 

occurs. The fee is collected indirectly 

from Participants through their clearing 

firms by OCC on behalf of the Exchange. 

The dues and fees paid by Participants 

go into the general funds of the 

Exchange, a portion of which is used to 

help pay the costs of regulation. The 

ORF is designed to recover a material 

portion of the costs to the Exchange of 

the supervision and regulation of 

Participant customer options business, 

including performing routine 

surveillances, investigations, 

examinations, financial monitoring, as 

well as policy, rulemaking, interpretive 

and enforcement activities. 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 notes that its regulatory 

responsibilities with respect to 

Participant compliance with options 

sales practice rules have largely been 

allocated to FINRA under a 17d–2 

agreement. 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. If the Exchange determines 

regulatory revenues exceed regulatory 

costs, the Exchange will adjust the ORF 

by submitting a fee change filing to the 

Commission, as set forth in the BOX Fee 

Schedule. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the Act, 

in general, and Section 6(b)(4) and 

6(b)(5)of the Act, in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees, and other charges 

among BOX Participants and other 

persons using its facilities and does not 

unfairly discriminate between 

customers, issuers, brokers or dealers. 

The Exchange believes the proposed 

fee change is reasonable because it 

would help the Exchange offset 

increased regulatory expenses, but 

would not result in total regulatory 

revenue exceeding total regulatory costs. 

Moreover, the Exchange believes the 

ORF ensures fairness by assessing 

higher fees to those Participants 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 

noncustomer component—Participant 

proprietary transactions) of its 

regulatory program. The Exchange 

believes that the proposed change is 

equitable and not unfairly 

discriminatory because it will apply in 

the same manner to all Participants that 

are subject to the ORF. 

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 that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Because 

competitors are free to modify their own 

fees and credits in response, and 

because market participants may readily 

adjust their trading practices, the 

Exchange believes that the degree to 

which fee or credit changes in this 

market may impose any burden on 

competition is extremely limited. As a 

result of all of these considerations, the 

Exchange does not believe that the 

proposed change will impair the ability 

of Participants or competing order 

execution venues to maintain their 

competitive standing in the financial 

markets. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 


rljohnson on DSK3VPTVN1PROD with NOTICES
7514 Federal Register / Vol. 80, No. 27 / Tuesday, February 10, 2015 / Notices 

5 15 U.S.C. 78s(b)(3)(A)(ii). 

6 17 CFR 240.19b–4(f)(2). 

7 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange proposes to update section 

references to take into account the new section 

numbers when this section is removed. Section 

references in this proposed rule change are to the 

current section numbers. 

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)(ii) of the Exchange Act 5 and 

Rule 19b–4(f)(2) thereunder,6 because it 

establishes or changes a due, or fee. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend the rule change if 

it appears to the Commission that the 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or would otherwise further 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

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 Number SR– 

BOX–2015–08 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–BOX–2015–08. 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–BOX– 

2015–08, and should be submitted on or 

before March 3, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–02642 Filed 2–9–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74205; File No. SR–ISE 

Gemini–2015–03] 

Self-Regulatory Organizations; ISE 

Gemini, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the Schedule 

of Fees 

February 4, 2015. 

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 

23, 2015, ISE Gemini, LLC (the 

‘‘Exchange’’ or ‘‘ISE Gemini’’) filed with 

the Securities and Exchange 

Commission the proposed rule change, 

as described in Items I, II, and III below, 

which items have been prepared by the 

self-regulatory organization. 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 

ISE Gemini proposes to amend the 

Schedule of Fees to eliminate fees and 

rebates for Mini Options, which were 

delisted on the Exchange as of the close 

of business on December 17, 2014. The 

text of the proposed rule change is 

available on the Exchange’s Internet 

Web site at http://www.ise.com, at the 

principal office of the Exchange, 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 

self-regulatory organization 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 is permitted to list Mini 

Option contracts overlying ten shares of 

the following five symbols: SPY, AAPL, 

GLD, GOOGL, and AMZN, pursuant to 

Supplementary Material .13 to Rule 504. 

Due to the smaller exercise and 

assignment value of Mini Options 

contracts, the Exchange charges fees and 

provides rebates in these Mini Option 

classes at a rate that is 1/10th the rate 

of fees and rebates the Exchange 

provides for trading in Standard 

Options. As the Exchange has delisted 

all Mini Options as of the close of 

business on December 17, 2014, the 

Exchange now proposes to eliminate 

fees and rebates for Mini Options in the 

Schedule of Fees. In particular, the 

Exchange also proposes to remove 

language related to Mini Options in the 

following sections of the Schedule of 

Fees: 

1. Sections II, which contains tables 

on Regular Order Fees and Rebates for 

Mini Options, including Qualifying Tier 

Thresholds. This section will be 

eliminated in its entirety.3

2. The definition of Mini Options in 

the Preface. 

3. Language related to basing volume 

thresholds on both Standard and Mini 

Option volume in the footnotes to the 

Qualifying Tier Thresholds of section I. 

4. Route-out fees for Mini Options in 

section III, A. 

5. Language related to charging the 

Options Regulatory Fee for options 

transactions in Mini Options in section 

IV, A. 


rljohnson on DSK3VPTVN1PROD with NOTICES