
[Federal Register Volume 79, Number 20 (Thursday, January 30, 2014)]
[Notices]
[Pages 5012-5014]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-01808]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71388; File No. SR-Topaz-2014-03]


Self-Regulatory Organizations; Topaz Exchange, LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the 
Schedule of Fees

January 24, 2014.
    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 January 16, 2014, the Topaz Exchange, LLC (d/b/a ISE Gemini) 
(the ``Exchange'' or ``Topaz'') filed with the Securities and Exchange 
Commission the proposed rule change, as described in Items I, II, and 
III below, which items have been prepared by the self-regulatory 
organization. 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 the 
Substance of the Proposed Rule Change

    Topaz is proposing to amend its Schedule of Fees to specify the 
frequency with which the Exchange may change the Options Regulatory 
Fee. The text of the proposed rule change is available on the 
Exchange's Internet Web site at http://www.ise.com, at the principal 
office of the Exchange, 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 self-regulatory organization 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 the Schedule of Fees to specify the

[[Page 5013]]

frequency with which the Exchange may change the Options Regulatory Fee 
(``ORF'').
    The ORF is assessed by the Exchange to each member for all options 
transactions in both Standard Options and Mini Options executed or 
cleared by the member that are cleared by The Options Clearing 
Corporation (``OCC'') in the customer range, i.e., transactions that 
clear in the customer account of the member's clearing firm at OCC, 
regardless of the exchange on which the transaction occurs. The fee is 
collected indirectly from Members through their clearing firms by OCC 
on behalf of the Exchange. The dues and fees paid by Members go into 
the general funds of the Exchange, a portion of which is used to help 
pay the costs of regulation.
    In response to feedback from Members requesting greater certainty 
as to when ORF changes may occur, the Exchange proposes to specify in 
the Schedule of Fees that the Exchange may only increase or decrease 
the ORF semi-annually, and any such fee change will be effective on the 
first business day of February or August.\3\ In addition to submitting 
a proposed rule change to the Securities and Exchange Commission 
(``Commission'') as required by the Act to increase or decrease the 
ORF, the Exchange will notify members via circular of any anticipated 
change in the amount of the fee at least 30 calendar days prior to the 
effective date of the change. The Exchange believes that by providing 
guidance on the timing of any changes to the ORF, the Exchange would 
make it easier for Members to ensure their systems are configured to 
properly account for the ORF.
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    \3\ The Exchange will continue to monitor the amount of revenue 
collected from the ORF to ensure that it, in combination with its 
other regulatory fees and fines, does not exceed the Exchange's 
total regulatory costs.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\4\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act,\5\ in particular, in that it 
is an equitable allocation of reasonable dues, fees and other charges 
among Exchange members and other persons using its facilities, and does 
not unfairly discriminate between customers, issuers, brokers or 
dealers.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed change to limit changes to 
the ORF to twice a year on specific dates with advance notice is 
reasonable because it will give Members certainty on the timing of 
changes, if any, and better enable them to properly account for ORF 
charges among their customers. The Exchange believes that the proposed 
change is equitable and not unfairly discriminatory because it will 
apply in the same manner to all Members that are subject to the ORF and 
provide them with additional advance notice of changes to that fee. The 
Exchange notes that the proposed changes are consistent with recent fee 
changes made by NYSE Arca (``Arca'') and NYSE Amex Options (``Amex''), 
and will make it easier for members to ensure that their systems are 
configured to properly account for the ORF.\6\
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    \6\ See Securities Exchange Act Release Nos. 70500 (September 
25, 2013), 78 FR 60361 (October 1, 2013) (SR-NYSEArca-2013-91); 
70499 (September 25, 2013), 78 FR 60362 (October 1, 2013) (SR-
NYSEMKT-2013-76); [sic]
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change does not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act. The proposed change is not intended to address a competitive 
issue but rather to provide Members with better notice of any change 
that the Exchange may make to the ORF, which will make it easier for 
Members to ensure that their systems are configured to properly account 
for the ORF. Furthermore, as explained above, the proposed changes are 
substantially similar in all material respects to fee changes made by 
Arca and Amex.\7\ For these reasons, the Exchange does not believe that 
the proposed change will impair the ability of Members, or competing 
order execution venues to maintain their competitive standing in the 
financial markets.
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    \7\ Id.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from members or other interested 
parties.

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)(ii) of the Act,\8\ and subparagraph (f)(2) of Rule 19b-4 
thereunder,\9\ because it establishes a due, fee, or other charge 
imposed by Topaz.
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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such 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 shall institute proceedings to 
determine whether the proposed rule 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-Topaz-2014-03 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-Topaz-2014-03. 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

[[Page 5014]]

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-Topaz-2014-03, and should be submitted on or before 
February 20, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-01808 Filed 1-29-14; 8:45 am]
BILLING CODE 8011-01-P


