68740 Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Notices 

37 15 U.S.C. 78s(b)(3)(A). 

38 17 CFR 240.19b–4(f)(6). 

39 17 CFR 240.19b–4(f)(6)(iii). 

40 15 U.S.C. 78s(b)(1). 

41 15 U.S.C. 78s(b)(2)(B). 

42 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3SPY options are based on the SPDR exchangetraded fund (‘‘ETF’’), which is designed to track the 

performance of the S&P (Standard and Poors) 500 

Index. 

4PIXL is the Exchange’s price improvement 

mechanism known as Price Improvement XL or 

(PIXLSM). See Rule 1080(n). 

5The term ‘‘Customer’’ applies to any transaction 

that is identified by a member or member 

organization for clearing in the Customer range at 

The Options Clearing Corporation (‘‘OCC’’) which 

is not for the account of broker or dealer or for the 

account of a ‘‘Professional’’ (as that term is defined 

in Rule 1000(b)(14)). 

national securities exchanges further the 

purposes of the Act. 

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. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Pursuant to Section 19(b)(3)(A) of the 

Act 37 and Rule 19b–4(f) thereunder,38

CHX has designated this proposal as one 

that effects a change that (A) does not 

significantly affect the protection of 

investors or the public interest; (B) does 

not impose any significant burden on 

competition; and (C) by its terms, does 

not become operative for 30 days after 

the date of the filing, or such shorter 

time as the Commission may designate 

if consistent with the protection of 

investors and the public interest. The 

Exchange has also provided the 

Commission written notice of its intent 

to file the proposed rule change, along 

with a brief description and text of the 

proposed rule change, at least five 

business days prior to the date of filing 

of the proposed rule change, or such 

shorter time as designated by the 

Commission.39 Given that the proposed 

rule change clarifies existing rules, 

deletes obsolete rules and amends the 

functionality of the cross order type and 

Cross With Size order handling to be 

more restrictive than it is currently, the 

Exchange believes that this proposed 

rule filing qualifies for summary 

effectiveness. 

At any time within the 60-day period 

beginning on the date of filing this 

proposed rule change in accordance 

with the provisions of Section 19(b)(1) 

of the Act,40 the Commission summarily 

may temporarily suspend the change in 

the rules of the self-regulatory 

organization made thereby, 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 the furtherance of the 

purposes of the Act. If the Commission 

takes such action, the Commission shall 

institute proceedings under Section 

19(b)(2)(B) of the Act 41 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 proposal 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 No. SR– 

CHX–2014–18 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549. 

All submissions should refer to File 

No. SR–CHX–2014–18. 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 changes 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 CHX. 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 No. SR–CHX–2014– 

18 and should be submitted on or before 

December 9, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.42

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–27185 Filed 11–17–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73580; File No. SR–Phlx– 

2014–72] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

PIXL Executions in SPY and PIXL 

Pricing 

November 12, 2014. 

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 October 

31, 2014, 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to modify 

Section I entitled ‘‘Rebates and Fees for 

Adding and Removing Liquidity in 

SPY 3’’ and Section IV entitled ‘‘Other 

Transaction Fees’’ of the Phlx Pricing 

Schedule (‘‘Pricing Schedule’’). 

Specifically, the Exchange proposes to 

amend its Initiating Order Fee for PIXL 4

Executions in SPY and PIXL Pricing for 

Initiating Order that is contra to a 

Customer 5 PIXL order, to allow for 

volume discounts. While the changes 

proposed herein are effective upon 

filing, the Exchange has designated that 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Notices 68741 

6The term ‘‘Professional’’ means any person or 

entity that (i) is not a broker or dealer in securities, 

and (ii) places more than 390 orders in listed 

options per day on average during a calendar month 

for its own beneficial account(s). See Rule 

1000(b)(14). 

7The term ‘‘Firm’’ applies to any transaction that 

is identified by a member or member organization 

for clearing in the Firm range at The Options 

Clearing Corporation (‘‘OCC’’). 

8The term ‘‘Broker-Dealer’’ applies to any 

transaction which is not subject to any of the other 

transaction fees applicable within a particular 

category. 

9A ‘‘Specialist’’ is an Exchange member who is 

registered as an options specialist pursuant to Rule 

1020(a). 

10A ‘‘Market Maker’’ includes Registered Options 

Traders (Rule 1014(b)(i) and (ii)), which includes 

Streaming Quote Traders (See Rule 1014(b)(ii)(A)) 

and Remote Streaming Quote Traders (See Rule 

1014(b)(ii)(B)). Directed Participants are also market 

makers. 

11Currently, the Exchange has in place a four tier 

structure Customer Rebate Program at Section B of 

the Pricing Schedule which pays Customer rebates 

on four Categories (A, B, C and D) of transactions. 

