[Federal Register Volume 78, Number 175 (Tuesday, September 10, 2013)]
[Notices]
[Pages 55310-55312]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-21931]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70313; File No. SR-CBOE-2013-085]


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 4, 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 August 22, 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 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

[[Page 55311]]

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 exclude the Russell 2000 Index (``RUT'') 
from the Exchange's Volume Incentive Program (``VIP''). This would mean 
that RUT volume would not be included in the calculations used for 
determining VIP, nor would the Exchange pay out a credit for RUT 
trades. The reason for this proposed change is due to changing economic 
circumstances regarding RUT (including changed license fees (which are 
lower than those offered by other exchanges) \3\ and other effects of 
the new RUT licensing structure). The changed licensing structure for 
RUT makes it less economically feasible to include RUT in the VIP. 
Further, CBOE's competitive offering for RUT, including the trading of 
RUT over CBOE's Complex Order Book and the assessment of the Marketing 
Fee for RUT transactions \4\ as well as other economic circumstances 
regarding the trading of RUT, has caused CBOE to gain such market share 
that CBOE has deemed it unnecessary to offer the VIP's incentives in 
order to attract RUT volume (the purpose of the VIP is to attract 
volume via offering volume-based incentives). Unlike for other 
multiply-listed indexes traded at CBOE that are still included in the 
VIP, CBOE's competitive offering regarding RUT offers enough incentives 
to market participants wishing to trade RUT that including RUT in the 
VIP is unnecessary.
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    \3\ See SR-CBOE-2013-83, which increases the Exchange's RUT 
Surcharge Fee to $0.30 per contract, compared to SR-NYSEMKT-2013-65, 
which increased the NYSE MKT LLC (``AMEX'') Royalty Fee for RUT from 
$0.15 per contract to $0.40 per contract.
    \4\ See CBOE Fees Schedule, Marketing Fee table.
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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 Section 
6(b)(4) of the Act,\6\ which provides that Exchange rules may provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its TPHs and other persons using its facilities.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that excluding RUT from the VIP is reasonable 
because the VIP is a credit program, and excluding RUT from the VIP 
does not impose any extra fee for RUT trades, it just prevents them 
from incurring a credit (or counting towards incurring credits). As 
such, qualifying market participants trading RUT will merely be 
required to pay regular transaction fees. The Exchange believes that 
excluding RUT from the VIP is equitable and not unfairly discriminatory 
because the different licensing schemes for RUT (and all licensed 
products) make such products incomparable, and the changed licensing 
structure for RUT makes it less economically feasible to include RUT in 
the VIP. Further, CBOE's competitive offering for RUT, including the 
trading of RUT over CBOE's Complex Order Book and the assessment of the 
Marketing Fee for RUT transactions \7\ as well as other economic 
circumstances regarding the trading of RUT, has caused CBOE to gain 
such market share that CBOE has deemed it unnecessary to offer the 
VIP's incentives in order to attract RUT volume (the purpose of the VIP 
is to attract volume via offering volume-based incentives). Unlike for 
other multiply-listed indexes traded at CBOE that are still included in 
the VIP, CBOE's competitive offering regarding RUT offers enough 
incentives to market participants wishing to trade RUT that including 
RUT in the VIP is unnecessary.
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    \7\ See CBOE Fees Schedule, Marketing Fee table.
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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 excluding RUT from the VIP will impose any burden on intramarket 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act because the proposed change does not affect to whom 
the VIP applies. Further, the different licensing schemes for RUT (and 
all licensed products) make such products incomparable, and the changed 
licensing structure for RUT makes it less economically feasible to 
include RUT in the VIP. The Exchange does not believe that excluding 
RUT from the VIP is will impose any burden on intermarket competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act because this exclusion only applies to trading on CBOE, and the 
VIP only applies to 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 \8\ and paragraph (f) of Rule 19b-4 \9\ 
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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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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 [email protected]. Please include 
File Number SR-CBOE-2013-085 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-2013-085. This file 
number should be included on the subject line if email is used. To help 
the

[[Page 55312]]

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 offices 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-2013-085, and should be 
submitted on or before October 1, 2013.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-21931 Filed 9-9-13; 8:45 am]
BILLING CODE 8011-01-P