Document ID: SEC-2013-2224-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Stock Exchange, Inc.
Posted Date: 2013-12-26T05:00Z

[Federal Register Volume 78, Number 248 (Thursday, December 26, 2013)]
[Notices]
[Pages 78424-78426]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-30758]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71137; File No. SR-CHX-2013-22]

Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to 
Amend the Single-Sided Order Fees and Credits

December 19, 2013.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on December 18, 2013, the Chicago Stock Exchange, Inc. (``CHX'' or 
``Exchange'') filed with

[[Page 78425]]

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 self-regulatory organization. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    CHX proposes to amend its Schedule of Participant Fees and 
Assessments (the ``Fee Schedule'') to amend the Single-Sided Order Fees 
and Credits and the Order Cancellation Fee. The Exchange proposes to 
implement the fee changes on January 2, 2014. The text of this proposed 
rule change is available on the Exchange's Web site at http://www.chx.com/rules/proposed_rules.htm, 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 Exchange proposes to amend Section E.1 of the Fee Schedule, 
effective January 2, 2014. Specifically, the Exchange proposes to amend 
Section E.1 to set the Liquidity Providing Credit for all single-sided 
orders of 100 or more shares executed in the Matching System in Tape A, 
B, and C securities priced greater than or equal to $1.00/share at 
$0.0020/share. The Exchange does not propose to make any other 
amendments to the Fee Schedule.
Current Section E.1
    On July 1, 2013, the Exchange adopted current Section E.1 of the 
Fee Schedule,\4\ which applies to all single-sided orders of 100 or 
more shares executed in the CHX Matching System. Specifically, the 
Exchange set the Liquidity Providing Credit for all Tape A, B, and C 
securities priced greater than or equal to $1.00/share at $0.00250/
share and set the corresponding Liquidity Removing Fee at $0.0030/
share. In doing so, the Exchange unified pricing across all Tapes, 
eliminated the distinction between Derivative Securities Products and 
Non-Derivative Securities Products throughout the Fee Schedule and 
eliminated the distinction between ``Regular Trading Session'' and 
``Early or Late Trading Session'' in Section E.1 of the Fee 
Schedule.\5\
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    \4\ See Securities Exchange Act Release No. 69903 (July 1, 
2013), 78 FR 40788 (July 8, 2013) (SR-CHX-2013-12) (``Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change to Amend 
the Single-Sided Order Fees and Credits and the Order Cancellation 
Fee''); see also Securities Exchange Act Release No. 69903A (August 
13, 2013), 78 FR 49308 (August 13, 2013).
    \5\ Id.
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Proposed Section E.1
    The Exchange now proposes to reduce the Liquidity Providing Credit 
for all single-sided orders of 100 shares or more executed in the 
Matching System in Tape A, B, and C securities priced greater than or 
equal to $1.00/share from $0.00250/share to $0.0020/share. As such, the 
Exchange proposes to amend paragraph (b) under Section E.1 to replace 
``$0.00250/share'' with ``$0.0020/share.''
    However, the Exchange does not propose to change the corresponding 
Liquidity Removing Fee, which is currently $0.0030/share. In addition, 
for all single-sided orders of 100 or more shares executed in the CHX 
Matching System in securities priced less than $1.00/share, the 
Exchange will maintain the current Liquidity Providing Credit of 
$0.00009/share and the Liquidity Removing Fee of 0.30% of the trade 
value.
    Despite the proposed decrease in the Liquidity Providing Credit, 
the Exchange believes that a combination of the proposed Liquidity 
Providing Credit and the Exchange's recently-adopted Market Data 
Revenue Rebates program \6\ will continue to incentivize activity by 
Participants on the Exchange's trading facilities, encourage order 
flow, and allow the Exchange to remain competitive in today's orders 
marketplace.
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    \6\ See Section P of the Fee Schedule; see also Securities 
Exchange Act Release No. 70546 (October 3, 2013), 78 FR 61413 
(September 27, 2013) (``Notice of Filing and Immediate Effectiveness 
of Proposed Rule Change to Adopt a Market Data Revenue Rebates 
Program'').
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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 Section 6(b)(4) of the Act \8\ in particular, in that it 
provides for the equitable allocation of reasonable dues, fees and 
other charges among members and other persons using any facility or 
system which the Exchange operates or controls, and does not unfairly 
discriminate between customers, issuers, or broker dealers.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).
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    Specifically, since the proposed Liquidity Providing Credit will 
continue to apply to all single-sided orders of 100 or more shares 
executed in the CHX Matching System and the corresponding Liquidity 
Removing Fee will remain unchanged, the Exchange believes that the 
proposed Section E.1 will equitably allocate credits and fees among 
Participants in a non-discriminatory nature. Furthermore, the proposed 
Liquidity Providing Credit of $0.0020/share is reasonable, where the 
proposed value is similar to liquidity credits offered by other 
exchanges, such as NASDAQ.\9\
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    \9\ NASDAQ ``Rebate to Add Displayed Liquidity, Shares Executed 
at or Above $1.00'' ranges from $0.0020/share to $0.00305/share.
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    The Exchange notes that it operates in a highly competitive market 
in which market participants can readily favor competing venues. In 
such an environment, the Exchange must continually review, and consider 
adjusting, its fees and credits to remain competitive with other 
exchanges. For the reasons described above, the Exchange believes that 
the proposed rule change reflects this competitive environment.

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 that is not necessary or appropriate 
in furtherance of the purposes of the Act. Specifically, the proposed 
Liquidity Providing Credit will contribute to the protection of 
investors and the public interest by maintaining the simplified 
schedule of credits paid and fees assessed by the Exchange, as it will 
be applied to all single-sided orders of 100 shares or more executed in 
the Matching System in Tape A, B, and C securities priced greater than 
or equal to $1.00/share. Moreover, the combination of the proposed 
Liquidity Providing Credit

[[Page 78426]]

and Market Data Revenue Rebates will continue to incentivize order 
senders to submit orders to the Exchange, which will, in turn, enhance 
competition amongst competing trading centers and contribute to the 
production of investors and the public interest.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A)(ii) of the Act \10\ and subparagraph (f)(2) of Rule 
19b-4 thereunder \11\ because it establishes or changes a due, fee, or 
other charge imposed by the Exchange.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
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    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.
    As fully discussed above, the Exchange believes that the proposed 
Fee Schedule will create equable credit and fee amounts to incent 
activity among all Participants within the Exchange's trading 
facilities.

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-CHX-2013-22 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-CHX-2013-22. 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 20549-1090, 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 offices of 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 Number SR-CHX-2013-22, 
and should be submitted on or before January 16, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-30758 Filed 12-24-13; 8:45 am]
BILLING CODE 8011-01-P