[Federal Register Volume 79, Number 71 (Monday, April 14, 2014)]
[Notices]
[Pages 20945-20946]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-08282]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71899; File No. SR-CBOE-2014-031]


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

April 8, 2014.
    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 March 28, 2014, 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 its Fees Schedule. First, the 
Exchange proposes to adopt a fee of $50 per month per login ID for 
PULSe Workstation users that elect to access a COB Feed.\3\ The COB 
Feed provides data (which has already been otherwise-available to PULSe 
Workstation users) on a data feed that specifically provides COB data. 
In order to improve the provision of this COB data, the Exchange has 
recently contracted an outside vendor to provide the COB Feed. The 
Exchange proposes to assess the new COB Feed Fee in order to recoup 
costs associated with the provision of the COB Feed. The Exchange does 
not propose to assess the COB Feed Fee to PULSe Workstation users on 
the Exchange trading floor. On-floor PULSe Workstation users must use 
PULSe Workstations using Exchange-provided hardware, for which such 
users pay a fee. Off-floor PULSe Workstation users, in contrast, are 
able to use PULSe Workstations using their own hardware (for which they 
do not pay the Exchange). Further, for off-floor PULSe Workstation 
users, the Exchange must expend resources in order to permission their 
IP addresses to access PULSe servers (which requires the Exchange to 
modify its firewall each time an off-floor PULSe user is permissioned), 
and off-floor PULSe Workstation users are not assessed a fee for this 
process. The Exchange also would like to encourage on-floor trading 
activity, as the Exchange believes that the features of a trading floor 
provide benefits (such as price improvement) to investors and the 
market as a whole. Due to the differences between on-floor and off-
floor PULSe users and the Exchange's valid desire to encourage on-floor 
trading, the Exchange proposes to state that the COB Feed Fee will not 
be assessed to PULSe Workstation users on the Exchange trading floor.
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    \3\ ``COB'' stands for the Exchange's Complex Order Book. For a 
more detailed description of the PULSe workstation and its 
functionality, see, e.g., Securities Exchange Act Release Nos. 62286 
(June 11, 2010), 75 FR 34799 (June 18, 2010) (SR-CBOE-2010-051), 
63244 (November 4, 2010), 75 FR 69148 (November 10, 2010) (SR-CBOE-
2010-100), 63721 (January 14, 2011), 76 FR 3929 (January 21, 2011) 
(SR-CBOE-2011-011), 65280 (September 7, 2011), 76 FR 56838 
(September 14, 2011), 65491 (October 6, 2011), 76 FR 63680 (October 
13, 2011) (SR-CBOE-2011-092), 69990 (July 16, 2013), 78 FR 43953 
(July 22, 2013) (SR-CBOE-2013-062), and 71285 (January 10, 2014), 79 
FR 2916 (January 16, 2014) (SR-CBOE-2014-130).
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    The Exchange always strives for clarity in its rules and Fees 
Schedule, so that market participants may best understand how rules and 
fees apply. As such, the Exchange proposes to clarify its Fees 
Schedule. Currently, the ``Exception'' section of the Exchange's 
``Linkage Fees'' table states: ``CBOE will not pass through or 
otherwise charge customer orders (of any size) routed to other 
exchanges that were originally transmitted to the Exchange from the 
trading floor through an Exchange-sponsored terminal (e.g. a Floor 
Broker Workstation).'' The Exchange proposes to add the phrase ``or 
PULSe Workstation'' into the parenthetical to clarify that CBOE will 
not pass through or otherwise charge customer orders routed to other 
exchanges that were originally transmitted to the Exchange from a PULSe 
Workstation (which, like a Floor Broker Workstation, is an Exchange-
sponsored terminal on the trading floor).
    The proposed changes are to take effect on April 1, 2014.
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.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the COB Feed Fee is reasonable because, 
in order to improve the provision of this COB data, the Exchange has 
recently contracted an outside vendor to provide the COB Feed, and the 
new COB Feed Fee will help serve to recoup costs associated with the 
provision of the COB Feed. The Exchange believes it is equitable and 
not unfairly discriminatory to assess the COB Feed Fee only to off-
floor PULSe Workstation users because of the differences between on-
floor and off-floor PULSe Workstation users, and the Exchange's desire 
to encourage on-floor trading. On-

[[Page 20946]]

floor PULSe Workstation users must use PULSe Workstations using 
Exchange-provided hardware, for which such users pay a fee. Off-floor 
PULSe Workstation users, in contrast, are able to use PULSe 
Workstations using their own hardware (for which they do not pay the 
Exchange). Further, for off-floor PULSe Workstation users, the Exchange 
must expend resources in order to permission their IP addresses to 
access PULSe servers (which requires the Exchange to modify its 
firewall each time an off-floor PULSe user is permissioned), and off-
floor PULSe Workstation users are not assessed a fee for this process. 
The Exchange also would like to encourage on-floor trading activity, as 
the Exchange believes that the features of a trading floor provide 
benefits (such as price improvement) to investors and the market as a 
whole. The COB Feed Fee would be assessed equally to all off-floor 
PULSe Workstation users that request the COB Feed.
    The Exchange believes that the clarification of the Fees Schedule 
will alleviate potential confusion. The alleviation of potential 
confusion will remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, 
protect investors and the public interest.

B. Self-Regulatory Organization's Statement on Burden on Competition

    CBOE 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 COB Feed fee will 
be assessed to all PULSe Workstation users who request the COB Feed 
(except on-floor PULSe Workstation users, for the reasons described 
above). 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 COB 
Feed Fee only provides CBOE COB data and the proposed change only 
applies to CBOE. The proposed change to alleviate confusion is not 
intended for competitive reasons and 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 \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-2014-031 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-2014-031. 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-2014-031 and should be 
submitted on or before May 5, 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. 2014-08282 Filed 4-11-14; 8:45 am]
BILLING CODE 8011-01-P