Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule
Federal Register, Volume 80 Issue 182 (Monday, September 21, 2015)
Federal Register Volume 80, Number 182 (Monday, September 21, 2015)
Notices
Pages 57026-57027
From the Federal Register Online via the Government Publishing Office www.gpo.gov
FR Doc No: 2015-23527
Page 57026
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SECURITIES AND EXCHANGE COMMISSION
Release No. 34-75923; File No. SR-CBOE-2015-075
Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule
September 15, 2015.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on September 2, 2015, Chicago Board Options Exchange, Incorporated (``Exchange'' or ``CBOE'') 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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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.
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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.
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Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
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Purpose
The Exchange proposes to amend the Fees Schedule. Specifically, the Exchange proposes to make changes to the Facility Fees section of the Fees Schedule and in particular, the Notes section associated with the Floor Broker Workstation (``FBW'') and Floor Broker Workstation 2 (``FBW2'') line-items. Pursuant to that section, the Exchange charges a Trading Permit Holder (``TPH'') a monthly fee of $400.00 per login ID per month for the use of a FBW or FBW2.\3\ Pursuant to the Fees Schedule, the Exchange assesses these facility fees in arrears during the first week of the following month. For example, a TPH will be billed in February for use of an FBW or FBW2 in January. Monthly fees are assessed and applied in their entirety and are not prorated.\4\ Consequently, a TPH that cancels an FBW or FBW2 login ID on January 3 will still be charged the $400.00 fee for all of January on the February bill.
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\3\ FBW and FBW2 are order management tools used by Floor Brokers to handle orders on the floor of the Exchange. FBW is a third-party facility of the Exchange. As provided in the Notes section of the FBW2 line-item, for every FBW login a TPH has, the FBW2 fee will be waived on a one-to-one basis for the months of July 2015 through September 2015.
\4\ See Fees Schedule, footnote 28.
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The Exchange proposes to make changes to the Facility Fees section of the Fees Schedule in the Notes of the FBW and FBW2 line-items to add that FBW and FBW2 login IDs will be renewed automatically for the next month unless the TPH submits written notification to the Market Operations Department by 3:00 p.m. CT on the second-to-last business day of the prior month.\5\ This change would be effective immediately and apply to FBW and FBW2 cancellations beginning September 1, 2015.\6\
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\5\ The proposed new language would read FBW and FBW2 ``login IDs will be renewed automatically for the next month unless the TPH submits written notification to the Market Operations Department by 3:00 p.m. CT on the second-to-last business day of the prior month to cancel the FBW or FBW2 login ID at or prior to the end of the applicable month.''
\6\ Effective September 1, 2015, FBW and FBW2 login IDs will be renewed automatically for the next month unless the Trading Permit Holder (TPH) submits written notification to the Market Operations Department by 3:00 p.m. (CT) on the second-to-last business day of the prior month. Requests for cancellation of logins for the FBW and FBW2 must be specified on the Exchange's new FBW Login Cancellation Form, which is being adopted concurrently with this filing and can be found at https://www.cboe.org/members/generalinfo/memberforms.aspx and emailed to fbwcancel@cboe.com by 3:00 p.m. (CT) two business days prior to the intended inactivation date. Please note that in addition to specifying whether the cancellation will apply to an FBW (legacy) login or FBW2, FBW and FBW2 users will be asked to specify whether the risk limits associated with the particular FBW or FBW2 login should be suspended as well. A copy of the new Floor Broker Workstation (FBW) Login Cancellation Form is attached as Exhibit 3 to this filing.
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Currently, the Fees Schedule makes clear that monthly fees are assessed and applied in their entirety and not prorated, but gives no time or day by which such cancellation must be received by the Exchange. Accordingly, so long as a work request is received before the end of the last second of the day before the end of the month, a TPH may cancel an FBW or FBW2 login ID for that month.\7\ As a third-party facility of the Exchange, however, cancellation requests received at the eleventh hour of the last day of the month cannot always be processed easily in time. Without ample time to decommission these logins, the Exchange is more susceptible to configuration and unauthorized access issues. The Exchange proposes this change to ensure that there is ample time for the Exchange to process such requests prior to the end of the month and ensure that cancellations are completed before the end of the month for which the TPH will be billed.
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\7\ FBW is being decommissioned on October 31, 2015.
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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.\8\ Specifically, 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 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) \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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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
\10\ Id.
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In particular, the Exchange believes that the proposal to require that FBW and FBW2 login IDs will be renewed automatically for the next month unless the TPH submits written notification to the Market Operations Department by 3:00 p.m. CT on the second-to-last business day of the prior month to
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cancel the FBW or FBW2 login ID effective at or prior to the end of the applicable month is equitable and not unfairly discriminatory as it applies to all TPHs that have an FBW or FBW2 login ID and wish to cancel an FBW or FBW2 login ID effective prior to the end of a month. The Exchange believes the proposed rule change protects investors and the public interest by helping the Exchange to more easily ensure that configuration and unauthorized access issues are averted. The Exchange believes that the proposed rule change is fair and reasonable because it only requires that TPHs have the aforethought to know how many login IDs they will need for the next month two business days prior to the end of each month and inform the Exchange at that time.
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Self-Regulatory Organization's Statement on Burden on Competition
The Exchange 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 rule changes will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed changes apply to all FBW and FBW2 users. Moreover, the Exchange does not believe that the $400.00 monthly charge that would apply to FBW and FBW sic users that do not submit written notification to the Market Operations Department by 3:00 p.m. CT on the second-to-last business day of the prior month to cancel the FBW or FBW2 login ID effective at or prior to the end of the applicable month is of a nature that is large enough to discourage the use of FBW or FBW2 or which would impose a burden on competition. The Exchange does not believe that the proposed rule changes will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because these changes apply to billing and fees that affect CBOE only, not other exchanges. Further, to the extent that the proposed changes ensure that configuration issues do not occur or affect Floor Brokers on the Exchange, such market participants may be more likely to operate on the Exchange.
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Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received written comments on the proposed rule change.
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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 \11\ and paragraph (f) of Rule 19b-4 \12\ 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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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f).
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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-2015-075 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-2015-075. 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-2015-075 and should be submitted on or before October 13, 2015.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
FR Doc. 2015-23527 Filed 9-18-15; 8:45 am
BILLING CODE 8011-01-P
