[Federal Register Volume 78, Number 175 (Tuesday, September 10, 2013)]
[Notices]
[Pages 55305-55310]
[FR Doc No: 2013-21933]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70315; File No. SR-CBOE-2013-083]

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

September 4, 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 August 22, 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 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 waive the CMI and FIX Login ID fees for CMI and
FIX Login IDs used to access the Exchange's FLEX Hybrid Trading System
(the ``CFLEX System'') for FLEX Options \3\ trading (the ``Waiver'').
CMI Client Application Servers and FIX Ports are used by Exchange
Trading Permit Holders (``TPHs'') to access CBOE Command, which is the
platform provided by the Exchange to connect to Exchange systems. The
Exchange assesses a fee of $500 per month for each CMI or FIX Login ID
that a TPH uses to access CBOE Command. The Exchange has enhanced the
CFLEX System in order to further integrate it with the Exchange's
existing CBOE Command technology platform.\4\ As part of these
enhancements, TPHs connect to the CFLEX System through CBOE Command,
and need to get either a CMI or FIX Login ID to do so.\5\ As such, the
Exchange proposes the Waiver in order to encourage TPHs to trade on the
CFLEX System. The Exchange has, in the past, waived the CMI and FIX
Login ID fees.\6\
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    \3\ Flexible Exchange Options (``FLEX Options'') provide
investors with the ability to customize basic option features
including size, expiration date, exercise style, and certain
exercise prices. FLEX Options can be FLEX Index Options or FLEX
Equity Options. In addition, other products are permitted to be
traded pursuant to the FLEX trading procedures. For example, credit
options are eligible for trading as FLEX Options pursuant to the
FLEX rules in Chapters XXIVA and XXIVB. See CBOE Rules 24A.1(e) and
(f), 24A.4(b)(1) and (c)(1), 24B.1(f) and (g), 24B.4(b)(1) and
(c)(1), and 28.17. The rules governing the trading of FLEX Options
on the FLEX Request for Quote (``RFQ'') System platform (which is
limited to open outcry trading only) are contained in Chapter XXIVA.
The rules governing the trading of FLEX Options on the FLEX Hybrid
Trading System platform (which combines both open outcry and
electronic trading) are contained in Chapter XXIVB. The Exchange
notes that, currently, all FLEX Options are traded on the FLEX
Hybrid Trading System platform.
    \4\ See Securities Exchange Act Release No. 66769 (April 6,
2012), 77 FR 22012 (April 12, 2012) (SR-CBOE-2012-033).
    \5\ TPHs may also access the CFLEX System using an internet-
based application. There is currently no login fee associated with
the internet-based application.
    \6\ See Securities Exchange Act Release No. 66812 (April 16,
2012), 77 FR 23767 (April 20, 2012) (SR-CBOE-2012-037).
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    Next, the Exchange proposes to amend its Hybrid Agency Liaison
(``HAL'') Step-Up Rebate (the ``Rebate''). Currently, the Exchange
rebates to a Market-Maker $0.10 per contract against transaction fees
generated from a transaction on the HAL system in a penny pilot class,
provided that at least 60% of the Market-Maker's quotes in that class
(excluding mini-options and quotes in LEAPS series) in the prior
calendar month were on one side of the NBBO. The Exchange proposes to
amend the Rebate to raise the threshold to 70%, effective September 1
(the Exchange initially submitted this proposed change one month prior
to the effective date in order to notify Market-Makers about the
change; since the Rebate is provided based on the prior calendar
month's trading, this action will have given Market-Makers notification
that they must hit the 70% threshold in August in order to qualify for
the Rebate in September). The Exchange proposes increasing this
threshold for economic reasons; providing the Rebate is less
economically viable, and the Exchange is willing to continue to provide
it, but only if it will encourage even greater quoting on one side of
the NBBO by Market-Makers. Indeed, the Exchange believes that the
increased threshold will incentivize Market-Makers to provide more
competitive quoting.
    The Exchange proposes to amend its Fees Schedule to increase the
Surcharge Fee for the Russell 2000 Index (``RUT'') from $0.15 per
contract to $0.30 per contract. Surcharge Fees charged by the Exchange
reflect the pass-through charges associated with the licensing of
certain products, including RUT. The proposed increase in the Surcharge
Fee for RUT from $0.15 to $0.30 per contract is a reflection of the
increased cost the Exchange has incurred in securing a license
agreement from the index provider. Absent the license agreement, the
Exchange and its participants would be unable to trade RUT options and
would lose the ability to hedge small cap securities with a large
notional value, European-style cash-settled index option. Other
exchanges have recently

