Federal Register / Vol. 81, No. 22 / Wednesday, February 3, 2016 / Notices 5795 

24See 17 CFR 240.17a–3, 17 CFR 240.17a–4 & 

Rule 440—Equities. 

25 15 U.S.C. 78s(b)(2). 

26 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. 76309 

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

2015). 

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

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

Exchange books-and-records 

requirements 24 and that Exchange 

members would still be required to 

provide such trade data to the Exchange 

upon the Exchange’s request. For these 

reasons, the Commission believes that 

the proposal should help to prevent 

fraudulent and manipulative acts and 

practices, promote just and equitable 

principles of trade, remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, protect investors and the public 

interest. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,25 that the 

proposed rule change (SR–NYSEMKT– 

2015–80) be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2016–01923 Filed 2–2–16; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–76995; File No. SR–C2– 

2016–001] 

Self-Regulatory Organizations; C2 

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, C2 Options Exchange, 

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

filed with the Securities and Exchange 

Commission (‘‘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 the 

Options Regulatory Fee. The text of the 

proposed rule change is available on the 

Exchange’s Web site (http://

www.c2exchange.com/Legal/), 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 decrease 

the Options Regulatory Fee (‘‘ORF’’) 

from $.0051 to $.0015 per contract in 

order to 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. The proposed fee 

change would be operative on February 

1, 2016. 

The ORF is assessed by the Exchange 

to each Permit Holder for all options 

transactions executed or cleared by the 

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. In other words, the 

Exchange imposes the ORF on all 

customer-range transactions executed by 

a 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 Permit Holder but 

are ultimately cleared by a Permit 

Holder. In the case where a Permit 

Holder executes a transaction and a 

different Permit Holder clears the 

transaction, the ORF is assessed to the 

Permit Holder who executed the 

transaction. In the case where a nonPermit Holder executes a transaction 

and a Permit Holder clears the 

transaction, the ORF is assessed to the 

Permit Holder who clears the 

transaction. The ORF is collected 

indirectly from 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 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 Permit 

Holder compliance with options sales 

practice rules have largely been 

allocated to FINRA under a 17d–2 

agreement.3 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 

Permit Holders of adjustments to the 

ORF via regulatory circular. The 

Exchange endeavors to provide 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.4 Specifically, 

the Exchange believes the proposed rule 

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

of the Act,5 which provides that 

Exchange rules may provide for the 

mstockstill on DSK4VPTVN1PROD with NOTICES

5796 Federal Register / Vol. 81, No. 22 / Wednesday, February 3, 2016 / Notices 

6 15 U.S.C. 78f(b)(5). 

7 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 Permit 

Holder proprietary transactions if the Exchange 

deems it advisable. 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

equitable allocation of reasonable dues, 

fees, and other charges among its Permit 

Holders and other persons using its 

facilities. Additionally, the Exchange 

believes the proposed rule change is 

consistent with the Section 6(b)(5) 6

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 the Exchange offset 

increased regulatory costs 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 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 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., Permit 

Holder proprietary transactions) of its 

regulatory program.7 The Exchange 

believes the proposed fee change is 

equitable and not unfairly 

discriminatory in that it is charged to all 

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 

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, because it applies 

to all 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 8 and paragraph (f) of Rule 

19b–4 9 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– 

C2–2016–001 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–C2–2016–001. 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– 

2016–001 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. 2016–01931 Filed 2–2–16; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–76984; File No. SR–Phlx– 

2016–07] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change to Make Minor 

Changes to Rule 1064, Crossing, 

Facilitation and Solicited Orders 

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, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘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. 

mstockstill on DSK4VPTVN1PROD with NOTICES