62988 Federal Register / Vol. 79, No. 203 / Tuesday, October 21, 2014 / Notices 

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. 72937 

(August 27, 2014), 79 FR 52385. 

4 15 U.S.C. 78s(b)(2). 

5 Id. 

6 17 CFR 200.30–3(a)(31). 

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

2 17 CFR 240.19b–4. 

3See CBOE Fees Schedule, ‘‘Order Router 

Subsidy Program’’ and ‘‘Complex Order Router 

Subsidy Program’’ tables for more details on the 

ORS and CORS Programs. 

Washington, DC 20549–1090 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–BATS– 

2014–047, and should be submitted on 

or before November 12, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–24947 Filed 10–20–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73364; File No. SR– 

NYSEArca–2014–89] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Designation of a 

Longer Period for Commission Action 

on Proposed Rule Change To List and 

Trade Shares of Eight PIMCO 

Exchange-Traded Funds 

October 15, 2014. 

On August 15, 2014, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ or ‘‘Exchange’’) 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 list and trade shares of the 

following eight PIMCO exchange-traded 

funds, pursuant to NYSE Arca Equities 

Rule 8.600: PIMCO StocksPLUS®

Absolute Return Exchange-Traded 

Fund, PIMCO Small Cap StocksPLUS®

AR Strategy Exchange-Traded Fund, 

PIMCO Fundamental IndexPLUS® AR 

Exchange-Traded Fund, PIMCO Small 

Company Fundamental IndexPLUS® AR 

Strategy Exchange-Traded Fund, PIMCO 

EM Fundamental IndexPLUS® AR 

Strategy Exchange-Traded Fund, PIMCO 

International Fundamental IndexPLUS®

AR Strategy Exchange-Traded Fund, 

PIMCO EM StocksPLUS® AR Strategy 

Exchange-Traded Fund, and PIMCO 

International StocksPLUS® AR Strategy 

Exchange-Traded Fund (Unhedged). 

The proposed rule change was 

published for comment in the Federal 

Register on September 3, 2014.3 The 

Commission received no comments on 

the proposal. 

Section 19(b)(2) of the Act 4 provides 

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day for this filing 

is October 18, 2014. The Commission is 

extending this 45-day time period. 

The Commission finds it appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change so that it has sufficient time 

to consider this proposed rule change. 

Accordingly, the Commission, pursuant 

to Section 19(b)(2) of the Act,5

designates December 2, 2014, as the date 

by which the Commission shall either 

approve or disapprove, or institute 

proceedings to determine whether to 

disapprove, the proposed rule change 

(File No. SR–NYSEArca–2014–89). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–24950 Filed 10–20–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73354; File No. SR–CBOE– 

2014–075] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the CBOE 

Order Routing Subsidy Program and 

the Complex Order Routing Subsidy 

Program 

October 15, 2014. 

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 October 

1, 2014, 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 

The Exchange proposes to amend its 

Fees Schedule. 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 make a 

number of amendments to its Order 

Routing Subsidy (ORS) and Complex 

Order Routing Subsidy (CORS) 

Programs (collectively ‘‘Programs’’). By 

way of background, the ORS and CORS 

Programs allow CBOE to enter into 

subsidy arrangements with any CBOE 

Trading Permit Holder (‘‘TPH’’) (each, a 

‘‘Participating TPH’’) or Non-CBOE TPH 

broker-dealer (each a ‘‘Participating 

Non-CBOE TPH’’) that meet certain 

criteria and provide certain order 

routing functionalities to other CBOE 

TPHs, Non-CBOE TPHs and/or use such 

functionalities themselves.3 (The term 

‘‘Participant’’ as used in this filing refers 

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Federal Register / Vol. 79, No. 203 / Tuesday, October 21, 2014 / Notices 62989 

4See NYSE Amex Options Fee Schedule (‘‘Fee 

Schedule’’), Market Access and Connectivity 

(‘‘MAC’’) Subsidy. 

5See e.g., CBOE Fees Schedule, Volume Incentive 

Program. Additionally, the Exchange notes 

Facilitation orders executed via AIM are not 

assessed transaction fees. 

6See NYSE Amex Options Fee Schedule (‘‘Fee 

Schedule’’), Market Access and Connectivity 

(‘‘MAC’’) Subsidy. 

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

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

9 Id. 

10 15 U.S.C. 78f(b)(4). 