increased their RUT surcharge fees to an even greater extent than the
Exchange.\7\
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    \7\ See SR-NYSEMKT-2013-65, which increased the NYSE MKT LLC
(``AMEX'') Royalty Fee for RUT from $0.15 per contract to $0.40 per
contract.
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    The Exchange proposes to amend its Fees Schedule with regards to
strategy executions.\8\ First, the Exchange proposes to include
Clearing Trading Permit Holder and joint back-office (``JBO'')
participant transaction fees towards qualifying for the cap (described
in Footnote 13 to the Fees Schedule) on transaction fees for all
reversals, conversions and jelly roll strategies executed on the same
trading day in the same option class, excluding any option class on
which the Exchange charges the Index License surcharge fee. The purpose
of this proposed change is to encourage Clearing Trading Permit Holders
and JBO participants to execute such strategy transactions (the
execution of which will add volume and provide trading opportunities
for all market participants, especially those on the other side of such
transactions). Further, other exchanges apply a similar cap to similar
market participants.\9\ The Exchange also proposes to lower from $1000
to $700 this cap. The Exchange proposes this change for similar
reasons; in order to encourage qualifying market participants to
execute such strategy transactions (the execution of which will add
volume and provide trading opportunities for all market participants,
especially those on the other side of such transactions). Further,
other exchanges apply similar caps in these amounts.\10\
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    \8\ For details about strategy executions, see CBOE Fees
Schedule, Footnote 13.
    \9\ See NASDAQ OMX PHLX (``PHLX'') Pricing Schedule, ``Strategy
Caps'' chart, which includes ``firms'' in their cap on such
transactions (``firms'' and ``Clearing Trading Permit Holders''
being similar market participants).
    \10\ See PHLX Pricing Schedule, ``Strategy Caps'' chart.
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    The Exchange also proposes to exclude JBO participants from the
$25,000 per month cap on transaction fees for strategies. JBO
participants trade only their own proprietary orders via a Clearing
Trading Permit Holder; they do not do any agency trading (trading for
customers or other market participants). They do not have some of the
obligations, such as being a Trading Permit Holder, that other
beneficiaries of the $25,000 per month cap on transaction fees for
strategies have.
    The Exchange also proposes to exclude from the $1,000 cap on all
merger strategies and short-stock interest strategies executed in the
same trading day in the same option class transactions in any option
class on which the Exchange charges the Index License surcharge fee
under Footnote 14 of the Fees Schedule because there is no such thing
as an index merger or a short stock index situation. No such trades
could be executed.
    The Exchange also proposes to amend Footnote 11 of the Fees
Schedule to state that transaction fees resulting from any of the
strategies defined in Footnote 13 will apply towards reaching the
Clearing Trading Permit Holder Proprietary Fee Cap (the ``Fee Cap'')
(contract volume resulting from such strategies will still not apply
towards the CBOE Proprietary Products Sliding Scale for Clearing
Trading Permit Holder Proprietary Orders). This will put the strategy
executions on the same footing as other transactions that count towards
the Fee Cap. Further, the Exchange believes this change will encourage
the transaction of strategy executions, and the resulting increased
volume should benefit all market participants.
    The Exchange also proposes to exclude Clearing Trading Permit
Holders from the $25,000 per month cap on transaction fees for
strategies because the Exchange has determined to include strategy
transaction fees in the Fee Cap, which includes many other types of
Clearing Trading Permit Holder transaction fees and is more
advantageous for Clearing Trading Permit Holders. Further, it would not
make economic sense to include strategy transaction fees towards two
different monthly fee caps (the Fee Cap and the $25,000 per month
strategy transaction fee cap). The Exchange also proposes to explicitly
state this $25,000 cap applies to TPH organizations as well as Trading
Permit Holders (while TPH organizations are Trading Permit Holders and
therefore already qualify for this cap, the Exchange proposes this
clarification in order to clear up any possible confusion). \11\
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    \11\ Following adoption of the proposed changes to strategies
fees, the first three sentences of Footnote 13 of the Fees Schedule
will read: Market-maker, Clearing Trading Permit Holder, broker-
dealer and non-Trading Permit Holder market-maker transaction fees
are capped at $1,000 for all (i) merger strategies and (ii) short
stock interest strategies and at $700 for all reversals, conversions
and jelly roll strategies executed on the same trading day in the
same option class, excluding any option class on which the Exchange
charges the Index License surcharge fee under footnote 14 of this
Fees Schedule. Such transaction fees for these strategies are
further capped at $25,000 per month per initiating Trading Permit
Holder or TPH Organization (excluding Clearing Trading Permit
Holders).
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    Finally, the Exchange proposes to amend its Customer Large Trade
Discount (the ``Discount'') with regards to complex orders. The
Discount is a cap on customer (``C'' origin code) transaction fees for
certain options classes. Footnote 27 to the Fees Schedule, which
describes the Discount, states that ``For complex orders, the total
contracts of an order (all legs) are counted for purposes of
calculating the fee cap. To qualify for the discount, the entire order
quantity must be tied to a single order ID either within the CBOE
Command system or in FBW or PULSe or in the front end system used to
enter and/or transmit the order . . .'' However, Exchange system
limitations prevent the entry of a complex order with more than four
legs (for orders entered via PULSe, FBW, or for electronic processing)
or twelve legs (for orders entered via a TPH's front-end system that
has capability for such orders (PULSe and FBW will soon be capable of
the entry of 12-leg complex orders)) into the Exchange system. As such,
complex orders with more than the applicable leg limitations must be
split up and entered in multiple orders (each order with a different
order ID) that each have four legs (for orders entered via PULSe, FBW,
or for electronic processing) or twelve legs (for orders entered via a
TPH's front-end system that has capability for such orders) or less.
Because such complex orders then cannot be tied to a single order ID,
under the current language of Footnote 27, they would not qualify for
the Discount. The Exchange does not intend to exclude such complex
orders from qualification for the discount; they are only excluded due
to the system limitations. As such, The Exchange proposes to amend
Footnote 27 to state that to ``qualify for the discount, the entire
order quantity must be tied to a single order ID (unless the order is a
complex order with a number of legs that exceeds system
limitations)[hellip]'' In order to verify that a complex order with a
number of legs that exceeds system limitations that has been broken up
into multiple orders (with multiple order IDs) is indeed a single
complex order, the Exchange also proposes to amend the last sentence of
Footnote 27 to state that for an order entered via FBW, PULSe or
another front end system, or a complex order with multiple order IDs, a
customer large trade discount request must be submitted to the Exchange
within 3 business days of the transactions and must identify all
necessary information, including the order ID and related trade
details.
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.\12\
Specifically, the Exchange believes the proposed rule change is
consistent with Section 6(b)(4) of the Act,\13\ which provides that
Exchange rules may provide for the equitable allocation of reasonable
dues, fees, and other charges among its TPHs and other persons using
its facilities. The Exchange believes that the Waiver is reasonable
because it will allow all TPHs trading FLEX Options on the CFLEX System
to avoid having to pay a fee that they would otherwise have to pay. The
Exchange believes that the Waiver is equitable and not unfairly
discriminatory because the Waiver applies to all types of market
participants. Further, the Exchange believes that the Waiver will
encourage TPHs to transact business in FLEX Options using the CFLEX
System and encourage trading of customized options in an exchange
environment.\14\ The Exchange believes such increased business will
provide greater FLEX Options trading opportunities for all market
participants. Also, the transaction fees collected from this increased
business will allow the Exchange to recoup costs expended in building
and developing the CFLEX System.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(4).
    \14\ The Exchange believes that FLEX Options provide TPHs and
investors with an improved but comparable alternative to the over-
the-counter (``OTC'') market in customized options, which can take
on contract characteristics similar to FLEX Options. The Exchange
believes market participants benefit from being able to trade
customized options in an exchange environment in several ways,
including, but not limited to the following: (i) Enhanced efficiency
in initiating and closing out positions; (ii) increased market
transparency; and (iii) heightened contra-party creditworthiness due
to the role of The Options Clearing Corporation as issuer and
guarantor of FLEX Options.
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    The Exchange believes that raising the threshold for the Rebate is
reasonable because Market-Makers will still be able to receive a rebate
for trading activity that they would not otherwise receive (as opposed
to levying a fee), and those that cannot reach the new higher threshold
will merely be required to pay regular transaction fees. The Exchange
believes that raising the threshold for the Rebate is equitable and not
unfairly discriminatory because it will encourage more competitive
quoting from Market-Makers, which will benefit all market participants.
Further, Market-Makers have certain obligations, such as quoting
obligations, that other market participants do not have.
    The Exchange believes that the proposed increase in the Surcharge
Fee from $0.15 to $0.30 per contract for options on RUT is reasonable
because Surcharge Fees charged by the Exchange reflect the pass-through
charges associated with the licensing of certain products, including
RUT. The proposed increase is therefore a direct result of an increase
in the licensing fee charged to the Exchange by the index provider and
the owner of the intellectual property associated with the index. This
increase is equitable and not unfairly discriminatory because the
increased amount will be assessed to all market participants to whom
the RUT Surcharge Fee applies. Also, other exchanges have recently
increased their RUT surcharge fees to an even greater extent than the
Exchange.\15\
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    \15\ See SR-NYSEMKT-2013-65, which increased the AMEX Royalty
Fee for RUT from $0.15 per contract to $0.40 per contract.
---------------------------------------------------------------------------

