[Federal Register Volume 81, Number 221 (Wednesday, November 16, 2016)]
[Notices]
[Pages 80689-80691]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-27471]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79276; File No SR-CBOE-2016-075]


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

November 9, 2016.
    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 November 1, 2016, 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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[[Page 80690]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    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. Particularly, the 
Exchange proposes to amend its fees for Firm (origin codes ``F'' and 
``L'') facilitation orders. The Fees Schedule currently defines 
``Facilitation orders'' as any order in which a Clearing Trading Permit 
Holder (``F'' origin code) or Non-Trading Permit Holder Affiliate 
(``L'' origin code) is contra to any other origin code, provided the 
same executing broker and clearing firm are on both sides of the 
transaction (for open outcry) or both sides of a paired order (for 
orders executed electronically).\3\ The Fees Schedule also provides 
that for facilitation orders (other than Underlying Symbol List A (34) 
excluding binary options) executed in open outcry, or electronically 
via the Automated Improvement Mechanism (``AIM'') or as a Qualified 
Contingent Cross order (``QCC'') or CFLEX transaction, CBOE will assess 
no Clearing Trading Permit Holder Proprietary transaction fees. The 
Exchange proposes to amend the Fees Schedule to provide that for 
facilitation orders executed via AIM (i.e., AIM facilitation contra 
orders), Firms would be assessed $0.05 per contract and for 
facilitation orders executed as a QCC order, Firms would be assessed 
$0.17 per contract. Additionally, the Exchange would amend the Clearing 
Trading Permit Holder Fee Cap rate table to reflect that AIM 
facilitation contra orders would now count towards the Clearing Trading 
Permit Holder Fee Cap (``Fee Cap''). The Exchange notes that AIM and 
QCC orders are already subject to rebates and therefore, it does not 
wish to further provide free facilitation on these executions.\4\ The 
Exchange also notes that other Exchanges do not waive fees for 
facilitation orders that are executed through an electronic pairing 
mechanism or as a QCC order.\5\
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    \3\ See CBOE Fees Schedule, Footnote 11.
    \4\ See e.g., CBOE Fees Schedule, the Volume Incentive Program, 
which provides credits for customer AIM orders and QCC Rate Table, 
which provides $0.10 per contract credit for all transaction QCC 
orders.
    \5\ See e.g., NASDAQ PHLX Pricing Schedule, Section II, Multiply 
Listed Options Fees and Section IV Other Transaction Fees, PIXL 
Pricing. See also, NYSE Amex Options (``Amex'') Fees Schedule, 
Credits and Key Terms and Definitions and Section I, Options 
Transaction Fees.
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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.\6\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \7\ 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 
Section 6(b)(4) of the Act,\8\ 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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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that assessing $0.05 per contract for Firm 
facilitation orders executed via AIM (i.e., AIM facilitation contra 
orders) is reasonable because it is the same amount assessed to Firms 
for AIM Solicitation contra orders. The Exchange believes it is 
equitable and not unfairly discriminatory to no longer waive 
transaction fees for AIM facilitation contra orders because AIM orders 
are already eligible for a rebate under the Volume Incentive Program 
(``VIP''). The Exchange also notes that transaction fees for similar 
facilitation transactions executed via an electronic pairing system at 
other exchanges are not waived.\9\ The Exchange believes amending the 
Fee Cap table to reflect that AIM facilitation contra orders would 
count towards the Fee Cap is reasonable, equitable and not unfairly 
discriminatory because the Exchange will now be charging for these 
transactions (whereas before they were listed as ``$0.00) and because 
AIM Solicitation contra orders are also applied to the Fee Cap.
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    \9\ See supra Note 5.
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    The Exchange believes that assessing $0.17 per contract for Firm 
facilitation orders executed as a QCC order is reasonable because it is 
the same amount all non-Customer orders are assessed for QCC order 
executions. The Exchange believes it is equitable and not unfairly 
discriminatory to no longer waive transaction fees for QCC facilitation 
contra orders because QCC orders already receive a rebate of $0.10 per 
contract. The Exchange also notes that transaction fees for similar QCC 
facilitation orders executed at other exchanges are not waived.\10\
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    \10\ Id.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule changes will 
impose any burdens on competition that are not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange 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 while the Exchange is 
eliminating its Firm Facilitation fee waiver for AIM and QCC orders, 
these orders are subject to the benefit of various rebates and will be 
assessed the same amounts charged to Firms for non-facilitation AIM 
contra orders and QCC orders, respectively. The Exchange does not 
believe that the proposed change will cause any unnecessary burden on 
intermarket competition because the proposed change only affects 
trading on CBOE. To the extent that the proposed changes make CBOE a 
more attractive marketplace for market participants at other exchanges, 
such market participants are welcome to become CBOE market 
participants.

[[Page 80691]]

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 \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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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-2016-075 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549.

All submissions should refer to File Number SR-CBOE-2016-075. 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 such 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 referto File Number SR-CBOE-2016-075 and should be 
submitted on or before December 7, 2016.
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    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Brent J. Fields,
Secretary.
[FR Doc. 2016-27471 Filed 11-15-16; 8:45 am]
 BILLING CODE 8011-01-P