11See NYSE Amex Options Fee Schedule, Market 

Access and Connectivity (‘‘MAC’’) Subsidy. 

to either a Participating TPH or a 

Participating Non-CBOE TPH). 

Participants in the ORS Program receive 

a payment from CBOE for every 

executed contract for simple orders 

routed to CBOE through their system. 

CBOE does not make payments under 

the ORS Program with respect to 

executed contracts in single-listed 

options classes traded on CBOE, or with 

respect to complex orders or spread 

orders. Participants in the CORS 

Program receive a payment from CBOE 

for every executed contract for complex 

orders routed to CBOE through their 

system. CBOE does not make payments 

under the CORS Program with respect to 

executed contracts in single-listed 

options classes traded on CBOE or with 

respect to simple orders. The Exchange 

currently pays a subsidy of $0.04 per 

contract for regular orders and a subsidy 

of $0.004 per contract for mini-options 

orders under both the ORS and CORS 

programs in order to subsidize 

Participants’ costs associated with 

providing order routing functionalities. 

The Exchange first proposes to 

eliminate the $0.04 per contract subsidy 

in both Programs and establish instead 

different subsidies for customer and 

non-customer orders. Specifically, the 

Exchange proposes to introduce a 

separate subsidy per contract for 

customer (C origin code) orders and 

increase the current subsidy per 

contract for all non-customer orders. 

The Exchange proposes to pay a subsidy 

of $0.02 per contract for all customer (C) 

orders and a subsidy of $0.06 per 

contract for all non-customer orders. 

The proposed change is applicable to 

both Programs. Additionally, the 

Exchange proposes to cease making 

payments under both Programs with 

respect to executed contracts in minioption classes. The Exchange no longer 

believes it is competitively necessary to 

incentivize the sending of mini-options 

to the Exchange and accordingly does 

not wish to offer a subsidy for minioptions under the ORS and CORS 

Programs. The Exchange notes that a 

similar subsidy program offered by 

NYSE Amex Options (‘‘Amex’’) also 

excludes mini-options.4

The Exchange next proposes to 

eliminate from the ORS and CORS 

Programs payment of subsidies for 

contracts executed via the Automated 

Improvement Mechanism (‘‘AIM’’). 

Contracts that execute via AIM already 

have an opportunity to earn various 

rebates and discounts and thus the 

Exchange believes it is appropriate to 

exclude AIM executions from the 

Programs.5 The Exchange notes that the 

subsidy program offered by Amex 

excludes contracts executed via Amex’s 

auction mechanism.6

Next, the Exchange seeks to eliminate 

Marketing and Billing Services Elections 

from the ORS Program. By way of 

background, a Participant of the ORS 

Program may elect to have CBOE 

perform certain additional marketing 

services on its behalf. If a Participant 

elected to have CBOE perform these 

services, the amount that CBOE would 

pay the Participant for orders routed to 

CBOE through the Participant’s system 

would be reduced from $0.04 per 

executed contract to $0.03 per executed 

contract. A Participant of the ORS 

Program can also elect to have CBOE 

perform the service of billing other 

CBOE TPHs with respect to the use of 

the Participant’s router. A Participant 

that elects to have CBOE perform this 

service would pay CBOE a service fee of 

one percent of the fees collected by 

CBOE for that TPH. The Exchange notes 

that currently there are no Participants 

that are using either election. The 

Exchange no longer wishes to offer 

either election and as such seeks to 

eliminate them from the ORS Program 

and Fees Schedule. The Exchange also 

notes that the CORS Program does not 

offer these optional services. 

Finally, the Exchange proposes to 

explicitly clarify in Footnote 30 that 

CBOE does not make payments under 

the CORS program with respect to 

executed contracts in single-listed 

option classes traded on CBOE. Such a 

statement is already included in 

Footnote 29, which governs the ORS 

Program, but was inadvertently not 

included in Footnote 30 when the CORS 

Program was adopted. The Exchange 

believes the proposed change will 

reduce potential confusion. 

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.7 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 8 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 

the Section 6(b)(5) 9 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange also believes the 

proposed rule change is consistent with 

Section 6(b)(4) of the Act,10 which 

requires that Exchange rules 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 Exchange believes 

the proposed amendments to the ORS 

and CORS Programs are reasonable 

because the proposed changes still 

afford Participants an opportunity to 

receive payments to subsidize the costs 

associated with providing certain order 

routing functionalities that would 

otherwise go unsubsidized. 

