Document ID: SEC-2013-0431-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2013-03-05T05:00Z

[Federal Register Volume 78, Number 43 (Tuesday, March 5, 2013)]
[Notices]
[Pages 14390-14392]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-04992]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69000; File No. SR-CBOE-2013-023]

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

February 27, 2013.
    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 February 20, 2013, 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

[[Page 14391]]

the Exchange's Office of the Secretary, and at the Commission.

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 the 
data reports it provides to Trading Permit Holders (``TPHs''), Options 
Clearing Company (``OCC'') firms and other interested parties at their 
requests. These persons and organizations often approach the Exchange 
and request that the Exchange prepare and provide various reports 
regarding their trading activity. The production of these reports 
sometimes requires that CBOE employees put in a significant amount of 
time and work to write and develop the programs necessary to be able to 
run or generate such reports. Currently, the Fees Schedule merely 
states that ``Ad Hoc Information Services Requests'' are provided at 
production costs, that ORS Analysis, Floor Efficiency Project or Market 
Penetration Reports are assessed a monthly fee of $100, and that ABIL 
Brokerage Billing are assessed a fee of $0.005 per contract (on a 
monthly basis, with a minimum of $50 and a maximum of $200 per month). 
The Exchange proposes to eliminate these statements and replace them 
with a more comprehensive, consistent and standard structure regarding 
the provision of Exchange data reports (including those being deleted).
    The Exchange proposes to establish three different tiers of data 
report requests. The first, most basic tier (referred to as ``C Level'' 
requests) will regard requests for standard reports regularly generated 
and run by the Exchange and made available on a daily, weekly or 
monthly basis (for example, Monthly LP Scorecard, Daily Firm Report, 
etc.) that do not require historical data generation, customization 
beyond a standard format (PDF, HTML, etc.) or distribution frequency 
(daily, weekly, monthly, etc.), or specialized development. There will 
be no cost for such requests, regardless of whether they are one-time, 
initial, or daily, weekly, or monthly requests.
    The second tier (referred to as ``B Level'' requests) will regard 
initial report requests (or enhancements to existing report 
subscriptions) that require less than one (1) man-hour to develop and/
or generate. The [sic] will be no cost for such requests. The third 
tier (referred to as ``A Level'' requests) will regard initial report 
requests (or enhancements to existing subscriptions) that require one 
(1) or more man-hours to develop and/or generate. The cost for such 
requests will be $100 for first 5 man-hours and $100 per hour for each 
additional man-hour. Fees for reports will be estimated in advance and 
such estimates will be provided to the requester. If the estimate 
changes once creation of the report begins, a revised estimate will be 
provided to the requester. For parties requesting to receive B or A 
Level reports on a recurring basis, subscriptions to such reports will 
be provided at a cost of $100 per month for monthly reports and $200 
per month for daily or weekly reports.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\3\ Specifically, the Exchange believes the proposed rule change is 
consistent with Section 6(b)(4) of the Act,\4\ 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 that the proposed 
new fee structure for data reports is reasonable because it is designed 
to reflect the Exchange's costs in creating such reports. The Exchange 
believes that the proposed new fee structure for data reports is 
equitable and not unfairly discriminatory because it will apply to all 
requesting parties equally. The Exchange believes it is equitable and 
not unfairly discriminatory to assess no fees for C Level reports 
because these are standard reports that do not require specific 
development, customization or generation. The Exchange believes that it 
is equitable and not unfairly discriminatory to assess no fees for 
initial B Level requests because these reports do not require very much 
(less than one man-hour) work on the Exchange's part to create and 
produce. The Exchange believes that it is equitable and not unfairly 
discriminatory to assess a fee of $100 for the first five man-hours of 
work for A Level requests because these reports take at least one man-
hour of work on the Exchange's part to develop and generate and the 
Exchange must begin to recoup the costs of such work, while still 
desiring to be able to provide requesting market participants with a 
reasonable amount of information to assist them. The Exchange believes 
that it is equitable and not unfairly discriminatory to assess a fee of 
$100 per man-hour above five hours for A Level requests because such 
requests can take up a significant amount of Exchange resources and at 
this point the Exchange must begin to be more fully-compensated for 
dedicating resources to these tasks. The Exchange believes that it is 
equitable and not unfairly discriminatory to assess subscription fees 
for requests for information on a more regular basis (as opposed to re-
assessing the initial fees) because the development for such work has 
already been done.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(4).
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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 fees structure will impose an unnecessary burden on 
intramarket competition because it will apply equally to all requesting 
parties. The Exchange does not believe that the proposed fees structure 
will impose an unnecessary burden on intermarket competition because 
the Exchange is providing reports specific to activity on CBOE, and 
other exchanges may provide reports specific to activity on those 
exchanges, and the costs for development, generation and production of 
such reports may be different on those exchanges. Further, to the 
extent that the proposed fees structure for data reports may attract 
market participants on other exchanges to CBOE, such market 
participants can always elect to become CBOE market participants [sic].

[[Page 14392]]

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 \5\ and paragraph (f) of Rule 19b-4 \6\ 
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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    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 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-2013-023 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-CBOE-2013-023. 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 such 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-2013-023, and should be 
submitted on or before March 26, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-04992 Filed 3-4-13; 8:45 am]
BILLING CODE 8011-01-P