77 FR 15 pgs. 3543-3544 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule
Type: NOTICEVolume: 77Number: 15Pages: 3543 - 3544
Docket number: [Release No. 34-66174; File No. SR-CBOE-2012-003]
FR document: [FR Doc. 2012-1284 Filed 1-23-12; 8:45 am]
Agency: Securities and Exchange Commission
Official PDF Version: PDF Version
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66174; File No. SR-CBOE-2012-003]
Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule
January 18, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the "Act"),1and Rule 19b-4 thereunder,2notice is hereby given that on January 5, 2012, the 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.
Footnotes:
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b-4.
I. Self-Regulatory Organization's Statement of the Terms of the 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.org/legal ), 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 the Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization 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 those 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its Fees Schedule's Volume Incentive Program (the "Program"), which was implemented on January 1, 2012.3The Program credits Trading Permit Holders ("TPHs") certain per contract amounts resulting from each public customer ("C" origin code) order transmitted by that TPH which is executed electronically on the Exchange in all multiply-listed option classes (excluding QCC trades), provided the TPH meets certain volume thresholds in a month. The volume thresholds are calculated based on the customer contracts per day ("CPD") entered and executed over the course of the month.4However, the description of the Program does not discuss the results of a circumstance in which there is a CBOE System outage or other interruption of electronic trading on CBOE. Any such interruption would prevent TPHs from electronically executing public customer orders in multiply-listed classes, which would in turn inhibit TPHs from executing enough of those orders to reach the volume thresholds that would allow them to qualify for the credit tiers. As such, the Exchange proposes to add a stipulation that in the event of a CBOE System outage or other interruption of electronic trading on CBOE, the Exchange will take into account, on a pro rata basis, the length of time of the interruption for purposes of calculating the contracts per day (the "Stipulation").
Footnotes:
3 See Securities Exchange Act Release No. 66054 (December 23, 2011), 76 FR 82332 (December 30, 2011) (SR-CBOE-2011-120).
4 See Exchange Fees Schedule, Section 21.
For example, consider a situation in which a month has twenty trading days, but a CBOE System outage occurs for one-half of one trading day, and a TPH electronically executes 1,980,000 public customer contracts during that month. Currently, without the Stipulation, the TPH's CPD for the month would be 99,000 (1,980,000 public customer contracts divided by 20 trading days), which would not qualify the TPH for any credits under the Program (as the lowest ($0.05 per contract) credit tier begins at 100,001 CPD). However, with the Stipulation, the Exchange would consider there to have been 19.5 trading days in the month (accounting for the 1⁄2 day during which there was a System outage that prevented electronic trading). The TPH's CPD for the month would then be 101,538 (1,980,000 public customer contracts divided by 19.5 trading days), and contracts 100,001 through 101,538 (so, 1,538 contracts per day) would qualify for the $0.05 per contract rebate, so the TPH would receive a credit of $1499.50 (1,538 contracts per day multiplied by 19.5 trading days in the month multiplied by $0.05 per contract credit).
The purpose of this proposed change is to prevent a TPH from failing to meet a credit threshold if the reason for such failure was a CBOE electronic trading interruption.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the Act5in general, and furthers the objectives of Section 6(b)(5)6of the Act in particular, in that it is designed 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. Stipulating that in the event of a CBOE System outage or other interruption of electronic trading on CBOE, the Exchange will take into account, on a pro rata basis, the length of time of the interruption for purposes of calculating the contracts per day perfects the mechanism of a free and open market and protects investors by ensuring that TPHs are not prevented from receiving credits under the Program through no fault of their own.
Footnotes:
5 15 U.S.C. 78f(b).
6 15 U.S.C. 78f(b)(5).
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 not necessary or appropriate in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
The proposed rule change is designated by the Exchange as establishing or changing a due, fee, or other charge, thereby qualifying for effectiveness on filing pursuant to Section 19(b)(3)(A) of the Act7and subparagraph (f)(2) of Rule 19b-48thereunder. 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.
Footnotes:
7 15 U.S.C. 78s(b)(3)(A).
8 17 C.F.R. 240.19b-4(f)(2).
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 rule-comments@sec.gov. Please include File Number SR-CBOE-2012-003 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-2012-003. 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 on official business days between the hours of 10 a.m. and 3 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; 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-2012-003, and should be submitted on or before February 14, 2012.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9
Footnotes:
9 17 CFR 200.30-3(a)(12).
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-1284 Filed 1-23-12; 8:45 am]
BILLING CODE 8011-01-P