    The Exchange believes that the proposal to include Clearing Trading
Permit Holder and JBO participant transaction fees towards qualifying
for the cap (described in Footnote 13 to the Fees Schedule) on
transaction fees for all reversals, conversions and jelly roll
strategies executed on the same trading day in the same option class,
excluding any option class on which the Exchange charges the Index
License surcharge fee is reasonable because it will allow Clearing
Trading Permit Holders and JBO participants executing such trades to
have a cap on fees for such executions. The Exchange believes that this
is equitable and not unfairly discriminatory because Clearing Trading
Permit Holders take on a number of obligations, (such as membership
with the Options Clearing Corporation), significant regulatory burdens,
and financial obligations, that some other market participants do not
take on. While this cap does not apply to Customer transactions,
Customers pay significantly lower transaction fees (including for
trades that may include such transactions) (and in many circumstances,
no fee). Further, the Exchange believes that this will encourage
Clearing Trading Permit Holders and JBO participants to execute such
strategy transactions (the execution of which will add volume and
provide trading opportunities for all market participants, especially
those on the other side of such transactions). Further, other exchanges
apply a similar cap to similar market participants.\16\
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    \16\ See PHLX Pricing Schedule, ``Strategy Caps'' chart, which
includes ``firms'' in their cap on such transactions (``firms'' and
``Clearing Trading Permit Holders'' being similar market
participants).
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    The Exchange believes that lowering the cap from $1,000 to $700 on
transaction fees for all reversals, conversions and jelly roll
strategies executed on the same trading day in the same option class,
excluding any option class on which the Exchange charges the Index
License surcharge fee, is reasonable because it will allow qualifying
market participants executing such trades to have a lower cap on fees
for such executions (thereby saving money). The Exchange believes that
this is equitable and not unfairly discriminatory because the proposed
lowering of the cap does not affect which market participants qualify
for the cap; this lowered cap applies to the same market participants
as the $1,000 cap (with the exception of Clearing Trading Permit
Holders and JBO participants, who now qualify as described above).
Further, the Exchange proposes this change in order to encourage
qualifying market participants to execute such strategy transactions
(the execution of which will add volume and provide trading
opportunities for all market participants, especially those on the
other side of such transactions). Also, other exchanges apply similar
caps in these amounts.\17\
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    \17\ See PHLX Pricing Schedule, ``Strategy Caps'' chart.
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    The Exchange believes that excluding JBO participants from the
$25,000 per month cap on transaction fees for strategies (as described
above) is reasonable because this change will merely require JBO
participants to pay regular transaction fees on all such transactions.
The Exchange believes that this change is equitable and not unfairly
discriminatory because JBO participants do not have the obligations
(such as becoming Trading Permit Holders, clearing trades, financial or
regulatory burdens, quoting obligations, and books and records
obligations) that other market participants who benefit from the
$25,000 per month cap on transaction fees for strategies have, and they
only trade for own accounts.
    The Exchange believes that excluding from the fee cap on merger
strategies and short stock interest strategies transactions in any
option class on which the Exchange charges the Index License surcharge
fee under Footnote 14 of the Fees Schedule is reasonable, equitable and
not unfairly discriminatory because there is no such thing as an index
merger or a short stock index situation (because these strategies are
only applicable to single stock options transactions). Therefore, since
it would not be possible to do these strategies for index options,
there could not be a discriminatory impact. Further, even if this were
not the case, market participants trading merger strategies and short
stock interest strategies in any

