Document ID: SEC-2017-0646-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: C2 Options Exchange, Inc.
Posted Date: 2017-04-21T04:00Z

[Federal Register Volume 82, Number 76 (Friday, April 21, 2017)]
[Notices]
[Pages 18790-18792]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-08061]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80473; File No. SR-C2-2017-015]

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

April 17, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934,\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on 
April 13, 2017, C2 Options Exchange, Incorporated (``Exchange'' or 
``C2'') 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 
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.\3\ Specifically, 
the Exchange is eliminating certain fees relating to the PULSe 
workstation. 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 the Exchange. Exchange Trading Permit 
Holders (``TPHs'') may also make workstations available to their 
customers, which may include TPHs, non-broker dealer public customers 
and non-TPH broker dealers.
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    \3\ The Exchange initially filed the proposed fee change on 
April 3, 2017 (SR-C2-2017-012). On April 13 [sic], 2017, the 
Exchange withdrew that filing and submitted this filing. The 
Commission notes that C2 withdrew C2-2017-012 on April 17, 2017.
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    The Exchange first proposes to eliminate the Away-Market Routing 
Intermediary fee. This fee is payable by a Routing Intermediary and 
only applicable for away-market routing from any PULSe workstation for 
which it serves as the Routing Intermediary. The fee is $0.02 per 
contract or share equivalent for the first million contracts or share 
equivalent executed in a month for executions on all away markets 
aggregated across all such PULSe workstations, and $0.03 per contract 
or share equivalent for each additional contract or share equivalent 
executed in the same month on all away markets.
    The Exchange also proposes to eliminate the C2 Routing fee. The C2 
Routing fee is payable by a TPH and only applicable for routing to C2 
from non-TPH PULSe workstations made available by the TPH. The fee is 
$0.02

[[Page 18791]]

per contract or share equivalent for the first 1 million contracts or 
share equivalent executed in a month on C2 that originate from non-TPH 
PULSe workstations made available by the TPH, and $0.03 per contract or 
share equivalent for each additional contract or share equivalent 
executed on C2 in the same month from the non-TPH PULSe workstations 
made available by the TPH. The Exchange notes it no longer wishes to 
assess these fees.
    Lastly, the Exchange proposes to eliminate the Routing Intermediary 
Inactivity fee. The Routing Intermediary Inactivity fee would be 
charged to a Routing Intermediary in the calendar year after the year 
in which the Routing Intermediary was charged the Routing Intermediary 
Certification Fee. The fee is $5,000/year less the aggregate amount of 
Away-Market Routing Intermediary and C2 Routing fees charged to a 
Routing Intermediary during that calendar year (if Routing Intermediary 
was charged less than an aggregate of $5,000 in Away-Market Routing 
Intermediary and C2 Routing fees that year).\4\ As the Exchange is 
eliminating both the Away-Market Routing Intermediary and C2 Routing 
fees and the inactivity fee is based in part on the amount of those 
fees assessed, the Exchange proposes to eliminate the inactivity fee as 
well.
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    \4\ The Exchange notes that in the filing that adopted the 
Routing Intermediary Inactivity fee, it inadvertently referenced the 
CBOE Routing fee instead of the C2 Routing Fee.
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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 the 
Section 6(b)(5) \6\ 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 facilitating 
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 
Section 6(b)(4) of the Act,\7\ 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.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes eliminating the Away-Market Routing 
Intermediary fee, C2 Routing fee and Routing Intermediary Inactivity 
fee is reasonable because market participants who would otherwise be 
subject to those fees will no longer be assessed the fees. The Exchange 
believes it's reasonable, equitable and not unfairly discriminatory 
because it applies uniformly to the applicable market participants 
(i.e., applies to all Routing Intermediaries and TPHs that make the 
PULSe workstations available to non-TPHs).

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule changes will 
impose any burdens on competition that are not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange 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 rule change 
to eliminate certain PULSe fees applies to all applicable users of the 
PULSe workstation. The Exchange does not believe that the proposed 
change will cause any unnecessary burden on intermarket competition 
because the proposed relates to use of an Exchange-provided order entry 
system. To the extent that any proposed change makes the Exchange a 
more attractive marketplace for market participants at other exchanges, 
such market participants are welcome to become Exchange market 
participants.

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 is effective upon filing pursuant to 
Section 19(b)(3)(A) \8\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \9\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such 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 under 
Section 19(b)(2)(B) \10\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \10\ 15 U.S.C. 78s(b)(2)(B).
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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-C2-2017-015 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-C2-2017-015. 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

[[Page 18792]]

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-C2-2017-015 and should be 
submitted on or before May 12, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2017-08061 Filed 4-20-17; 8:45 am]
BILLING CODE 8011-01-P