Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Exchange Fees for Fiscal Year 2010, 2166-2170 [2010-537]

Download as PDF 2166 Federal Register / Vol. 75, No. 9 / Thursday, January 14, 2010 / Notices filed at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster: Primary Municipality: Aibonito. Contiguous Municipalities: Puerto Rico: Barranquitas, Cayey, Cidra, Coamo, Salinas. The Interest Rates are: Percent For Physical Damage Homeowners with Credit Available Elsewhere ...................... Homeowners without Credit Available Elsewhere .............. Businesses with Credit Available Elsewhere ...................... Businesses without Credit Available Elsewhere .............. Non-Profit Organizations with Credit Available Elsewhere ... Non-Profit Organizations without Credit Available Elsewhere ..................................... For Economic Injury Businesses & Small Agricultural Cooperatives Without Credit Available Elsewhere .............. Non-Profit Organizations without Credit Available Elsewhere ..................................... 5.125 2.562 6.000 4.000 3.625 3.000 4.000 3.000 The number assigned to this disaster for physical damage is 12004 6 and for economic injury is 12005 0. The Commonwealth which received an EIDL Declaration # is Puerto Rico. (Catalog of Federal Domestic Assistance Numbers 59002 and 59008) Dated: January 7, 2010. Karen G. Mills, Administrator. [FR Doc. 2010–572 Filed 1–13–10; 8:45 am] BILLING CODE 8025–01–P SECURITIES AND EXCHANGE COMMISSION Proposed Collection; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of Investor Education and Advocacy, Washington, DC 20549–0213. pwalker on DSK8KYBLC1PROD with NOTICES Extension: Rule 17Ad–2(c), (d), and (h); SEC File No. 270–149; OMB Control No. 3235–0130. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange Commission (‘‘Commission’’) is soliciting comments on the existing collection of information provided for in Rule 17Ad–2(c), (d), and VerDate Nov<24>2008 17:36 Jan 13, 2010 Jkt 220001 (h), (17 CFR 240.17Ad–2(c), (d), and (h)), under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). The Commission plans to submit this existing collection of information to the Office of Management and Budget for extension and approval. Rule 17Ad–2(e),(d), and (h) enumerates the requirements with which transfer agents must comply to inform the Commission or the appropriate regulator of a transfer agent’s failure to meet the minimum performance standards set by the Commission rule by filing a notice. While it is estimated there are 740 transfer agents, approximately five notices pursuant to Rule 17Ad–2(c), (d), and (h) are filed annually. In view of (a) The readily available nature of most of the information required to be included in the notice (since that information must be compiled and retained pursuant to other Commission rules); (b) the summary fashion in which such information must be presented in the notice (most notices are one page or less in length); and (c) the experience of the staff regarding the notices, the Commission staff estimates that, on the average, most notices require approximately one-half hour to prepare. The Commission staff estimates that transfer agents spend an average of two and a half hours per year complying with the rule. Written comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission’s estimates of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information on respondents; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. Please direct your written comments to: Charles Boucher, Director/Chief Information Officer, Securities and Exchange Commission, c/o Shirley Martinson, 6432 General Green Way, Alexandria, Virginia 22312 or send an e-mail to: PRA_Mailbox@sec.gov. Dated: January 6, 2010. Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–546 Filed 1–13–10; 8:45 am] BILLING CODE 8011–01–P PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meeting; Notice Federal Register Citation of Previous Announcement: 75 FR 1425, January 11, 2010. STATUS: Closed Meeting. PLACE: 100 F Street, NE., Washington, DC. DATE AND TIME OF PREVIOUSLY ANNOUNCED MEETING: Thursday, January 14, 2010 at 2 p.m. Additional Item. The following item has been added to the Thursday, January 14, 2010 Closed Meeting agenda: Post argument discussion. Commissioner Walter, as duty officer, determined that Commission business required the above change. At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact the Office of the Secretary at (202) 551–5400. CHANGE IN THE MEETING: Dated: January 11, 2010. Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–649 Filed 1–12–10; 11:15 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61295; File No. SR–CBOE– 2009–098] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Exchange Fees for Fiscal Year 2010 January 6, 2010. 