Document ID: SEC-2014-0071-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: C2 Options Exchange, Inc.
Posted Date: 2014-01-15T05:00Z

[Federal Register Volume 79, Number 10 (Wednesday, January 15, 2014)]
[Notices]
[Pages 2737-2738]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-00606]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71278; File No. SR-C2-2013-043]

Self-Regulatory Organizations; C2 Options Exchange, Incorporated; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Amend the Fees Schedule

January 9, 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 December 30, 2013, C2 Options Exchange, Incorporated (the 
``Exchange'' or ``C2'') 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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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.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 amend its Fees Schedule with regard to 
PULSe Workstation routing (specifically, with regard to routing from 
one PULSe Workstation to another). By way of background, the PULSe 
workstation is a front-end order entry system designed for use with 
respect to orders that may be sent to the trading systems of C2. In 
addition, the PULSe workstation provides a user with the capability to 
send options orders to other U.S. options exchanges and/or stock orders 
to other U.S. stock exchanges and trading centers \3\ (``away-market 
routing'').\4\ PULSe Workstation users also have the capability to send 
orders between PULSe workstations. For example, a user is able to send 
an order from a PULSe workstation located in New York to a PULSe 
workstation located in Chicago. The ability to send orders ``PULSe-to-
PULSe'' is available for use within a TPH (and any Non-TPHs to whom the 
TPH makes the PULSe workstation available) and between TPHs that use 
the PULSe workstation. A TPH may establish a PULSe-to-PULSe connection 
with another TPH by contacting C2, who will permission the connection. 
Before setting up the connection, both TPHs need to acknowledge in 
writing (e.g., including via email) their agreement to establish the 
mutual connection.
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    \3\ A ``trading center,'' as provided under Rule 600(b)(78) of 
Regulation NMS, 17 CFR 242.600(b)(78), means a national securities 
exchange or national securities association that operates an SRO 
trading facility, an alternative trading system, an exchange market 
maker, an OTC market maker, or any other broker or dealer that 
executes orders internally by trading as principal or crossing 
orders as agent.
    \4\ For a more detailed description of the PULSe workstation and 
its other functionalities, see, e.g., Securities Exchange Act 
Release Nos. 63246 (November 4, 2010) 75 FR 69478 (November 12, 
2010) (SR-C2-2010-007), 65279 (September 7, 2011), 76 FR 56824 
(September 14, 2011) (SR-C2-2011-020), 65482 (October 4, 2011), 76 
FR 62879 (October 11, 2011) (SR-C2-2011-028), and 69991 (July 16, 
2013), 78 FR 43956 (July 22, 2013) (SR-C2-2013-026).
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    The Exchange hereby proposes to impose a monthly PULSe-to-PULSe 
Routing fee of $50 for each receiving TPH. This means that each TPH 
with a PULSe Workstation that elects to receive orders from another 
PULSe Workstation will be assessed this fee. The Exchange proposes to 
assess the fee to cover costs associated with the development of PULSe-
to-PULSe routing, as well as the upkeep of such systems. The Exchange 
proposes to assess the fee to the receiving TPH because, by electing to 
receive PULSe-to-PULSe orders, the receiving TPH then gets the ability 
to execute those orders on the Exchange.
    The proposed change is to take effect on January 1, 2014.
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.\5\ Specifically, the 
Exchange believes the proposed rule change is consistent with Section 
6(b)(4) of the Act,\6\ 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. The Exchange believes the imposition of the PULSe-to-PULSe 
Routing Fee is reasonable because it is intended to cover the costs 
associated with the development of PULSe-to-PULSe routing, as well as 
the upkeep of such systems. The Exchange believes that it is equitable 
and not unfairly discriminatory because it will be assessed to all 
receiving TPHs that elect to receive PULSe-to-PULSe orders. The 
Exchange proposes to assess the fee to the receiving TPH because, by 
electing to receive PULSe-to-PULSe orders, the receiving TPH then gets 
the ability to execute those orders on the Exchange.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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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. C2 does not believe that the 
proposed rule change will impose any burden on intramarket

[[Page 2738]]

competition that is not necessary or appropriate in furtherance of the 
purposes of the Act because the PULSe-to-PULSe Routing Fee will be 
assessed to all receiving TPHs that elect to receive PULSe-to-PULSe 
orders. C2 does not believe that the proposed rule change will impose 
any burden on intermarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because the fee 
only applies to PULSe-to-PULSe routing, and is not designed for 
competitive reasons or to affect competition between exchanges.

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 \7\ and paragraph (f)(2) of Rule 19b-4 \8\ 
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.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(2).
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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-C2-2013-043 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-C2-2013-043. 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-C2-2013-043 and should be 
submitted on or before February 5, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-00606 Filed 1-14-14; 8:45 am]
BILLING CODE 8011-01-P