Document ID: SEC-2013-1033-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2013-06-07T04:00Z

[Federal Register Volume 78, Number 110 (Friday, June 7, 2013)]
[Notices]
[Pages 34421-34423]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-13505]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69681; File No. SR-CBOE-2013-056]

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

June 3, 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 May 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 the 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

[[Page 34422]]

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 recently amended its Fees Schedule to add to Footnote 
25 the statement that any Floor Broker Trading Permit Holder that 
executes an average of 15,000 customer open-outcry contracts per day 
(``CPD'') over the course of a calendar month in multiply-listed 
options classes will receive a rebate of $7,500 on that Floor Broker 
Trading Permit Holder's Floor Broker Trading Permit fees (the 
``Rebate'').\3\ Footnote 25 describes Floor Broker Trading Permit Fees 
and the Floor Broker Trading Permit Sliding Scale, and states that the 
Floor Broker Trading Permit Sliding Scale will be available for all 
Floor Broker Trading Permits held by affiliated Trading Permit Holders 
and TPH organizations.\4\ As such, the Exchange believed that it was 
implied that the trading volume of all Floor Broker Trading Permit 
Holders affiliated with a single TPH organization would be aggregated 
for the purposes of reaching the 15,000-contract threshold, and that 
each TPH organization would receive one $7,500 rebate (as opposed to a 
rebate for each affiliated Floor Broker Trading Permit Holder that 
reached the 15,000-contract threshold).
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    \3\ See Securities Exchange Act Release No. 69569 (May 14, 2013) 
(SR-CBOE-2013-049).
    \4\ See CBOE Fees Schedule, Footnote 25.
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    However, in an effort to make the Rebate program's details clear, 
the Exchange now proposes to add the following clarifying language to 
the end of Footnote 25: For purposes of determining the rebate, the 
qualifying volume of all Floor Broker Trading Permit Holders affiliated 
with a single TPH organization will be aggregated, and, if such total 
meets or exceeds the 15,000 customer open-outcry contracts per day 
threshold in multiply-listed options classes, that TPH organization 
will receive a single $7,500 rebate, regardless of the number of Floor 
Broker Trading Permits affiliated with that TPH organization. The 
purpose of aggregating the qualifying volume of all Floor Broker 
Trading Permit Holders affiliated with a single TPH organization is to 
make it easier for such TPH organizations that have a number of Floor 
Broker Trading Permit Holders affiliated with them to be able to reach 
the threshold. The purpose of stipulating that each TPH organization 
will receive a single rebate is to ensure that the Rebate program is 
economically viable for the Exchange.
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.\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 that aggregating 
the qualifying volume of all Floor Broker Trading Permit Holders 
affiliated with a single TPH organization is reasonable because it will 
allow more TPH organizations to reach the threshold and therefore 
receive the Rebate. The Exchange believes that this is equitable and 
not unfairly discriminatory because it will incentivize TPH 
organizations with affiliated Floor Broker Trading Permit Holders to 
encourage such Floor Broker Trading Permit Holders to transact more 
qualifying volume, which should increase volume, which would benefit 
all market participants (including Floor Broker Trading Permit Holders 
and TPH organizations with affiliated Floor Broker Trading Permit 
Holders who do not hit the 15,000 contracts-per-day threshold (indeed, 
this increased volume could make it possible for some such Floor 
Brokers and/or TPH organizations to hit the 15,000 contracts-per-day 
threshold)). The Exchange believes that it is reasonable to limit TPH 
organizations to receiving one $7,500 rebate per month because this is 
necessary to ensure that the Rebate program is economically viable for 
the Exchange. The Exchange believes that this limitation is equitable 
and not unfairly discriminatory because it applies to all qualifying 
TPH organizations.
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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

    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. CBOE does not believe that 
aggregating the qualifying volume of all Floor Broker Trading Permit 
Holders affiliated with a single TPH organization will impose any 
burden on intramarket competition that is not necessary or appropriate 
in furtherance of the purposes of the Act because it will incentivize 
TPH organizations with affiliated Floor Broker Trading Permit Holders 
to encourage such Floor Broker Trading Permit Holders to transact more 
qualifying volume, which should increase volume, which would benefit 
all market participants (including Floor Broker Trading Permit Holders 
and TPH organizations with affiliated Floor Broker Trading Permit 
Holders who do not hit the 15,000 contracts-per-day threshold (indeed, 
this increased volume could make it possible for some such Floor 
Brokers and/or TPH organizations to hit the 15,000 contracts-per-day 
threshold)). CBOE does not believe that limiting TPH organizations to 
receiving one $7,500 rebate per month will impose any burden on 
intramarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act because this limitation applies 
to all qualifying TPH organizations.
    CBOE 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 proposed changes 
only apply to Floor Brokers at CBOE. To the extent that aggregating the 
qualifying volume of all Floor Broker Trading Permit Holders affiliated 
with a single TPH organization proves attractive to market participants 
on other exchanges, such Floor Brokers or market participants may elect 
to become Floor Brokers or market participants at CBOE.

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) 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

[[Page 34423]]

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).
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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-2013-056 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-2013-056. 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-2013-056 and should be 
submitted on or before June 28, 2013.

    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. 2013-13505 Filed 6-6-13; 8:45 am]
BILLING CODE 8011-01-P