Additionally, the Exchange believes the 

increased $0.06 per contract subsidy for 

non-customer orders is reasonable 

because it is within the range of 

subsidies paid by another exchange 

under a similar subsidy program.11

The Exchange believes that limiting 

the subsidy payments to those that 

provide order routing functionalities is 

equitable and not unfairly 

discriminatory because the Participants 

of the Programs have devoted resources 

to provide the order routing 

functionalities. The Programs further 

encourages CBOE TPHs and brokerdealers that are not CBOE TPHs to 

provide order routing functionalities. 

In addition, the Exchange believes 

that the proposed changes are equitable 

and not unfairly discriminatory because 

the changes are applicable to all 

Participants and any CBOE TPH or 

broker-dealer that is not a CBOE TPH 

may continue to avail itself of the 

arrangements under the Programs, 

provided that their routing functionality 

incorporates the respective 

requirements of each Program. 

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62990 Federal Register / Vol. 79, No. 203 / Tuesday, October 21, 2014 / Notices 

12See e.g., CBOE Fees Schedule, Customer Large 

Trade Discount and Volume Incentive Program. 

13See Securities Exchange Act Release No. 71532 

(February 12, 2014), 79 FR 9563 (February 19, 2014) 

(SR–NYSEAmex–2014–12). 

14See supra note 5. 

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

16 17 CFR 240.19b–4(f). 17 17 CFR 200.30–3(a)(12). 

The Exchange also believes it is 

equitable and not unfairly 

discriminatory to establish separate 

subsidies for customer and noncustomer orders under the Programs. 

Particularly, the Exchange notes that 

customer orders already have the 

opportunity to earn various rebates, 

discounts or fee caps.12 As such, the 

Exchange believes it is fair and 

equitable to provide a lesser subsidy for 

customer orders as compared to noncustomer orders. The Exchange also 

notes that Amex does not provide a 

subsidy for any Customer volume under 

its MAC Subsidy Program.13

The Exchange believes the 

elimination of subsidies for minioptions under the Programs is 

reasonable, equitable and not unfairly 

discriminatory because the Exchange 

believes it is no longer competitively 

necessary to encourage the sending of 

mini-options to the Exchange and thus 

does not believe it’s necessary to 

provide a subsidy for mini-option 

orders. Additionally, as noted in the 

purpose section, Amex’s MAC Program 

also excludes mini-options. The 

Exchange believes it is equitable and not 

unfairly discriminatory to exclude AIM 

contracts from both Programs because, 

like customer orders, orders executed 

via AIM already have an opportunity to 

earn various rebates or discounts.14

The Exchange believes the 

clarification that the CORS Program 

excludes single-listed options will 

alleviate potential confusion. The 

alleviation of potential confusion will 

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. Finally, the Exchange believes 

the elimination of the Marketing and 

Billing Services Elections from the ORS 

Program is reasonable, equitable and not 

unfairly discriminatory because it 

merely eliminates optional services, 

which currently are not being used by 

any Participant. 

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. The 

Exchange does not believe that the 

proposed changes will impose an 

unnecessary burden on intramarket 

competition because they will apply 

equally to all participating parties. 

Although the subsidy for orders routed 

to CBOE through a Participant’s system 

only applies to Participants of the 

Programs, the subsidies are designed to 

encourage the sending of more orders to 

the Exchange, which should provide 

greater liquidity and trading 

opportunities for all market 

participants. Further, the Exchange does 

not believe that such changes will 

impose any burden on intermarket 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. The Exchange notes 

that, should the proposed changes make 

CBOE more attractive for trading, 

market participants trading on other 

exchanges can always elect to provide 

order routing functionality to CBOE. 

Additionally, to the extent that the 

proposed changes to the ORS and CORS 

Programs result in increased trading 

volume on CBOE and lessened volume 

on other exchanges, the Exchange notes 

that market participants trading on other 

exchanges can always elect to become 

TPHs on CBOE to take advantage of the 

trading opportunities. 

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 15 and paragraph (f) of Rule 

19b–4 16 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–2014–075 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–2014–075. 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– 

2014–075 and should be submitted on 

or before November 12, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–24942 Filed 10–20–14; 8:45 am] 

BILLING CODE 8011–01–P 

mstockstill on DSK4VPTVN1PROD with NOTICES