Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule in Connection With the New Linkage Plan, 64798-64799 [E9-29136]

Download as PDF 64798 Federal Register / Vol. 74, No. 234 / Tuesday, December 8, 2009 / Notices Exchange believes that the proposed new cap on initial and annual listing fees for structured products represents an equitable allocation of fees among its listed companies, as all companies listing structured products will be subject to the same fee schedule. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange 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. 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 Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments number should be included on the subject line if e-mail 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 (https://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 inspection and copying in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing will also 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–NYSE–2009–117 and should be submitted on or before December 29, 2009. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–29141 Filed 12–7–09; 8:45 am] 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: BILLING CODE 8011–01–P Electronic Comments Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule in Connection With the New Linkage Plan WReier-Aviles on DSKGBLS3C1PROD with NOTICES • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NYSE–2009–117 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–NYSE–2009–117. This file VerDate Nov<24>2008 15:16 Dec 07, 2009 Jkt 220001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61084; File No. SR–CBOE– 2009–088] December 1, 2009. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on November 23, 2009, the Chicago Board Options 6 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00139 Fmt 4703 Sfmt 4703 Exchange, Incorporated (‘‘CBOE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘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. 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 (https:// www.cboe.org/legal), at the Exchange’s Office of the Secretary, and at the Commission. 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 All current U.S. options exchanges recently adopted a plan to provide a framework for order protection and locked and crossed market handling called the Options Order Protection and Locked/Crossed Market Plan (the ‘‘New Plan’’). The Plan replaces the Plan for the Purpose of Creating and Operating an Intermarket Option Linkage (the ‘‘Old Plan’’). The Old Plan also provided a framework for addressing order protection and locked/crossed markets, but unlike the New Plan, the Old Plan utilized the Options Clearing Corporation as a ‘‘hub’’ for the transmission of ‘‘linkage orders’’ between exchanges. There are three types of linkage orders under the Old Plan, P/A Orders (orders sent on behalf of a non-broker dealer customer), P Orders (orders send for the principal account of an exchange market-maker), and Satisfaction Orders (orders reflecting the terms of an order resting E:\FR\FM\08DEN1.SGM 08DEN1 WReier-Aviles on DSKGBLS3C1PROD with NOTICES Federal Register / Vol. 74, No. 234 / Tuesday, December 8, 2009 / Notices on an exchange that was traded-through by another market). Although not required by the Old Plan, CBOE sought to access better prices on other exchanges on behalf of non-customer orders received by CBOE by routing P orders to such other exchanges. Section 21 of the CBOE Fees Schedule provides that costs associated with execution of such P orders on other exchanges are passed through to the members submitting the non-customer orders to CBOE. Under the New Plan, exchanges access each other directly and not through a hub (i.e. through members that can provide ‘‘front-door’’ access). Now that CBOE is migrating away from the Old Plan’s use of the hub to access other markets (including using P orders), the Exchange seeks to modify its Fees Schedule to account for the new method of routing non-customer orders pursuant to the New Plan. CBOE will continue to route to other exchanges on behalf of non-customer orders, but it will do so using the same memberprovided direct access that is used for customer orders. CBOE does not charge routing or execution fees for customer orders routed to other exchanges. However, for any non-customer order routed to other exchanges, CBOE will assess the following costs to the member that submitted the non-customer order to CBOE: (i) Charge a $0.05 per contract routing fee, (ii) pass through all actual charges assessed by the away exchange(s) (these are calculated on an order-by-order basis since different away exchanges charge different amounts), and (iii) charge CBOE’s customary execution fees applicable to the order. The routing fee helps offset costs incurred by the Exchange in connection with using an unaffiliated broker-dealer to access other exchanges. Passing through charges assessed by other exchanges for ‘‘linkage’’ executions and charging for related CBOE executions are appropriate because non-customer order flow can route directly to those exchanges if desired and the Exchange chooses not to absorb those costs at this time. CBOE notes that not all exchanges route on behalf of non-customer orders, and that this function is an ‘‘extra’’ service provided by CBOE to its members.3 Members are always free to route directly to other markets or to specify that CBOE not route orders away on their behalf. The new fee will become effective on November 24, 2009. Section 21 of the Fees Schedule will be deleted in the near future (after routing through the hub has ceased). 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934 (‘‘Act’’),4 in general, and furthers the objectives of Section 6(b)(4) 5 of the Act in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among CBOE members and other persons using its facilities. 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)(ii) 6 of the Act and subparagraph (f)(2) of Rule 19b–4 7 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate 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. 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: • Send an e-mail to rule-comments@sec.gov. Please include File Number SR–CBOE–2009–088 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–2009–088. This file number should be included on the subject line if e-mail 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 (https://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 inspection and copying 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 will also 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 No. SR–CBOE– 2009–088 and should be submitted on or before December 29, 2009. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–29136 Filed 12–7–09; 8:45 am] BILLING CODE 8011–01–P Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or 4 15 3 For example, see Section VIII of Nasdaq OMX Phlx fee schedule (https://www.nasdaqtrader.com/ Micro.aspx?id=phlxpricing). VerDate Nov<24>2008 15:16 Dec 07, 2009 Jkt 220001 U.S.C. 78f(b). U.S.C. 78f(b)(4). 6 15 U.S.C. 78s(b)(3)(A)(ii). 7 17 CFR 240.19b–4(f)(2). 5 15 PO 00000 Frm 00140 Fmt 4703 Sfmt 4703 64799 8 17 E:\FR\FM\08DEN1.SGM CFR 200.30–3(a)(12). 08DEN1

