
[Federal Register Volume 78, Number 150 (Monday, August 5, 2013)]
[Notices]
[Pages 47469-47471]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-18752]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70064; File No. SR-CBOE-2013-078]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend the Fees Schedule To Include a $60 
Session Fee for the Series 56 (S501) Continuing Education

July 30, 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 July 25, 2013, 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 and II 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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.\3\ More 
specifically, the Exchange is proposing to make changes to the section 
``Regulatory Fees.'' Currently under the Exchange's Regulatory Fees, 
the Exchange charges a $100 session fee to registered persons at the 
Exchange for a continuing education (``CE'') requirement that is 
outlined in Exchange Rule 9.3A. The Exchange is now proposing to add a 
$60 session fee for those individuals that only have the Proprietary 
Trader (``Series 56'') registration.
---------------------------------------------------------------------------

    \3\ See Exchange Rule 2.20, which authorizes the Exchange, from 
time to time, to ``fix the fee and charges payable by Trading Permit 
Holders.''
---------------------------------------------------------------------------

    Exchange Rule 3.6A.08 outlines the registration and qualification 
requirements (including prerequisite examinations) for TPHs and TPH 
organizations conducting proprietary trading, market-making and/or 
effecting transactions on behalf of other broker dealers.\4\ Exchange 
Rule 9.3A requires all TPHs and TPH organizations to complete the 
Regulatory Element of the CE program beginning with the occurrence of 
``their second registration anniversary date and every three years 
thereafter or as otherwise prescribed by the Exchange.'' \5\ Recently, 
the Exchange amended Rule 9.3A to enumerate the different CE programs 
offered by the Exchange including the S501 Series 56 Proprietary Trader 
Continuing Education Program (``S501'').\6\ The Exchange is now 
proposing to outline the necessary fees associated with the Regulatory 
Element of the S501.
---------------------------------------------------------------------------

    \4\ See Exchange Rule 3.6A.08.
    \5\ See Exchange Rule 9.3A(a).
    \6\ See Securities Exchange Act Release No. 34-70027 (July 23, 
2013) (SR-CBOE-2013-076) (immediately effective rule change to 
specify the different CE requirements for registered persons based 
upon their registration with the Exchange).
---------------------------------------------------------------------------

    The Exchange has determined that these changes are necessary to 
administer the Series 56 CE program. Specifically, the $60 session fee 
will be used to fund the CE program administered to Proprietary Traders 
that have a Series 56 registration \7\ and are required to complete the 
S501. The $60 session fee is less than the $100 session fee (currently 
in the Exchange's fee schedule) for the S101 General Program for Series 
7 registered persons (``S101'') as the Series 7 examination is a more 
comprehensive examination, and, thus, the CE is more comprehensive as 
well. Thus, the Exchange believes the $60 fee is reasonable and 
proportional fee based upon the programming of the CE. In addition, the 
$60 fee will only be used for the administration of the CE versus the 
S101 which utilizes the $100 fee for both development and 
administration. The costs associated with the development costs [sic] 
of the S501 are included in the examination fee.
---------------------------------------------------------------------------

    \7\ Both individuals that have successfully passed the Series 56 
examination and individuals that have had the examination waived by 
the Exchange are required to take the S501.
---------------------------------------------------------------------------

    Because the CE element is separate and different from the CE 
already administered, the proposed change would put TPHs and TPH 
organizations on notice of the associated fees. The proposed fee would 
allow the Exchange to fund the S501 which is more tailored to the 
Series 56 registration. Also, the Exchange believes other exchanges 
will be assessing the same fee for this CE program. The proposed 
changes are to take effect on August 19, 2013.

[[Page 47470]]

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.\8\ Specifically, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \9\ 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. 
Additionally, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \10\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ Id.
---------------------------------------------------------------------------

    In particular, the proposed rule change is equitable and not 
unfairly discriminatory as it is allocated to all individuals with a 
Series 56 registration which is required under Exchange Rule 3.6A. In 
addition, the fee is reasonable as it lower than the previously 
assessed CE fee because the S501 is more limited than the S101, and the 
fee is only intended to recoup the costs of the administration of the 
program. Also, the Exchange believes other exchanges will be assessing 
the same fee for this CE program. The Exchange believes the proposed 
rule change will protect investors and the public interest by covering 
the administration of the program and allow the Exchange to tailor a CE 
fee for the Series 56. This allows the Exchange to better prevent 
fraudulent and manipulative acts and practices because the CE will 
properly educate Proprietary Traders in the topics of securities laws 
and other rules and help them to comply with those laws and rules.
    Finally, the Exchange also believes the proposed rule change is 
consistent with Section 6(b)(1) of the Act,\11\ which provides that the 
Exchange be organized and have the capacity to be able to carry out the 
purposes of the Act and to enforce compliance by the individuals with a 
series 56 registration with the Act, the rules and regulations 
thereunder, and the rules of the Exchange. The proposed rule change is 
designed to fund the administration of the S501, and, more 
specifically, to help more closely cover the costs of educating 
individuals that hold a Series 56 registration. Thus, the proposed 
changes will help the Exchange to enforce compliance of its TPHs with 
the Act and Exchange rules.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------

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. In particular, the proposed 
rule change will not impose any burden on intermarket competition as it 
will merely serve to aid the Exchange in fulfilling its obligations as 
a Self-Regulatory Organization by further funding the administration of 
the new CE. The proposed rule change will not impose any burden on 
intramarket competition as all TPHs and TPH organizations are required 
to pass a qualification exam as outline in Rule 3.6A and fulfill a CE 
requirement as outlined in Rule 9.3A. In addition, the Exchange 
believes other exchanges will be assessing the same fee for this CE 
program.

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 proposed rule change is designated by the Exchange as 
establishing or changing a due, fee, or other charge, applicable only 
to a member, thereby qualifying for effectiveness on filing pursuant to 
Section 19(b)(3)(A)(ii) of the Act \12\ and subparagraph (f)(2) of Rule 
19b-4 \13\ thereunder.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \13\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of this 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.

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-2013-078 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-2013-078. 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-2013-078 and should be 
submitted on or before August 26, 2013.


[[Page 47471]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-18752 Filed 8-2-13; 8:45 am]
BILLING CODE 8011-01-P