of those classes would merely be required to pay the regular
transaction fees for such trades.
    The Exchange believes that excluding Clearing Trading Permit
Holders from the $25,000 per month strategies fees cap is reasonable,
equitable and not unfairly discriminatory because the Exchange is
proposing to apply strategy transaction fees towards the Fee Cap, which
includes many other types of Clearing Trading Permit Holder transaction
fees and is more advantageous for Clearing Trading Permit Holders.
Further, it would not make economic sense to include strategy
transaction fees towards two different monthly fee caps (the Fee Cap
and the $25,000 per month strategy transaction fee cap). Moreover, the
Exchange believes that including strategy transaction fees in the Fee
Cap will encourage Clearing Trading Permit Holders to execute more
strategy trades (more than would applying Clearing Trading Permit
Holder strategy transaction fees towards a strategies cap), with the
resulting increased volume benefitting all market participants.
Finally, without having transaction fees from strategy trades count
towards a strategies cap, Clearing Trading Permit Holders will merely
be required to pay regular transaction fees for such transactions.
    The Exchange believes that explicitly stating that the $25,000 per
month strategies fees cap applies to TPH organizations as well as
Trading Permit Holders is consistent with the Section 6(b)(5) \18\
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 facilitation 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. By clearing up any possible
confusion, this proposed change removes impediments to and perfects the
mechanism of a free and open market and a national market system.
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    \18\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed change to include
transaction fees resulting from such strategies to count towards the
Fee Cap is reasonable because it will allow qualifying market
participants who execute strategy transactions to benefit from the Fee
Cap for doing so. The Exchange believes that this is equitable and not
unfairly discriminatory because it will apply to all market
participants who qualify for the Fee Cap. While the Fee Cap only
applies to Clearing Trading Permit Holders, those market participants
take on obligations, such as membership with the Options Clearing
Corporation, significant regulatory burdens, and financial obligations,
that some other market participants do not take on. Further, the
Exchange believes that this will incentivize qualifying market
participants to engage in such strategy executions, and the resulting
increase in volume will benefit all market participants. Finally, this
will put the strategy executions on the same footing as other
transactions that count towards the Fee Cap.
    The Exchange believes that specifying that a complex order with a
number of legs that exceeds system limitations to be tied to a single
order ID qualifies for the Discount is reasonable because the Exchange
does not intend to exclude such orders from qualification for the
Discount; Exchange systems merely prevent such orders from being tied
to a single order ID. Complex orders qualify for the Discount, this
proposed change is merely intended to make up for an Exchange system
limitation. This change is equitable and not unfairly discriminatory
because it provides complex orders with more than the number of legs
permitted for entry with a single order ID with the ability to qualify
for the Discount, just as complex orders with a small enough number of
legs as to permit such orders to be tied to a single order ID may
qualify for the Discount.