Agencies

[Federal Register Volume 74, Number 234 (Tuesday, December 8, 2009)]
[Notices]
[Pages 64798-64799]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-29136]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61084; File No. SR-CBOE-2009-088]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend Its Fees Schedule in Connection With the 
New Linkage Plan

December 1, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on November 23, 2009, the Chicago Board Options Exchange, Incorporated 
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``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.
---------------------------------------------------------------------------

    \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 (https://www.cboe.org/legal), at the Exchange's Office of the Secretary, and at 
the Commission.

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
    All current U.S. options exchanges recently adopted a plan to 
provide a framework for order protection and locked and crossed market 
handling called the Options Order Protection and Locked/Crossed Market 
Plan (the ``New Plan''). The Plan replaces the Plan for the Purpose of 
Creating and Operating an Intermarket Option Linkage (the ``Old 
Plan''). The Old Plan also provided a framework for addressing order 
protection and locked/crossed markets, but unlike the New Plan, the Old 
Plan utilized the Options Clearing Corporation as a ``hub'' for the 
transmission of ``linkage orders'' between exchanges. There are three 
types of linkage orders under the Old Plan, P/A Orders (orders sent on 
behalf of a non-broker dealer customer), P Orders (orders send for the 
principal account of an exchange market-maker), and Satisfaction Orders 
(orders reflecting the terms of an order resting

[[Page 64799]]

on an exchange that was traded-through by another market). Although not 
required by the Old Plan, CBOE sought to access better prices on other 
exchanges on behalf of non-customer orders received by CBOE by routing 
P orders to such other exchanges. Section 21 of the CBOE Fees Schedule 
provides that costs associated with execution of such P orders on other 
exchanges are passed through to the members submitting the non-customer 
orders to CBOE.
    Under the New Plan, exchanges access each other directly and not 
through a hub (i.e. through members that can provide ``front-door'' 
access). Now that CBOE is migrating away from the Old Plan's use of the 
hub to access other markets (including using P orders), the Exchange 
seeks to modify its Fees Schedule to account for the new method of 
routing non-customer orders pursuant to the New Plan. CBOE will 
continue to route to other exchanges on behalf of non-customer orders, 
but it will do so using the same member-provided direct access that is 
used for customer orders. CBOE does not charge routing or execution 
fees for customer orders routed to other exchanges. However, for any 
non-customer order routed to other exchanges, CBOE will assess the 
following costs to the member that submitted the non-customer order to 
CBOE: (i) Charge a $0.05 per contract routing fee, (ii) pass through 
all actual charges assessed by the away exchange(s) (these are 
calculated on an order-by-order basis since different away exchanges 
charge different amounts), and (iii) charge CBOE's customary execution 
fees applicable to the order. The routing fee helps offset costs 
incurred by the Exchange in connection with using an unaffiliated 
broker-dealer to access other exchanges. Passing through charges 
assessed by other exchanges for ``linkage'' executions and charging for 
related CBOE executions are appropriate because non-customer order flow 
can route directly to those exchanges if desired and the Exchange 
chooses not to absorb those costs at this time.
    CBOE notes that not all exchanges route on behalf of non-customer 
orders, and that this function is an ``extra'' service provided by CBOE 
to its members.\3\ Members are always free to route directly to other 
markets or to specify that CBOE not route orders away on their behalf. 
The new fee will become effective on November 24, 2009. Section 21 of 
the Fees Schedule will be deleted in the near future (after routing 
through the hub has ceased).
---------------------------------------------------------------------------

    \3\ For example, see Section VIII of Nasdaq OMX Phlx fee 
schedule (https://www.nasdaqtrader.com/Micro.aspx?id=phlxpricing).
---------------------------------------------------------------------------

2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (``Act''),\4\ in general, and furthers 
the objectives of Section 6(b)(4) \5\ of the Act in particular, in that 
it is designed to provide for the equitable allocation of reasonable 
dues, fees, and other charges among CBOE members and other persons 
using its facilities.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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)(ii) \6\ of the Act and subparagraph (f)(2) of Rule 19b-4 
\7\ thereunder.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \7\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate 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.

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 (https://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2009-088 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-2009-088. This file 
number should be included on the subject line if e-mail 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 (https://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 inspection and 
copying 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 will 
also 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 No. SR-CBOE-
2009-088 and should be submitted on or before December 29, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-29136 Filed 12-7-09; 8:45 am]
BILLING CODE 8011-01-P
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