Document ID: SEC-2016-2246-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2016-12-20T05:00Z

[Federal Register Volume 81, Number 244 (Tuesday, December 20, 2016)]
[Notices]
[Pages 92925-92927]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-30565]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79560; File No. SR-CBOE-2016-081]

Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Move the Web Site and Vendor Through Which It 
Sells and Disseminates Open and Close Volume Data on the CBOE

December 14, 2016.
    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 9, 2016, 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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[[Page 92926]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    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 creates volume data for each Exchange-listed option 
that consists of opening buys and opening sells and closing buys and 
closing sells.\3\ This opening and closing position data is subdivided 
by origin code (i.e. customer or firm), and the customer data is 
further subdivided by order size. The volume data is summarized by day 
and series (symbol, expiration date, strike price, call or put). This 
volume data is referred to herein as the ``Open/Close Data.'' A fee 
schedule for the sale of Open/Close data was codified pursuant to a 
filing noticed [sic] on January 8, 2007.\4\
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    \3\ An opening buy is a transaction to create or increase a long 
position, and an opening sell is a transaction to create or increase 
a short position. A closing buy is a transaction to close out a 
short position, and a closing sell is a transaction to reduce or 
eliminate a long position.
    \4\ See Securities and Exchange Act Release No. 55062 (January 
8, 2007), 72 FR 2048 (January 17, 2007) (SR-CBOE-2006-088) [sic].
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Current Status
    Currently, Open/Close Data is provided to the vendor Intelligent 
Financial Systems, LTD (``IFS''). IFS hosts and supports a Web site for 
Market Data Express, LLC (``MDX''), a wholly owned subsidiary of the 
Exchange. The MDX Web site (MarketDataExpress.com) offers the Open/
Close Data for sale to CBOE Trading Permit Holders (``TPHs'') and non-
TPHs. The fees that MDX assesses for the Open/Close Data are set forth 
in a price list on MDX's Web site. TPHs and non-TPHs (together, 
``Customers'') are charged the same fees for the Open/Close Data.
    Customers may purchase Open/Close Data on a subscription basis or 
by ad hoc request. Daily Open/Close Data covering all CBOE securities 
may be purchased by subscribing to the Daily Update service at a cost 
of $600 per month. Subscribers to the Daily Update service receive 
access to a daily data file via download from MDX's Web site.
    Historical Open/Close Data covering all CBOE securities may be 
purchased on an ad hoc request basis. The charge for historical Open/
Close Data covering all CBOE securities is $7,200 per year for requests 
for one to four years of data. Requests for five or more years of 
historical Open/Close Data receive a 50% discount beginning with the 
fifth year of data (i.e., MDX charges $7,200 for each of the first four 
years of data and $3,600 for year five and each subsequent year of 
data).
    Alternatively, a Customer may purchase historical Open/Close Data 
on an individual CBOE security at a cost of $4.50 per security per 
month. This data is received via download from MDX's Web site. A 50% 
discount is applied for requests for ten or more years of data, 
beginning with the tenth year of data.
Proposed Change
    Development, Web site hosting, and customer support relating to the 
Open/Close data will be transferred to CBOE Livevol, LLC (``Livevol''), 
a wholly owned subsidiary of the Exchange's parent company, CBOE 
Holdings, Inc. CBOE will make Open/Close data available on the Livevol 
Data Shop Web site (datashop.cboe.com). Customer support will be 
transitioned from MarketDataExpress.com">Support@MarketDataExpress.com to support@livevol.com.
    Open/Close data (and customer support) will be available on both 
the MDX and Livevol Web sites during a transition period, which began 
on November 10, 2016 and is ending no later than January 31, 2017. At 
least two weeks prior to the end of the transition period, the Exchange 
will announce the end of the transition period via circular. At the end 
of the transition period, availability of the Open/Close data through 
the MDX Web site will be retired and the Open/Close data will only be 
available through the Livevol Web site. The fees related to the Open/
Close Data, including all applicable discounts, will remain the same 
during the transition period and once Open/Close data is available only 
through the Livevol Web site. The Exchange is changing the vendor and 
web address through which the Open/Close Data is purchased and 
disseminated and adopting a substantively identical fee schedule for 
Open/Close data on Livevol. At the end of the transition period, Open/
Close data will be removed from the MDX fee schedule.
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 the 
Section 6(b)(5) \7\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers. Finally, as discussed below, the Exchange believes 
the proposed rule change is consistent with Section 6(b)(4)8 of the 
Act, 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\ Id.
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    The proposed rule change addresses where and how Open/Close data is 
sold and disseminated. The Exchange believes the proposed rule change 
is equitable and does not permit unfair discrimination between 
customers, issuers, brokers or dealers, as the Open/Close Data will be 
available to all customers, including TPHs and other persons purchasing 
the data, at the same price and in the same manner. During and after 
the transition, the fees currently in place will continue to apply.

[[Page 92927]]

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

    The Exchange does not believe the proposed rule change will impose 
any burden on competition not necessary or appropriate in furtherance 
of the purposes of the Act. The proposed rule will have no impact on 
competition because there is no change to the fee. The proposed rule 
change is merely changing the Web site on which the data will be 
available for purchase and adopting a substantively identical fee 
schedule for the new Web site.

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 \9\ and paragraph (f) of Rule 19b-4 \10\ 
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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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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-2016-081 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CBOE-2016-081. 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-2016-081 and should be 
submitted on or before January 10, 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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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-30565 Filed 12-19-16; 8:45 am]
 BILLING CODE 8011-01-P