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. CBOE does not believe that the
proposed Waiver will impose any burden on intramarket competition that
is not necessary or appropriate in furtherance of the purposes of the
Act because the Waiver will apply to all market participants accessing
the CFLEX System via CMI or FIX Login IDs. Further, the Exchange
believes that the Waiver will encourage TPHs to transact business in
FLEX Options using the CFLEX System and encourage trading of customized
options in an exchange environment. The Exchange believes such
increased business will provide greater FLEX Options trading
opportunities for all market participants, and the Exchange believes
that the transaction fees collected from this increased business will
allow the Exchange to recoup costs expended in building and developing
the CFLEX System. CBOE does not believe that the proposed Waiver 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 accessing the CFLEX System, which is
only available on CBOE. To the extent that waived fees for CMI or FIX
Login IDs for accessing the CFLEX System makes CBOE a more attractive
trading venue for market participants at other exchanges, such market
participants may elect to become CBOE market participants.
    CBOE does not believe that the proposed increase in the Rebate
threshold will impose any burden on intramarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act
because the increase does not change which market participants to whom
the Rebate applies; it merely changes the threshold for qualification
for the Rebate. Further, while the Rebate applies to Market-Makers,
Market-Makers have certain obligations, such as quoting obligations,
that other market participants do not have. CBOE does not believe that
the proposed increase in the Rebate threshold 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 CBOE, and only CBOE has a HAL Step-Up Rebate.
    CBOE does not believe that the proposed increase in the RUT
Surcharge Fee will impose any burden on intramarket competition that is
not necessary or appropriate in furtherance of the purposes of the Act
because the increase does not change which market participants to whom
the RUT Surcharge Fee applies; it merely changes the fee's amount. CBOE
does not believe that the proposed increase in the RUT Surcharge Fee
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 of RUT on CBOE. The Exchange
further notes that the licensing agreement it has secured is not an
exclusive agreement as at least two other options exchanges continue to
trade RUT options and charge a fee related to such license (and indeed,
the Exchange's proposed increased fee is still lower than that offered
on other exchanges). As such, the Exchange believes that there is no
unnecessary or

inappropriate burden on competition among exchanges for the trading of
RUT options.
    The Exchange does not believe that the proposal to include Clearing
Trading Permit Holder and JBO participant transaction fees towards
qualifying for the cap (described in Footnote 13 to the Fees Schedule)
on transaction fees for all reversals, conversions and jelly roll
strategies executed on the same trading day in the same option class,
excluding any option class on which the Exchange charges the Index
License surcharge fee, will impose any burden on intramarket
competition that is not necessary or appropriate in furtherance of the
purposes of the Act because Clearing Trading Permit Holders take on a
number of obligations, (such as membership with the Options Clearing
Corporation), significant regulatory burdens, and financial
obligations, that some other market participants do not take on. While
this cap does not apply to Customer transactions, Customers pay
significantly lower transaction fees (including for trades that may
include such transactions) (and in many circumstances, no fee).
Further, the Exchange believes that this will encourage Clearing
Trading Permit Holders and JBO participants to execute such strategy
transactions (the execution of which will add volume and provide
trading opportunities for all market participants, especially those on
the other side of such transactions). The Exchange does not believe
that this will impose any burden on intermarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act
because the change only applies to trading on CBOE. Further, other
exchanges apply a similar cap to similar market participants,\19\ so
this change should make CBOE more competitive with other exchanges. To
this extent, if this change makes CBOE more attractive to market
participants on other exchanges, such market participants may elect to
become CBOE market participants.
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    \19\ See PHLX Pricing Schedule, ``Strategy Caps'' chart, which
includes ``firms'' in their cap on such transactions (``firms'' and
``Clearing Trading Permit Holders'' being similar market
participants).
---------------------------------------------------------------------------

    The Exchange does not believe that the proposed change to lower
from $1,000 to $700 the cap (described in Footnote 13 to the Fees
Schedule) on transaction fees for all reversals, conversions and jelly
roll strategies executed on the same trading day in the same option
class, excluding any option class on which the Exchange charges the
Index License surcharge fee, will impose any burden on intramarket
competition that is not necessary or appropriate in furtherance of the
purposes of the Act because the proposed lowering of the cap does not
affect which market participants qualify for the cap; this lowered cap
applies to the same market participants as the $1,000 cap (with the
exception of Clearing Trading Permit Holders and JBO participants, who
now qualify as described above). Further, the Exchange proposes this
change in order to encourage qualifying market participants to execute
such strategy transactions (the execution of which will add volume and
provide trading opportunities for all market participants, especially
those on the other side of such transactions). The Exchange does not
believe that this will impose any burden on intermarket competition
that is not necessary or appropriate in furtherance of the purposes of
the Act because the change only applies to trading on CBOE. Further,
other exchanges apply similar caps in these amounts,\20\ so this change
should make CBOE more competitive with other exchanges. To this extent,
if this change makes CBOE more attractive to market participants on
other exchanges, such market participants may elect to become CBOE
market participants.
---------------------------------------------------------------------------

