[Federal Register Volume 78, Number 175 (Tuesday, September 10, 2013)]
[Notices]
[Pages 55316-55318]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-21932]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70314; File No. SR-CBOE-2013-084]


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 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 Footnote 10 of the Fees Schedule to

[[Page 55317]]

state that contract volume resulting from any of the strategies defined 
in Footnote 13 will apply towards reaching the Liquidity Provider 
Sliding Scale (the ``LP Sliding Scale'') volume thresholds.\3\ This 
will put the strategy executions on the same footing as other 
transactions that count towards the LP Sliding Scale. Further, the 
Exchange believes this change will encourage the transaction of 
strategy executions. This would result in increased volume and provide 
greater liquidity, which would benefit all market participants (who 
could trade on the other side of these orders). While CBOE's previous 
practice had been to not apply contract volume resulting from any of 
the strategies defined in Footnote 13 towards the LP Sliding Scale (as 
such transactions apply towards fee caps on strategy executions as 
described in Footnote 13), the Exchange now believes that the incentive 
that such application would provide to Market-Makers to transact 
strategy executions outweighs any countervailing reasoning, as the 
Exchange recognizes that such transactions would provide greater 
liquidity for all market participants.
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    \3\ The strategies defined in Footnote 13 of the Fees Schedule 
are merger strategies, short stock interest strategies, reversals, 
conversions and jelly roll strategies. See Footnote 13 for 
definitions of each strategy.
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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.\4\ Specifically, the Exchange believes the proposed rule change is 
consistent with Section 6(b)(4) of the Act,\5\ 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. The Exchange believes that the proposed change to 
include contract volume resulting from strategy executions in the 
calculation of the LP Sliding Scale is reasonable because it will allow 
qualifying market participants who execute strategy transactions to 
benefit from the LP Sliding Scale for doing so. The Exchange believes 
that this is equitable and not unfairly discriminatory because it will 
apply to all market participants who qualify for the LP Sliding Scale. 
While the LP Sliding Scale only applies to Market-Makers, those market 
participants take on obligations, such as quoting obligations, that 
some other market participants do not take on. Further, the Exchange 
believes that this will incentivize qualifying market participants to 
engage in such strategy executions, and the resulting increase in 
volume will benefit all market participants. Finally, this will put the 
strategy executions on the same footing as other transactions that 
count towards the LP Sliding Scale.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 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 changes to include contract volume resulting from 
strategy executions in the calculation of the LP Sliding Scale will 
impose any burden on intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because they will 
apply to all market participants who qualify for the LP Sliding Scale. 
While the LP Sliding Scale only applies to Market-Makers, those market 
participants take on obligations, such as quoting obligations, that 
some other market participants do not take on. Further, the Exchange 
believes that this will incentivize qualifying market participants to 
engage in such strategy executions, and the resulting increase in 
volume will benefit all market participants. The Exchange does not 
believe that this will impose any burden on intermarket competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act because it only affects trading on CBOE. Further, to the extent 
that these changes may make CBOE a more attractive trading venue for 
market participants on other exchanges, such market participants may 
elect to become CBOE market participants.

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 \6\ and paragraph (f) of Rule 19-4 \7\ 
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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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 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-2013-084 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-2013-084. 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 offices of the Exchange. 
All comments received will be posted without change;

[[Page 55318]]

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-2013-084, and should be submitted on or before October 1, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-21932 Filed 9-9-13; 8:45 am]
BILLING CODE 8011-01-P