The four tier structure pays rebates based on 

percentage thresholds of national customer 

multiply-listed options volume by month based on 

the same four Categories (A, B, C and D) of 

transactions. 

12The term ‘‘Common Ownership’’ shall mean 

members or member organizations under 75% 

common ownership or control. See Preface to the 

Pricing Schedule. 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(4), (5). 

15For September 2014, SPY Options accounted 

for approximately 14.76% of the overall equity and 

ETF options volume industry-wide (approximately 

12.30% of the overall Phlx volume). By comparison, 

the second most actively traded equity or ETF 

option is AAPL, which accounts for approximately 

7.80% of the overall equity and ETF options 

volume industry-wide (approximately 6.00% of the 

overall Phlx volume). 

16See the Chicago Board Options Exchange 

Incorporated’s Fees Schedule and the International 

Securities Exchange LLC. 

the amendments be operative on 

November 3, 2014. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://

nasdaqomxphlx.cchwallstreet.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 

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 purpose of this filing is to amend 

Section I entitled ‘‘Rebates and Fees for 

Adding and Removing Liquidity in 

SPY’’ and Section IV entitled ‘‘Other 

Transaction Fees’’ of the Pricing 

Schedule. Specifically, the Exchange 

proposes to amend the Initiating Order 

Fee (‘‘Order Fee’’) for PIXL Executions 

in SPY (‘‘SPY Pricing’’) and PIXL 

Pricing for Initiating Orders (‘‘PIXL 

Pricing’’) that is contra to a Customer 

PIXL order. This would allow for 

volume discounts for Professional,6

Firm,7 Broker-Dealer,8 Specialist 9 or 

Market Maker 10 orders that are contra to 

a Customer PIXL Order, such that the 

Initiating Order Fee will be reduced to 

$0.00 if the Customer PIXL Order is 

greater than 399 contracts. Today, the 

Initiating Order Fee for options 

overlying SPY is $0.05 per contract and 

is not specific to market participants. 

The Exchange believes that the 

proposed pricing will encourage market 

participants to send an even greater 

amount of orders to the Exchange 

through PIXL. 

Section IV of the Pricing Schedule 

specifies PIXL pricing for all other 

options, except SPY. Today, an 

Initiating Order is assessed $0.07 per 

contract or $0.05 per contract if the 

Customer Rebate Program 11 Threshold 

Volume defined in Section B is greater 

than 100,000 contracts per day in a 

month. Any member or member 

organization under Common 

Ownership 12 with another member or 

member organization that qualifies for a 

Customer Rebate Tier discount in 

Section B will receive the PIXL 

Initiating Order discount as described 

above. Today, the Initiating Order Fee 

for Professional, Firm, Broker-Dealer, 

Specialist and Market Maker orders that 

are contra to a Customer PIXL Order 

will be reduced to $0.00 if the Customer 

PIXL Order is greater than 999 contracts 

(‘‘volume discount’’). 

The Exchange proposes to amend 999 

contracts to 399 contracts in the volume 

discount. Section IV PIXL Pricing, as 

proposed, would state: ‘‘The Initiating 

Order Fee for Professional, Firm, 

Broker-Dealer, Specialist and Market 

Maker orders that are contra to a 

Customer PIXL Order will be reduced to 

$0.00 if the Customer PIXL Order is 

greater than 399 contracts.’’ 

For uniformity, the Exchange also 

proposes to add the same volume 

discount in Section I regarding SPY 

Pricing, so that an alternative to the 

Initiating Order fee of $0.05 per contract 

is indicated. Section I SPY Pricing, as 

proposed, would state: ‘‘The Initiating 

Order Fee for Professional, Firm, 

Broker-Dealer, Specialist and Market 

Maker orders that are contra to a 

Customer PIXL Order will be reduced to 

$0.00 if the Customer PIXL Order is 

greater than 399 contracts.’’ 

The Exchange believes that this 

amendment to PIXL pricing will 

encourage a greater number of PIXL 

Orders on the Exchange, thereby 

increasing liquidity. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend the Pricing Schedule 

is consistent with Section 6(b) of the 

Act 13 in general, and furthers the 

objectives of Section 6(b)(4) and (b)(5) of 

the Act 14 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees and other charges 

among members and issuers and other 

persons using any facility or system 

which Phlx operates or controls, and is 

not designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Exchange’s proposal to adopt 

new pricing for SPY is reasonable, 

equitable, and not unfairly 

discriminatory because pricing by 

symbol is a common practice on many 

U.S. options exchanges as a means to 

incentivize order flow to be sent to an 

exchange for execution in the most 

actively traded options classes. SPY 

options are currently the most actively 

traded equity or ETF option class.15

Other options exchanges price by 

symbol.16

The Exchange’s proposed volume 

discount for SPY Pricing is reasonable 

because the Exchange desires to 

incentivize market participants to 

transact a greater number of SPY 

options. The Exchange is offering a 

volume discount specific to SPY 

because, as previously mentioned, SPY 

options are currently the most actively 

traded options class and therefore the 

Exchange believes that incentivizing 

Professionals, Firms, Broker-Dealers, 

Specialists and Market Makers to add 

increased liquidity in SPY options and 

encouraging market participants to send 

order flow to the Exchange by adding a 

volume discount will benefit all market 

participants through increased liquidity, 

tighter markets and order interaction. 