    \20\ See PHLX Pricing Schedule, ``Strategy Caps'' chart.
---------------------------------------------------------------------------

    The Exchange does not believe that the proposed change to exclude
JBO participants from the $25,000 per month cap on transaction fees for
strategies (as described above) will impose any burden on intramarket
competition that is not necessary or appropriate in furtherance of the
purposes of the Act because JBO participants do not have the
obligations (such as becoming Trading Permit Holders, clearing trades,
financial or regulatory burdens, quoting obligations, and books and
records obligations) that other market participants have, and they only
trade for own accounts. The Exchange does not believe that this will
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
change only applies to trading on CBOE.
    The Exchange does not believe that the proposed change to exclude
from the fee cap on merger strategies and short stock interest
strategies transactions in any option class on which the Exchange
charges the Index License surcharge fee under Footnote 14 of the Fees
Schedule will impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act because there is
no such thing as an index merger or a short stock index situation.
    The Exchange does not believe that the proposed changes to include
transaction fees resulting from such strategies to count towards the
Fee Cap will impose any burden on intramarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act
because they will apply to all market participants who qualify for the
Fee Cap. While the Fee Cap only applies to Clearing Trading Permit
Holders, those market participants take on obligations, such as
membership with the Options Clearing Corporation, significant
regulatory burdens, and financial obligations, that some other market
participants do not take on. Further, the Exchange believes that this
will incentivize qualifying market participants to engage in such
strategy executions, and the resulting increase in volume will benefit
all market participants. The Exchange does not believe that this will
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act because it only
affects trading on CBOE. Further, to the extent that these changes may
make CBOE a more attractive trading venue for market participants on
other exchanges, such market participants may elect to become CBOE
market participants.
    The Exchange does not believe that the proposed change to exclude
Clearing Trading Permit Holders from the $25,000 per month strategies
fees cap will impose any burden on intramarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act
because the Exchange is proposing to apply transaction fees from
strategies trades towards the Fee Cap, which includes many other types
of Clearing Trading Permit Holder transaction fees and is more
advantageous for Clearing Trading Permit Holders. Further, it would not
make economic sense to include strategy transaction fees towards two
different monthly fee caps (the Fee Cap and the $25,000 per month
strategy transaction fee cap). Further, the Exchange believes that
including strategy transaction fees in the Fee Cap will encourage
Clearing Trading Permit Holders to execute more strategy trades (more
than would applying Clearing Trading Permit Holder strategy transaction
fees towards a strategies cap), with the resulting increased volume
benefitting all market participants. The Exchange does not believe that
this will impose any burden on intermarket competition that is not

necessary or appropriate in furtherance of the purposes of the Act
because the change only applies to trading on CBOE.
    The Exchange does not believe that the proposal to explicitly state
that the $25,000 per month strategies fees cap applies to TPH
organizations as well as Trading Permit Holders will impose any burden
on competition that is not necessary or appropriate in furtherance of
the purposes of the Act because this is not a substantive change, but
merely intended to clear up any potential confusion.
    CBOE does not believe that the proposed amendment to Footnote 27
permitting complex orders that cannot be tied to a single order ID to
qualify for the Discount will impose any burden on intramarket
competition that is not necessary or appropriate in furtherance of the
purposes of the Act because this proposed change does not affect which
types of market participants qualify for the Discount; it is merely
intended to make up for an Exchange system limitation. This change
provides complex orders that cannot be tied to a single order ID with
the ability to qualify for the Discount, just as complex orders that
can be tied to a single order ID may qualify for the Discount. CBOE
does not believe that this proposed change will impose any burden on
intermarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act for much of the same reasons.
The change is not made for competitive reasons, but instead to correct
for an Exchange system limitation. Further, this proposed change
applies only to trading on CBOE. To the extent that the proposed change
may make CBOE a more attractive trading venue for market participants
at other exchanges, such market participants may elect 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 \21\ and paragraph (f) of Rule 19b-4 \22\
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.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78s(b)(3)(A).
    \22\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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_ADDRESS>Please include
File Number SR-CBOE-2013-083 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-2013-083. 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 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-2013-083,
and should be submitted on or before October 1, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
---------------------------------------------------------------------------

    \23\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-21933 Filed 9-9-13; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 133 (Tuesday, July 12, 2011)]
[Rules and Regulations]
[Pages 40797-40798]
[FR Doc No: 2011-17202]

=======================================================================
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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2010-0987; Airspace Docket No. 10-ANM-14]

Establishment of Class E Airspace; Lincoln City, OR

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: This action establishes Class E airspace at Lincoln City, OR,
to accommodate aircraft using a new Area Navigation (RNAV) Global
Positioning System (GPS) standard instrument approach procedures at
Samaritan North Lincoln Hospital Heliport. This action also corrects
the name of the city were the Heliport is located. This improves the
safety and management of Instrument Flight Rules (IFR) operations.

