5800 Federal Register / Vol. 81, No. 22 / Wednesday, February 3, 2016 / Notices 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The ORF also applies to customer-range 

transactions executed during Extended Trading 

Hours. 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEArca–2016–20 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–NYSEArca–2016–20. 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 will also 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– 

NYSEArca–2016–20 and should be 

submitted on or before February 24, 

2016. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2016–01922 Filed 2–2–16; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–76993; File No. SR–CBOE– 

2016–004] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating to the Options 

Regulatory Fee 

January 28, 2016. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on January 

14, 2016, 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Chicago Board Options Exchange, 

Incorporated (the ‘‘Exchange’’ or 

‘‘CBOE’’) proposes to amend the 

Options Regulatory Fee. The text of the 

proposed rule change is 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 increase 

the Options Regulatory Fee (‘‘ORF’’) 

from $.0064 to $.0081 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. The proposed fee change would 

be operative on February 1, 2016. 

The ORF is assessed by the Exchange 

to each Trading Permit Holder for all 

options transactions executed or cleared 

by the Trading Permit Holder that are 

cleared by The Options Clearing 

Corporation (‘‘OCC’’) in the customer 

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

customer account at OCC) regardless of 

the exchange on which the transaction 

occurs.3 In other words, the Exchange 

imposes the ORF on all customer-range 

transactions executed by a Trading 

Permit Holder, even if the transactions 

do not take place on the Exchange. The 

ORF also is charged for transactions that 

are not executed by a Trading Permit 

Holder but are ultimately cleared by a 

Trading Permit Holder. In the case 

where a Trading Permit Holder executes 

a transaction and a different Trading 

Permit Holder clears the transaction, the 

ORF is assessed to the Trading Permit 

Holder who executed the transaction. In 

the case where a non-Trading Permit 

Holder executes a transaction and a 

Trading Permit Holder clears the 

transaction, the ORF is assessed to the 

Trading Permit Holder who clears the 

transaction. The ORF is collected 

indirectly from Trading Permit Holders 

through their clearing firms by OCC on 

behalf of the Exchange. 

The ORF is designed to recover a 

material portion of the costs to the 

Exchange of the supervision and 

regulation of Trading Permit Holder 

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 Trading Permit Holder compliance 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 81, No. 22 / Wednesday, February 3, 2016 / Notices 5801 

4See Securities Exchange Act Release No. 76309 

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

2015). 5 15 U.S.C. 78f(b). 

6 15 U.S.C. 78f(b)(4). 

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

8 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 Trading 

Permit Holder proprietary transactions if the 

Exchange deems it advisable. 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f). 

with options sales practice rules have 

largely been allocated to FINRA under 

a 17d–2 agreement.4 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 

Trading Permit Holders of adjustments 

to the ORF via regulatory circular. The 

Exchange endeavors to provide Trading 

Permit Holders with such notice at least 

30 calendar days prior to the effective 

date of the change. 

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.5 Specifically, 

the Exchange believes the proposed rule 

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

of the Act,6 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. Additionally, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5)7 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 

Trading Permit Holders 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 noncustomer trading activity, which tends 

to be more automated and less laborintensive. 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 (e.g., Trading 

Permit Holder proprietary transactions) 

of its regulatory program.8 The 

Exchange believes the proposed fee 

change is equitable and not unfairly 

discriminatory in that it is charged to all 

Trading Permit Holders on all their 

transactions that clear in the customer 

range at the OCC. 

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, because it 

applies to all Trading Permit Holders. 

The proposed ORF is comparable to fees 

charged by other options exchanges for 

the same or similar service. The 

Exchange believes any burden on 

competition imposed by the proposed 

rule change is outweighed by the need 

to help the Exchange adequately fund 

its regulatory activities to ensure 

compliance with the Exchange Act. 

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 9 and paragraph (f) of Rule 

19b–4 10 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 Number SR– 

CBOE–2016–004 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–2016–004. 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– 

2016–004 and should be submitted on 

or before February 24, 2016. 

mstockstill on DSK4VPTVN1PROD with NOTICES

5802 Federal Register / Vol. 81, No. 22 / Wednesday, February 3, 2016 / Notices 

11 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release No. 56251 

(August 14, 2007), 72 FR 46523 (August 20, 2007) 

(SR–Amex–2004–27) (Order approving listing of 

Fixed Return Options (‘‘FROs’’)); see also Securities 

Exchange Act Release No. 71957 (April 16, 2014), 

79 FR 22563 (April 22, 2014) (SR–NYSEMKT– 

2014–06) (Order approving name change from FROs 

to Binary Return Derivatives (ByRDs) and re-launch 

of these products, with certain modification, and 

amending Obvious Errors rules to include ByRDs). 