The Exchange believes it is reasonable 

to assess lower fees to transact SPY 

options to Professionals, Firms, BrokerVerDate Sep<11>2014 17:27 Nov 17, 2014 Jkt 235001 PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 E:\FR\FM\18NON1.SGM 18NON1

tkelley on DSK3SPTVN1PROD with NOTICES
68742 Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Notices 

17The volume discount has been in place for 

more than a year. See Securities Exchange Act 

Release No. 69768 (June 14, 2013), 78 FR 37250 

(June 20, 2013) (SR–Phlkx–2013–61) [sic] (notice of 

filing and immediate effectiveness). 18 15 U.S.C. 78s(b)(3)(A)(ii). 

Dealers, Specialists and Market Makers 

because the Exchange seeks to 

incentivize these market participants to 

transact a greater number of SPY 

options. The Exchange would assess 

higher fees if the Customer PIXL Order 

is 399 contracts or less. 

The Exchange’s proposed new volume 

discount for SPY Pricing is equitable 

and not unfairly discriminatory. Today, 

the Exchange assesses a $0.05 per 

contract Initiating Order Fee for PIXL 

Executions in SPY (which apply to fees 

in Parts A and B). When the PIXL Order 

is contra to the Initiating Order, a 

Customer PIXL Order will be assessed 

$0.00 per contract and all other nonCustomer market participants will be 

assessed a $0.38 per contract fee when 

contra to an Initiating Order. Also, when 

the PIXL Order is contra to other than 

the Initiating Order, the PIXL Order will 

be assessed $0.00 per contract, unless 

the order is a Customer, in which case 

the Customer will receive a rebate of 

$0.38 per contract; all other contra 

parties to the PIXL Order, other than the 

Initiating Order, will be assessed a Fee 

for Removing Liquidity of $0.38 per 

contract or will receive the Rebate for 

Adding Liquidity. The Exchange is 

proposing to continue to assess the 

aforementioned fees, and is proposing to 

amend the volume discount. The 

Exchange believes that assessing lower 

Fees for Adding Liquidity, greater than 

399 contracts, will incentivize 

Professionals, Firms, Broker-Dealers, 

Specialists and Market Makers to 

interact with a greater number of 

Initiating Orders in SPY options on the 

Exchange through PIXL. The Exchange 

believes that it is equitable and not 

unreasonably discriminatory to assess 

the same fees for Initiating Orders in 

SPY options to all market participants 

based on volume, or liquidity provided 

to the Exchange. Creating incentives and 

attracting SPY Orders to the Exchange 

benefits all market participants through 

increased liquidity at the Exchange. A 

higher percentage of SPY Orders in 

PIXL leads to increased auctions and 

better opportunities for price 

improvement. 

In addition, the Exchange notes that 

the volume discount is currently in 

place for PIXL pricing. 

The Exchange believes that it is 

reasonable, equitable and not 

unreasonably discriminatory to reduce 

the threshold for the PIXL Pricing 

volume discount from 999 contracts to 

399 contracts. With this change in the 

volume discount,17 the Initiating Order 

Fee for Professional, Firm, BrokerDealer, Specialist and Market Maker 

orders that are contra to a Customer 

PIXL Order will be reduced to $0.00 if 

the Customer PIXL Order is greater than 

399 contracts. The volume discount will 

be applied uniformly to all according to 

liquidity brought to the Exchange. The 

Exchange would offer all market 

participants, other than Customers who 

are not assessed an Initiating Order Fee, 

an incentive to transact large sized 

orders in PIXL. The Exchange believes 

that the proposal will continue to attract 

liquidity, which benefits market 

participants and provides the 

opportunity for increased order 

interaction on the Exchange. 

The Exchange notes that in order to 

remain competitive, the Exchange must 

implement fees and rebates that are 

competitive with pricing at other 

options exchanges that offer a similar 

auction opportunity. SPY options and 

the PIXL electronic auction are an 

increasingly important and crucial 

segment of options trading. The goal is 

creating and increasing incentives to 

attract orders to the Exchange that will, 

in turn, benefit all market participants 

through increased liquidity at the 

Exchange. 

