73940 Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Notices 

7 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Pursuant to Section 31 of the Securities 

Exchange Act of 1934, CBOE pays transaction fees 

to the SEC based on the volume of securities that 

are executed on the Exchange. The Sales Value Fee 

is the mechanism by which CBOE assesses the 

transaction fees to each TPH. 

4Trading ended on CBSX on April 30, 2014. See 

Securities Exchange Act Release No. 34–71880 

(April 4, 2014) (Notice) (SR–CBOE–2014–036). 

5See Rule 6.49A. 

6The term ‘‘affiliate’’ of or a person ‘‘affiliated 

with’’ another person means a person who, directly 

or indirectly, controls, is controlled by, or is under 

common control with, such other person. See Rule 

1.1(j). 

The term ‘‘control’’ means the power to exercise 

a controlling influence over the management or 

policies of a person, unless such power is solely the 

result of an official position with such person. Any 

person who owns beneficially, directly or 

indirectly, more than 20% of the voting power in 

the election of directors of a corporation, or more 

than 25% of the voting power in the election of 

directors of any other corporation which directly or 

through one or more affiliates owns beneficially 

more than 25% of the voting power in the election 

of directors of such corporation, shall be presumed 

to control such corporation. See Rule 1.1(k). 

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 NSCC and on NSCC’s Web site 

at http://dtcc.com/legal/sec-rulefilings.aspx. 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–NSCC– 

2014–12 and should be submitted on or 

before January 2, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–29105 Filed 12–11–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73788; File No. SR–CBOE– 

2014–089] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Revise the Sales 

Value Fee 

December 8, 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 

25, 2014, the 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 28, 

2014. Specifically, the Exchange 

proposes to enable the Exchange to 

collect the Sales Value Fee 3 (the ‘‘Fee’’) 

directly from Trading Permit Holders 

(‘‘TPHs’’) when the Fee is due pursuant 

to an on-floor position transfer between 

unaffiliated TPHs. In addition, the 

Exchange proposes to remove obsolete 

language related to the CBOE Stock 

Exchange, LLC (‘‘CBSX’’).4 Finally, the 

Exchange proposes to remove the 

regulatory review process related to the 

Position Transfer Fee. 

Currently, the Sales Value Fee is 

collected indirectly from TPHs through 

their clearing firms by OCC on behalf of 

CBOE. The OCC does not collect the Fee 

when an on-floor position transfer 5

takes place. The Exchange is proposing 

to collect the Fee directly from TPHs 

when there is an on-floor position 

transfer between unaffiliated TPHs. 

TPHs will be considered affiliated if one 

of the TPHs has ‘‘control’’ under Rule 

1.1(k) over another TPH.6

In addition, the Fees Schedule 

currently indicates that the Fee is 

assessed by CBOE to each TPH for the 

sale of securities when a sale in nonoption securities occurs on CBSX with 

respect to which CBOE is obligated to 

pay a fee to the SEC under Section 31 

of the Exchange Act or a sell order in 

non-option securities that is routed for 

execution at a market other than on 

CBSX, resulting in a covered sale on 

that market and an obligation of the 

routing broker providing Routing 

Services for CBSX to pay the related 

sales fee of that market. As noted above, 

CBSX is no longer active; therefore, the 

Exchange proposes to clarify that the 

Fee will be assessed by CBOE to TPHs 

for sales of securities when a sale in 

option securities occurs with respect to 

which CBOE is obligated to pay a fee to 

the SEC under Section 31 of the 

Exchange Act or when a sell order in 

option securities is routed for execution 

at a market other than CBOE, resulting 

in a covered sale on that market and an 

obligation of the routing broker 

providing Routing Services for CBOE, as 

described in CBOE Rule 6.14B, to pay 

the related sales fee of that market. 

Finally, the Exchange currently 

provides a service to TPHs seeking to 

make an off-floor position transfer 

pursuant to Rule 6.49A whereby a TPH 

can solicit CBOE to perform a 

‘‘regulatory review’’ of the potential 

transfer to determine whether the 

proposed transfer meets the off-floor 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Notices 73941 

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). 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f). 

position transfer provisions of Rule 

6.49A. The Exchange currently charges 

the initiating TPH a fee of $.02 per 

contract for the ‘‘regulatory review’’ 

with a cap of $25,000. The Exchange is 

proposing to eliminate the ‘‘regulatory 

review’’ program, as well as the 

associated fee. 

The Exchange is seeking an effective 

date of November 28, 2014 in order to 

sync the fee change with the CBOE 

billing cycle. For example, position 

transfers that occur on Friday, 

November 28, 2014 will settle on 

Monday, December 1, 2014. CBOE 

billing is applied upon settlement; 

therefore, on-floor position transfers that 

are subject to a Sales Value Fee that 

trade on November 28th will settle on 

December 1st and be assessed the Sales 

Value Fee during the December billing 

cycle. 

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 

that the proposed clarifications to the 

Fees Schedule will make the Fees 

Schedule easier to read and 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. The Fee allows the Exchange to 

recoup transaction fees that the 

Exchange pays to the SEC pursuant to 

Section 31 of the Securities Exchange 

Act, and the Exchange incurs the 

Section 31 fees because of the trading 

activity of TPHs. Therefore, the 

Exchange believes that it is reasonable 

and equitable to assess the Fee to TPHs. 

Additionally, the Exchange does not 

believe the proposed change is unfairly 

discriminatory as it applies equally to 

all TPHs that are performing on-floor 

position transfers between unaffiliated 

entities. 

