[Federal Register Volume 78, Number 246 (Monday, December 23, 2013)]
[Notices]
[Pages 77516-77518]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-30440]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71089; File No. SR-CBOE-2013-119]


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

December 17, 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 December 9, 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 of its CBOE Stock 
Exchange (``CBSX''). 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.

[[Page 77517]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The CBSX Fees Schedule provides for different fee tiers for Maker 
executions in transactions in all other securities priced $1 or greater 
depending on the percentage of TCV that the Maker adds of liquidity in 
a given day.\3\ Prior to December 9, 2013, odd lot trades (trades of 
less than 100 shares) have not been reported by stock exchanges or 
eligible trade reporting facilities to the Consolidated Tape 
Administration and UTP Plan, and therefore were not counted, recorded 
or reported in the trade reports created by those regimes. As such, odd 
lot trades would not have been counted towards ``TCV'' by CBSX, as 
``TCV'' is defined as ``total consolidated volume calculated as the 
volume reported by all exchanges and trade reporting facilities to a 
consolidated transaction reporting plan.'' Odd lot trades executed by 
Makers on CBSX, however, did count towards those Makers' percentages of 
TCV contributed (meaning that such trades helped the Makers as they 
counted towards their numerators but were not counted in the 
denominator that determines their percentages).
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    \3\ See CBSX Fees Schedule, Section 1. ``TCV'' means total 
consolidated volume calculated as the volume reported by all 
exchanges and trade reporting facilities to a consolidated 
transaction reporting plan. Volume from Maker executions in the 
Select Symbols (priced $1 or greater) will count towards a market 
participant's % of TCV.
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    Beginning on December 9, 2013, odd lot trades will begin to be 
reported to the Consolidated Tape Administration and UTP Plan, and 
therefore will be counted, recorded and reported in the trade reports 
created by those regimes. This means that such trades would be included 
in the ``TCV'' denominator. However, CBSX proposes to exclude volume 
from odd lot transactions through January 31, 2014 from the calculation 
of TCV (and therefore from counting towards the denominator in the 
calculation of which Maker fee tiers). CBSX publishes the TCV 
calculation on CBSX's Web site each day, and would simply subtract odd 
lot trades from the total volume reported by all exchanges and trade 
reporting facilities to a consolidated transaction reporting plan. This 
will give market participants time to adjust their trading behavior to 
account for the inclusion of odd lot trades in TCV, and can only be of 
benefit to CBSX market participants (since odd lot trades count towards 
their percentages (the numerator) of TCV).
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 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. CBSX believes that the proposed change is 
reasonable because it can only serve to help market participants have a 
higher percentage of TCV (and thereby be assessed lower transaction 
fees). CBSX believes that the proposed change is equitable and not 
unfairly discriminatory because it will apply to all CBSX market 
participants. Indeed, not including odd lot trades towards TCV could 
make it easier for market participants to continue to reach higher 
volume (and lower fee) tiers, thereby encouraging such market 
participants to engage in more trading at CBSX. This increased volume 
and liquidity could benefit all market participants. Further, the 
exclusion of odd lots from TCV should benefit all market participants 
by keeping TCV lower, making it easier for all CBSX market participants 
to reach higher volume (and lower fee) tiers.
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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

    CBSX 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. CBSX does not believe that the 
proposed rule change will impose any burden on intramarket competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act because the lower TCV number (that excludes odd lot 
transactions) will apply to all market participants. CBSX 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 change only 
applies to trading on CBSX. Indeed, this lower TCV number could 
encourage more trading on CBSX. Further, the proposed change is merely 
a continuation of the current calculation of TCV. To the extent that 
the proposed change makes CBSX a more attractive market to market 
participants at other exchanges, such market participants may elect to 
become CBSX 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 19b-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-2013-119 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-2013-119. 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/

[[Page 77518]]

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-2013-119 and should be submitted on or before January 13, 2014.

    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. 2013-30440 Filed 12-20-13; 8:45 am]
BILLING CODE 8011-01-P