Document ID: SEC-2015-0194-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2015-02-02T05:00Z

[Federal Register Volume 80, Number 21 (Monday, February 2, 2015)]
[Notices]
[Pages 5608-5609]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-01861]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74143; File No. SR-CBOE-2015-006]

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

January 27, 2015.
    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 January 14, 2015, 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.
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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.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.\3\ The Exchange 
currently assesses a Customer Priority Surcharge for VIX and VXST 
options that are executed electronically.\4\ More specifically, the 
Customer Priority Surcharge for VIX and VXST is assessed on all 
Customer (C) VIX and VXST contracts executed electronically that are 
Maker and not Market Turner. Additionally, the Surcharge is only 
assessed on such contracts that have a premium of $0.11 or greater. The 
Exchange has learned of a technical and billing issue that prevents the 
effective assessment of the Surcharge to complex orders. As such, the 
Exchange proposes to waive the Surcharge for VIX and VXST complex 
orders pending resolution \5\ of the abovementioned billing issue.\6\
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    \3\ The Exchange initially filed the proposed fee change on 
January 2, 2015 (SR-CBOE-2015-003). On January 14, 2015, the 
Exchange withdrew that filing and submitted this filing.
    \4\ The current Surcharge is $0.10 per contract for VIX and 
$0.05 per contract for VXST for contracts that have a premium of 
$0.11 or greater (see CBOE Fees Schedule, Customer Priority 
Surcharge).
    \5\ Upon resolution of the technical and billing issue, the 
Exchange will submit a rule filing to reinstate the Surcharge for 
complex orders in VIX and VXST.
    \6\ The Exchange notes that the technical and billing issue does 
not affect SPXW and as such, the proposed waiver does not apply to 
SPXW (i.e., the Priority Surcharge will continue to be assessed for 
complex orders in SPXW).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the

[[Page 5609]]

Securities Exchange Act of 1934 (the ``Act'') [sic] 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 Section 
6(b)(4) of the Act,\8\ which provides that Exchange rules may provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its Trading Permit Holders and other persons using its 
facilities. Additionally, the Exchange believes the proposed rule 
change is consistent with the Section 6(b)(5) \9\ 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. The Exchange believes the proposed rule change is consistent 
with the Section 6(b)(5)\10\ requirement that the rules of an exchange 
not be designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ Id.
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    In particular, the Exchange believes that waiving the Surcharge for 
VIX and VXST complex orders is reasonable, equitable and not unfairly 
discriminatory because it is waiving a fee that is currently subject to 
a billing issue and the waiver applies to all Trading Permit Holders. 
The Exchange believes it is equitable and not unfairly discriminatory 
to temporarily waive the Surcharge for complex orders and not simple 
orders because the electronic complex order book has a different order 
flow demographic and market model than that for simple orders. Further, 
the Exchange notes that other exchanges currently offer different 
pricing for complex orders than for simple orders.\11\ Additionally, 
waiving the Surcharge for complex orders pending resolution of the 
technical and billing issue eliminates potential misassessment of a fee 
and eliminates confusion, thereby removing impediments to and 
perfecting the mechanism for a free and open market system, and in 
general, protecting investors and the public interest.
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    \11\ See e.g., International Securities Exchange, LLC (``ISE'') 
Schedule of Fees, Section IV and also C2 Fees Schedule, Section 1C 
and 1D.
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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. The Exchange does not believe 
that the proposed changes impose any burden on intramarket competition 
as the waiver of the Surcharge applies to all Trading Permit Holders. 
As such, the proposed changes are equitable among all market 
participants and are not unfairly discriminatory. Additionally, the 
proposed change merely addresses a technical and billing issue on CBOE. 
To the extent that the proposed change makes CBOE a more attractive 
marketplace for market participants at other exchanges, such 
participants are welcome to become CBOE 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 has become effective pursuant to Section 
19(b)(3)(A) of the Act \12\ and paragraph (f) of Rule 19b-4 \13\ 
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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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f).
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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-CBOE-2015-006 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-CBOE-2015-006. 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-CBOE-2015-006 and 
should be submitted on or before February 23, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-01861 Filed 1-30-15; 8:45 am]
BILLING CODE 8011-01-P