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. CBOE does 

not believe that the proposed rule 

change will impose any burden on 

intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act because the 

proposed changes apply to all TPHs. 

The Exchange does not believe the 

proposed rule change will impose any 

burden on intermarket competition 

because it only applies to position 

transfers occurring on CBOE. 

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 11 and paragraph (f) of Rule 

19b–4 12 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–2014–089 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 

Number SR–CBOE–2014–089. 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–CBOE– 

2014–089 and should be submitted on 

or before January 2, 2015. 

mstockstill on DSK4VPTVN1PROD with NOTICES

73942 Federal Register / Vol. 79, No. 239 / Friday, December 12, 2014 / Notices 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6)(iii). 

5The term ‘‘Member’’ is defined as ‘‘any 

registered broker or dealer, or any person associated 

with a registered broker or dealer, that has been 

admitted to membership in the Exchange. A 

Member will have the status of a ‘‘member’’ of the 

Exchange as that term is defined in Section 3(a)(3) 

of the Act.’’ See Exchange Rule 1.5(n). 

6The Exchange’s affiliated exchanges are EDGA 

Exchange, Inc. (‘‘EDGA’’), BATS Exchange, Inc. 

(‘‘BATS’’), and BATS Y-Exchange, Inc. (‘‘BYX’’). 

7This service is an alternative to a service that the 

Exchange already provides to its Members—current 

order-sending Members route orders through access 

provided by the Exchange to the Exchange that 

either check the Exchange for available liquidity 

and then route to other destinations or, in certain 

circumstances, bypass the Exchange and route to 

other destinations. See Exchange Rule 11.9(b)(2) 

(setting forth routing options whereby Members 

may select their orders be routed to other market 

centers). 

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

9 15 U.S.C. 78f(b)(5). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–29180 Filed 12–11–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73780; File No. SR–EDGX– 

2014–28] 

Self-Regulatory Organizations; EDGX 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change to Rule 13.9 of EDGX 

Exchange, Inc. Related to 

Communication and Routing Service 

Known as ConnectEdge 

December 8, 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 

25, 2014, EDGX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange has 

designated this proposal as a ‘‘noncontroversial’’ proposed rule change 

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

Act 3 and Rule 19b–4(f)(6)(iii) 

thereunder,4 which renders it 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 Substance of 

the Proposed Rule Change 

The Exchange filed a proposal to 

amend Rule 13.9 related to a 

communication and routing service 

known as ConnectEdge. The Exchange 

also proposes to add fees related to 

ConnectEdge to its fee schedule. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at http://www.directedge.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 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 Exchange proposes to amend 

Rule 13.9 related to a communication 

and routing service known as 

ConnectEdge. The Exchange also 

proposes to add fees related to 

ConnectEdge to its fee schedule. The 

Exchange currently offers and proposes 

to continue offering ConnectEdge on a 

voluntary basis in a capacity similar to 

a vendor. ConnectEdge is a 

communication service that provides 

Members 5 an additional means to 

receive market data from and route 

orders to any destination connected to 

Exchange’s network. ConnectEdge does 

not provide any advantage to 

subscribers for connecting to the 

Exchange’s affiliates 6 as compared to 

other method of connectivity available 

to subscribers. The servers of the 

Member need not be located in the same 

facilities as the Exchange in order to 

subscribe to ConnectEdge. Members 

may also seek to utilize ConnectEdge in 

the event of a market disruption where 

other alternative connection methods 

become unavailable. 

Specifically, this service allows 

Members to route orders to other 

exchanges and market centers that are 

connected to the Exchange’s network. 

This communications or routing service 

would not effect trade executions and 

would not report trades to the relevant 

Securities Information Processor. An 

order sent via the service does not pass 

through the Exchange’s matching engine 

before going to a market center outside 

of the Exchange (i.e., a participant could 

choose to route an order directly to any 

market center on the Exchange’s 

network). A participant would be 

responsible for identifying the 

appropriate destination for any orders 

sent through the service and for 

ensuring that it had authority to access 

the selected destination; the Exchange 

would merely provide the connectivity 

by which orders (and associated 

messages) could be routed by a 

participant to a destination and from the 

destination back to the participant.7

The Exchange will charge a monthly 

connectivity fee to Members utilizing 

ConnectEdge to route orders to other 

exchanges and broker-dealers that are 

connected to the Exchange’s network. 

The amount of the connectivity fee 

varies based solely on the bandwidth 

selected by the Member. Specifically, 

the Exchange proposes to charge $350 

for 1 Mb, $700 for 5 Mb, $950 for 10 Mb, 

$1,500 for 25 Mb, $2,500 for 50 Mb, and 

$3,500 for 100 Mb. 

ConnectEdge would also allow 

participants to receive market data feeds 

from the exchanges connected to the 

Exchange’s network. In such case, the 

Member would pay the Exchange a 

connectivity fee, which varies and is 

based solely on the amount of 

bandwidth required to transmit the 

selected data product to the Member. 

The proposed connectivity fees are set 

forth in the Exhibit 5 attached hereto 

and range from $100 to $3,500 based on 

the market data product the vendor 

selects. The Members would pay any 

fees charged by the exchange providing 

the market data feed directly to that 

exchange. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with the 

requirements of Section 6(b) of the Act,8

in general, and Section 6(b)(5) of the 

Act,9 in particular, in that it promotes 

just and equitable principles of trade, 

removes impediments to, and perfect 

the mechanism of, a free and open 

market and a national market system, 

and, in general, protects investors and 

the public interest. Specifically, the 

mstockstill on DSK4VPTVN1PROD with NOTICES