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 December 30, 2009, the Chicago Board Options Exchange, Incorporated (‘‘Exchange’’ or ‘‘CBOE’’) 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 CBOE. The Exchange has designated this proposal as one establishing or changing a due, fee, or other charge imposed by the Exchange under Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b–4(f)(2) 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 2 17 E:\FR\FM\14JAN1.SGM 14JAN1 Federal Register / Vol. 75, No. 9 / Thursday, January 14, 2010 / Notices thereunder,4 which renders the proposal effective upon filing with the Commission. 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 CBOE proposes to amend its Fees Schedule to make various changes for Fiscal Year 2010. The text of the proposed rule change is available on the Exchange’s Web site (https:// www.cboe.org/legal), on the Commission’s Web site (https:// www.sec.gov), at the Exchange’s principal office, 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, CBOE included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. CBOE has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. pwalker on DSK8KYBLC1PROD with NOTICES A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this proposed rule change is to amend the CBOE Fees Schedule to make various fee changes. The proposed changes are the product of the Exchange’s annual budget review. The fee changes were approved by the Exchange’s Board of Directors pursuant to CBOE Rule 2.22 and will take effect on January 4, 2010. The Exchange proposes to amend certain fees, eliminate several fees to simplify the Fees Schedule, and clarify the Fees Schedule in several respects. The Exchange also seeks to establish fees for transactions in S&P 500 Dividend Index (DVS) options. A. The Exchange proposes to amend the following fees: Index Options Transaction Fees: The Exchange proposes to amend customer, voluntary professional and brokerdealer transaction fees for certain index options to create consistent fees for similar products and to simplify the fee structure for index options. The 4 17 CFR 240.19b–4(f)(2). VerDate Nov<24>2008 17:36 Jan 13, 2010 Jkt 220001 Exchange proposes to increase the customer (‘‘C’’ origin code) transaction fee in S&P 100 options (OEX and XEO) from $.30 per contract to $.40 per contract, which is the same rate charged to customers for certain other CBOE proprietary index options (Dow Jones Industrial Average (DXL) and volatility index options). The Exchange proposes to reduce the customer transaction fee for Morgan Stanley Retail Index (MVR) options from $.40 per contract to $.18 per contract. The Exchange proposes to increase the voluntary professional (‘‘W’’ origin code) transaction fee in OEX options from $.20 per contract to $.40 per contract and in XEO options from $.30 per contract to $.40 per contract.5 The Exchange proposes to increase the broker-dealer 6 transaction fee in OEX and XEO options from $.30 per contract to $.40 per contract. Currently, brokerdealer transaction fees for volatility index options are $.25 per contract for manual executions and $.45 per contract for electronic executions. The Exchange proposes to charge $.40 per contract for manual and electronic broker-dealer executions in volatility index options. Broker-dealer transaction fees are currently $.25 per contract for MVR options. The Exchange proposes to increase the broker-dealer transaction fee for electronic executions in MVR options to $.45 per contract. ETF Options Transaction Fees: The Exchange proposes to amend brokerdealer transaction fees for certain ETF options to create consistent fees for similar products and to simplify the fee structure for ETF options. Currently, the broker-dealer transaction fee in QQQQ (PowerShares QQQ Trust) options and IWM (iShares Russell 2000 Index Fund) options is $.25 per contract. The Exchange proposes to increase the broker-dealer transaction fee for electronic executions in QQQQ and IWM options to $.45 per contract. Surcharge Fees: The Exchange currently charges a $.06 per contract surcharge fee on all non-public 5 The Commission notes that on December 24, 2009, CBOE filed a proposed rule change relating to fees for professional orders that also would become operative on January 4, 2010. See SR– CBOE–2009–101. 