DATES: Effective date, 0901 UTC, October 20, 2011. The Director of the
Federal Register approves this incorporation by reference action under
1 CFR part 51, subject to the annual revision of FAA Order 7400.9 and
publication of conforming amendments.

FOR FURTHER INFORMATION CONTACT: Eldon Taylor, Federal Aviation
Administration, Operations Support Group, Western Service Center, 1601
Lind Avenue, SW., Renton, WA 98057; telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

History

    On April 15, 2011, the FAA published in the Federal Register a
notice of proposed rulemaking to establish controlled airspace at
Lincoln City, OR (76 FR 21268). Interested parties were invited to
participate in this rulemaking effort by submitting written comments on
the proposal to the FAA. No comments were received. Subsequent to
publication, the FAA found the name of the town was listed incorrectly.
This action makes that correction. With the exception of editorial
changes, and the changes described above, this rule is the same as that
proposed in the NPRM.
    Class E airspace designations are published in paragraph 6005 of
FAA Order 7400.9U dated August 18, 2010, and effective September 15,
2010, which is incorporated by reference in 14 CFR 71.1. The Class E
airspace designations listed in this document will be published
subsequently in that Order.

The Rule

    This action amends Title 14 Code of Federal Regulations (14 CFR)
part 71 by establishing Class E airspace extending upward from 700 feet
above the surface, at Samaritan North Lincoln Hospital Heliport,
Lincoln City, OR, to accommodate IFR aircraft executing new RNAV (GPS)
standard instrument approach procedures at the heliport. This action is
necessary for the safety and management of IFR operations. This action
also makes a correction in the town name, from Lincoln, OR, to Lincoln
City, OR.
    The FAA has determined this regulation only involves an established
body of technical regulations for which frequent and routine amendments
are necessary to keep them operationally current. Therefore, this
regulation: (1) Is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under DOT
Regulatory Policies and Procedures (44 FR 11034; February 26, 1979);
and (3) does not warrant preparation of a regulatory evaluation as the
anticipated impact is so minimal. Since this is a routine matter that
will only affect air traffic procedures and air navigation, it

is certified this rule, when promulgated, will not have a significant
economic impact on a substantial number of small entities under the
criteria of the Regulatory Flexibility Act. The FAA's authority to
issue rules regarding aviation safety is found in Title 49 of the U.S.
Code. Subtitle 1, section 106 discusses the authority of the FAA
Administrator. Subtitle VII, Aviation Programs, describes in more
detail the scope of the agency's authority. This rulemaking is
promulgated under the authority described in subtitle VII, part A,
subpart I, section 40103. Under that section, the FAA is charged with
prescribing regulations to assign the use of airspace necessary to
ensure the safety of aircraft and the efficient use of airspace. This
regulation is within the scope of that authority as it establishes
controlled airspace at Samaritan North Lincoln Hospital Heliport,
Lincoln City, OR.

List of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (air).

Adoption of the Amendment

    In consideration of the foregoing, the Federal Aviation
Administration amends 14 CFR part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND REPORTING POINTS

0
1. The authority citation for 14 CFR part 71 continues to read as
follows:

    Authority: 49 U.S.C. 106(g), 40103, 40113, 40120; E.O. 10854, 24
FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1  [Amended]

0
2. The incorporation by reference in 14 CFR 71.1 of the Federal
Aviation Administration Order 7400.9U, Airspace Designations and
Reporting Points, dated August 18, 2010, and effective September 15,
2010 is amended as follows:

Paragraph 6005 Class E airspace areas extending upward from 700
feet or more above the surface of the earth.

* * * * *

ANM OR E5 Lincoln City, OR [New]

Samaritan North Lincoln Hospital Heliport, OR
    (Lat. 44[deg]59'11'' N., long. 123[deg]59'39'' W.)

    That airspace extending upward from 700 feet above the surface
within 3-mile radius of Samaritan North Lincoln Hospital Heliport.