ByRDs are European-style option contracts on 

individual stocks, exchange-traded funds and 

Index-Linked Securities that have a fixed return in 

cash based on a set strike price; satisfy specified 

listing criteria; and may only be exercised at 

expiration pursuant to the Rules of the Options 

Clearing Corporation. See, e.g., NYSE MKT Rule 

900ByRDs. 

5Each Specialist must be registered with the 

Exchange as a Market Maker and is thus subject to 

the quoting requirements imposed on Market 

Makers. See, e.g., Rules 920NY, 925.1NY(b) and 

927NY. 6See proposed Section I.H. of the Fee Schedule, 

which was previously Reserved. 7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(4) and (5). 

9See supra n. 5. 

10 In determining the $335 fee, the Exchange 

considered factors such as systems upgrades and 

additional data feeds that may be necessary to act 

as a Specialist in ByRDS. 

11See Exchange Act Release No. 34–60536 

(August 19, 2009), 74 FR 43204 (August 26, 2009) 

(SR–ISE–2009–59). 

12 15 U.S.C. 78f(b)(8). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2016–01929 Filed 2–2–16; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–76992; File No. SR– 

NYSEMKT–2016–10] 

Self-Regulatory Organizations; NYSE 

MKT LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Change Modifying the NYSE Amex 

Options Fee Schedule To Add an Early 

Adopter Specialist Credit 

January 28, 2016. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on January 

20, 2016, NYSE MKT LLC (the 

‘‘Exchange’’ or ‘‘NYSE MKT’’) 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 selfregulatory 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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to modify the 

NYSE Amex Options Fee Schedule 

(‘‘Fee Schedule’’). The Exchange 

proposes to implement the fee change 

effective February 1, 2016. The 

proposed change is available on the 

Exchange’s Web site at www.nyse.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 

self-regulatory organization 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 those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to 

implement a monthly credit available to 

Specialists to promote trading in Binary 

Return Derivatives (‘‘ByRDs’’),4 which is 

a new product that the Exchange 

anticipates launching in February 2016. 

To encourage trading of ByRDs, the 

Exchange proposes to offer an incentive 

to Specialists appointed to trade 

ByRDs.5 Specialists that are appointed 

in ByRDs and eligible for the incentive 

payment would be known on the 

Exchange’s Fee Schedule as ‘‘Early 

Adopter Specialists.’’ Specifically, 

effective February 1, 2016, the Exchange 

proposes to offer each ‘‘Early Adopter 

Specialist’’ a monthly credit of $335 for 

each class of ByRDs for which that 

Specialist is appointed, which the 

Exchange believes would provide a 

competitive incentive to Specialists 

based on market conditions and 

competing interests for technology.6 The 

Exchange believes the proposed 

incentive payment would further the 

Exchange’s goal of introducing new 

products to the marketplace by 

encouraging Specialists to make a 

market for these products. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,7 in general, and 

furthers the objectives of Sections 

6(b)(4) and (5) of the Act,8 in particular, 

because it provides for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members, 

issuers and other persons using its 

facilities and does not unfairly 

discriminate between customers, 

issuers, brokers or dealers. 

The Exchange believes that the 

proposed monthly credit is reasonable, 

equitable and not unfairly 

discriminatory for the following 

reasons. First, the proposed credit 

would generate additional order flow to 

the Exchange by creating incentives to 

quote and trade ByRDs options, which 

would benefit all market participants 

even those not eligible to receive the 

credit. The Exchange believes it is 

appropriate to offer the credit to 

Specialists (and not to other types of 

Market Makers) as the Specialists are 

subject to heightened continuous 

quoting obligations, which exceed those 

imposed on other Market Makers.9 The 

Exchange believes the proposed credit 

would recognize the contributions of 

each Early Adopter Specialist to the 

trading environment on the Exchange 

and is designed to attract Specialists 

willing to seek appointments in and, 

thus provide continuous quotes in, 

ByRDs options, which increase in the 

availability of ByRDs options would 

benefit all market participants. 

In addition, the Exchange has 

evaluated the market conditions, 

including the technology needs of 

Specialists appointed to options on 

ByRDs and believes the proposed 

monthly credit of $335 is reasonable, 

equitable and not unfairly 

discriminatory.10 The Exchange notes 

that offering market participants 

incentives to trade in certain newly 

offered products is not new of novel.11

For these reasons, the Exchange 

believes that the proposal is consistent 

with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,12 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. 

The Exchange believes the proposed 

incentive is pro-competitive as it would 

further the Exchange’s goal of 

mstockstill on DSK4VPTVN1PROD with NOTICES