The proposal allows the Exchange to 

continue attracting liquidity to the 

Exchange. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange does not believe that the 

proposal creates a burden on intramarket competition because the 

Exchange is applying the same SPY 

option and PIXL Fees to all market 

participants in the same manner 

dependent on volume. 

The Exchange believes that the 

proposed new volume discount for SPY 

options and PIXL Fees creates 

additional opportunity for incentivizing 

Professionals, Firms, Broker-Dealers, 

Specialists and Market Makers to bring 

additional liquidity to the market. The 

Exchange believes that effectively 

assessing lower fees or paying rebates 

when a market participant brings a 

certain amount of orders in SPY and 

other options creates competition 

among market participants to remove 

liquidity from the Phlx Book. This 

competition does not create an undue 

burden on competition but rather offers 

all market participants the opportunity 

to receive the benefit of the pricing 

when transacting options. 

The Exchange’s proposal to reduce 

the threshold for the volume discount 

for all market participants transacting 

options on PIXL promotes competition 

in a highly liquid market and a highly 

liquid option, SPY. Today, PIXL and 

SPY pricing is proposed to incentivize 

Professionals, Firms, Broker-Dealers, 

Specialists and Market Makers Firms to 

enter Initiating Orders into the PIXL 

auction by offering an incentive to 

reduce the Initiating Order Fee. By 

expanding the opportunity to all market 

participants that pay an Initiating Order 

Fee to reduce those fees, the Exchange 

encourages competition among market 

participants to price improve the order. 

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. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Pursuant to Section 19(b)(3)(A)(ii) of 

the Act,18 the Exchange has designated 

this proposal as establishing or changing 

a due, fee, or other charge imposed by 

the self-regulatory organization on any 

person, whether or not the person is a 

member of the self-regulatory 

organization, which renders the 

proposed rule change effective upon 

filing. 

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 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: 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 222 / Tuesday, November 18, 2014 / Notices 68743 

19 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. 73354 

(October 15, 2014), 79 FR 203 (October 21, 2014) 

(SR–CBOE–2014–75). 

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– 

Phlx–2014–72 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–Phlx–2014–72. 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–Phlx– 

2014–72 and should be submitted on or 

before December 9, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–27212 Filed 11–17–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73575; File No. SR–CBOE– 

2014–084] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the Fees 

Schedule 

November 12, 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 November 

3, 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 amend its 

Fees Schedule, effective November 3, 

2014. The Exchange always strives for 

clarity in its rules and Fees Schedule, so 

that market participants may best 

understand how rules and fees apply. 

First, the Exchange proposes to remove 

obsolete language in Footnotes 29 and 

30. On October 1, 2014, the Exchange 

submitted a rule filing to amend its 

Order Router Subsidy (‘‘ORS’’) and 

Complex Order Router Subsidy 

(‘‘CORS’’) Programs (collectively 

‘‘Programs’’).3 In the filing, among other 

things, the Exchange proposed to cease 

making payments under both Programs 

with respect to executed contracts in 

mini-option classes. The Exchange 

however, inadvertently did not remove 

the following statement from Footnotes 

29 and 30: ‘‘For billing purposes, minioptions fees will be rounded to the 

nearest $0.01 using standard rounding 

rules.’’ As mini-options are no longer 

part of either Program, reference to how 

mini-option fees would be billed under 

the program is unnecessary. The 

Exchange proposes to remove the 

obsolete language, which will prevent 

potential confusion and maintain clarity 

in the Fees Schedule. 

The Exchange also proposes to amend 

its OHS (Order Handling System) Order 

Cancellation Fee (‘‘Cancel Fee’’). By way 

of background, the Exchange had 

established this fee to address various 

operational problems and recoup costs 

resulting from the practice of 

immediately following orders routed 

through the OHS with a cancel request. 

Currently, the executing Clearing 

Trading Permit Holder is charged $2.00 

for every public customer order (origin 

code ‘‘C’’) that it cancels through the 

OHS in any month where the total 

number of cancellations sent by the 

executing Clearing Trading Permit 

Holder is in excess of the number of 

public customer orders that the 

executing Clearing Trading Permit 

Holder executes in a month for itself or 

for a correspondent firm. Additionally, 

this fee does not apply: (i) if an 

executing Clearing Trading Permit 

Holder cancels less than 500 public 

customer orders through OHS in a 

month for itself or for a correspondent 

firm; (ii) to cancelled OHS orders that 

improve the Exchange’s prevailing bidoffer (BBO) market at the time the orders 

are received; (iii) to fill and cancellation 

activity occurring within the first one 

minute of trading following the opening 

of each options class, (iv) to complex 

order fills and cancels, (v) to unfilled 

Fill-or-Kill (FOK) orders, (vi) to unfilled 

Immediate-or-Cancel (IOC) orders, and 


tkelley on DSK3SPTVN1PROD with NOTICES