    Issued in Seattle, Washington, on June 30, 2011.
Christine Mellon,
Acting Manager, Operations Support Group, Western Service Center.
[FR Doc. 2011-17202 Filed 7-11-11; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 75, Number 221 (Wednesday, November 17, 2010)]
[Notices]
[Page 70224]
[FR Doc No: 2010-28915]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 13846-000]

Qualified Hydro 29, LLC; Notice of Preliminary Permit Application
Accepted for Filing and Soliciting Comments, Motions To Intervene, and
Competing Applications

November 9, 2010.
    On September 29, 2010, Qualified Hydro 29, LLC filed an
application, pursuant to section 4(f) of the Federal Power Act,
proposing to study the feasibility of the Mississinewa Lake Dam
Hydroelectric Project No. 13846, to be located at the existing
Mississinewa Lake Dam on the Mississinewa River, in the City of Peru,
in Miami County, Indiana. The Mississinewa Lake Dam is owned by the
United States government and operated by the U.S. Army Corps of
Engineers.
    The proposed project would consist of: (1) The existing earth
filled dam which is 140 feet in height with an overall length of 8,000
feet; (2) a new reinforced concrete powerhouse, 45 feet by 65 feet, to
be located downstream of the existing stilling basin; (3) a new 75
foot-long, 10.0-foot diameter penstock; (4) two vertical Kaplan
turbine-generator units with a combined capacity of 7.0 megawatts; (5)
a new 8 MVA substation; (6) a new two mile-long, 12.5 to 34.5-kilovolt
transmission line; and (7) appurtenant facilities. The project would
have an estimated annual generation of 21.0 gigawatt-hours.
    Applicant Contact: Ramya Swaminathan, 33 Commercial Street,
Gloucester, MA 01930,<PHONE_NUMBER>.
    FERC Contact: Tyrone A. Williams,<PHONE_NUMBER>.
    Deadline for filing comments, motions to intervene, and competing
applications (without notices of intent), or notices of intent to file
competing applications: 60 days from the issuance date of this notice.
Comments, motions to intervene, notices of intent, and competing
applications may be filed electronically via the Internet. See 18 CFR
385.2001(a)(1)(iii) and the instructions on the Commission's Web site
(http://www.ferc.gov/docs-filing/ferconline.asp) under the ``eFiling''
link. For a simpler method of submitting text only comments, click on
``Quick Comment.'' For assistance, please contact FERC Online Support
at FERCOnlineSupport.gov; call toll-free at<PHONE_NUMBER>; or, for
TTY, contact<PHONE_NUMBER>. Although the Commission strongly
recommends electronic filing, documents may also be paper-filed. To
paper-file, an original and eight copies should be mailed to: Kimberly
D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First
Street, NE., Washington, DC 20426. For more information on how to
submit these types of filings please go to the Commission's Web site
located at http://www.ferc.gov/filing-comments.asp.
    More information about this project, including a copy of the
application can be viewed or printed on the ``eLibrary'' link of
Commission's Web site at http://www.ferc.gov/docs-filing/elibrary.asp.
Enter the docket number (P-13846) in the docket number field to access
the document. For assistance, contact FERC Online Support.

Kimberly D. Bose,
Secretary.
[FR Doc. 2010-28915 Filed 11-16-10; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 77, Number 127 (Monday, July 2, 2012)]
[Notices]
[Pages 39314-39315]
[FR Doc No: 2012-16089]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67258; File No. SR-NASDAQ-2012-059]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Designation of a Longer Period for Commission Action on
Proposed Rule Change To Establish ``Benchmark Orders'' Under NASDAQ
Rule 4751(f)

June 26, 2012.
    On May 1, 2012, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to establish various ``Benchmark Orders'' under
NASDAQ Rule 4751(f). The

proposed rule change was published for comment in the Federal Register
on May 17, 2012.\3\ The Commission received no comments on the
proposal.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 66972 (May 11,
2012), 77 FR 29435 (May 17, 2012) (``Notice'').
---------------------------------------------------------------------------

    Section 19(b)(2) of the Act \4\ provides that, within 45 days of
the publication of notice of the filing of a proposed rule change, or
within such longer period up to 90 days as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding or as to which the self-regulatory organization
consents, the Commission shall either approve the proposed rule change,
disapprove the proposed rule change, or institute proceedings to
determine whether the proposed rule change should be disapproved. The
45th day for this filing is July 1, 2012. The Commission is extending
this 45-day time period.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

    The Commission finds that it is appropriate to designate a longer
period within which to take action on the proposed rule change so that
it has sufficient time to consider the proposal. The Benchmark Order
would allow NASDAQ members to enter a single order in a single security
that seeks to match the performance of one of three selected
benchmarks--Volume Weighted Average Price, Time Weighted Average Price
and Percent of Volume--over a pre-determined period of time. Benchmark
Orders would not be executed by the NASDAQ matching engine, but would
be directed to a system application dedicated to processing Benchmark
Orders (``Application''). The Application would generate Child Orders
to be sent to the NASDAQ matching engine or to the NASDAQ router, as
necessary, to achieve the desired benchmark selected by the entering
firm.
    Accordingly, the Commission, pursuant to Section 19(b)(2) of the
Act,\5\ designates August 15, 2012, as the date by which the Commission
should either approve or disapprove or institute proceedings to
determine whether to disapprove the proposed rule change.
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    \5\ 15 U.S.C. 78s(b)(2).
    \6\ 17 CFR 200.30-3(a)(31).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\6\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-16089 Filed 6-29-12; 8:45 am]
BILLING CODE 8011-01-P