[Federal Register Volume 82, Number 75 (Thursday, April 20, 2017)]
[Notices]
[Pages 18679-18680]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-07954]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80462; File No. SR-CBOE-2017-033]
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 14, 2017.
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 April 10, 2017, 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 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
1. Purpose
The Exchange proposes to amend its Fees Schedule with respect to
the Frequent Trader program.\3\ By way of background, the Frequent
Trader Program offers transaction fee rebates to registered Customers,
Professional Customers and Voluntary Professionals (origin codes ``C''
and ``W'') (collectively ``Customers'') that meet certain volume
thresholds in CBOE VIX Volatility Index options (``VIX options''),
Russell 2000 Index (``RUT'') options, and S&P 500 Index options
(``SPX''), weekly S&P 500 options (``SPXW'') and p.m.-settled SPX Index
options (``SPXpm'') (collectively referred to as ``SPX options'')
provided the Customer registers for the program. The Exchange proposes
to amend the Frequent Trader Program to increase the (i) volume
thresholds and (ii) rebates for VIX options. Specifically, the proposed
changes will be as follows:
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\3\ The Exchange initially filed the proposed fee change on
April 3, 2017 (SR-CBOE-2017-027). On April 10, 2017, the Exchange
withdrew that filing and submitted this filing.
VIX
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Monthly contracts traded Fee rebate
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Tier Current Proposed
Current Proposed (percent) (percent)
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1................................. 10,000-49,000........ 10,000-99,999........ 3 5
2................................. 50,000-99,000........ 100,000-299,999...... 6 15
3................................. 100,000 and above.... 300,000 and above.... 9 25
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[[Page 18680]]
The Exchange believes the proposed changes incentivizes the sending
of Customer orders to the Exchange while maintaining an incremental
incentive for Customers to strive for the highest tier level.
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.\4\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \5\ 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. The Exchange
also 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 Trading Permit Holders.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
\6\ 15 U.S.C. 78f(b)(4).
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The Exchange believes it's reasonable to increase the Frequent
Trader rebates for VIX because it provides Customers an opportunity to
receive increased rebates for reaching certain qualifying volume
thresholds that they would not otherwise receive. The proposed rule
change is designed to encourage greater Customer VIX options trading,
which, along with bringing greater VIX options trading opportunities to
all market participants, would bring in more fees to the Exchange, and
such fees can be used to recoup the Exchange's costs and expenditures
from maintaining VIX options. The Exchange believes it's also
reasonable to increase the qualifying volume thresholds for VIX as it
still allows the Exchange to maintain an incremental incentive for
Customers to strive for the highest tier level and because the Exchange
has increased the rebates for each of the tiers. The Exchange believes
it's equitable and not unfairly discriminatory to establish higher
rebates under the Frequent Trader Program for VIX as compared to SPX
and RUT options because the Exchange would like to encourage more VIX
trading. The Exchange believes that the proposed change is not unfairly
discriminatory because it will apply to all Frequent Trader Customers.
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 because, while the rebates apply
only to Customers, the proposed change is designed to encourage
increased Customer VIX options volume, which provides greater trading
opportunities for all market participants. The Exchange believes that
the proposed rule change will not cause an unnecessary burden on
intermarket competition because VIX is only traded 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.
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 \7\ and paragraph (f) of Rule 19b-4 \8\
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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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 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-2017-033 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-2017-033. 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-2017-033 and should be
submitted on or before May 11, 2017.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2017-07954 Filed 4-19-17; 8:45 am]
BILLING CODE 8011-01-P