6 Broker-Dealer transaction fees apply to brokerdealer orders (orders with ‘‘B’’ origin code), nonmember market-maker orders (orders with ‘‘N’’ origin code) and orders from specialists in the underlying security (orders with ‘‘Y’’ origin code). See CBOE Fees Schedule, Footnote 16. Brokerdealer transaction fees also apply to certain orders with ‘‘F’’ origin code, specifically, orders from OCC members that are not CBOE members. The Exchange proposes to clarify Footnote 16 in this regard. PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 2167 customer 7 transactions in OEX, XEO, SPX and volatility index options. The Exchange proposes to increase the surcharge fee for OEX, XEO and SPX options to $.10 per contract and for volatility index options to $.08 per contract. The surcharge fee is assessed to help the Exchange recoup license fees the Exchange pays to index licensors for the right to list these products for trading and is similar to surcharge fees charged by other exchanges. Floor Brokerage Fees: The Exchange currently charges floor brokers executing orders in OEX, SPX and DXL options $.04 per contract and $.02 per contract for crossed orders. The Exchange proposes to charge floor brokers executing orders in volatility index options $.02 per contract and $.01 per contract for crossed orders. Cabinet Trade Transaction Fees: The Exchange has traditionally not assessed transaction fees for accommodation liquidations (‘‘cabinet trades’’).8 Cabinet trades refer to trades in listed options that are worthless or not actively traded. Due to the expansion of option classes participating in the Penny Pilot Program, the Exchange has found it increasingly difficult to distinguish cabinet trades from trades in Penny Pilot options classes for purposes of this fee waiver program. Therefore, the Exchange proposes to eliminate the fee waiver and begin assessing transaction fees for cabinet trades effective January 4, 2010. Strategy Fee Cap: The Exchange currently caps market-maker, firm, and broker-dealer transaction fees associated with dividend, merger and short stock interest strategies, as described in Footnote 13 of the CBOE Fees Schedule.9 Transaction fees are capped at $1,000 for all such strategies executed on the same trading day in the same options class, and are further capped at $50,000 per month per initiating member or firm. The Exchange proposes to reduce the per month per initiating member or firm cap from $50,000 to $25,000. The proposed fee cap reduction would enable the Exchange to remain competitive for these types of 7 The Surcharge Fee applies to all non-public customer transactions (i.e. CBOE and non-member market-maker, member firm and broker-dealer), including voluntary professionals and linkage orders except for satisfaction orders. See CBOE Fees Schedule, Section 1 (Index Options) and Footnote 14. The Commission notes that on December 24, 2009, CBOE filed a proposed rule change relating to fees for professional orders that also would become operative on January 4, 2010. See SR– CBOE–2009–101. 8 See CBOE Fees Schedule, Footnote 7. 9 The Strategy Fee Cap is in effect as a pilot program that is due to expire on March 1, 2010. E:\FR\FM\14JAN1.SGM 14JAN1 pwalker on DSK8KYBLC1PROD with NOTICES 2168 Federal Register / Vol. 75, No. 9 / Thursday, January 14, 2010 / Notices strategies and is similar to strategy fee caps at other options exchanges. Customer Large Trade Discount Program: Customer (‘‘C’’ origin code) transaction fees are capped for large trades in index, ETF and HOLDRs options.10 Currently, the Exchange charges only the first 7,500 contracts of a customer order in volatility index options. The Exchange proposes to charge only the first 5,000 contracts of a customer order in volatility index options in order to attract additional order flow to the Exchange. Membership Application Fees: Membership application fees are set forth in Section 11 of the CBOE Fees Schedule as well as in a regulatory circular (‘‘Membership Fees Circular’’). The Exchange proposes to amend certain membership application fees as reflected in the Fees Schedule and Membership Fees Circular included as part of Exhibit 5. Specifically, the Exchange proposes to increase the NonMember Customer Business Fee from $1,000 to $2,500, the Lessor Firm Fee from $1,000 to $2,000, and the Renewal/ Change of Status Fee from $250 to $500. The proposed changes would help the Exchange recover its costs in processing these applications. B. The Exchange proposes to eliminate the following fees (with one exception as noted below): Customer Complex Order Fee: The Exchange proposes to eliminate the transaction fee of $.18 per contract for customer complex orders in equity and QQQQ options that ‘‘take liquidity’’ from the Exchange’s complex order book.11 Member Firm Proprietary Sliding Scale—License Fee Add-On: The Exchange’s Member Firm Proprietary Sliding Scale program reduces a member firm’s standard $.20 per contract transaction fee if the member firm reaches the volume thresholds set forth in the sliding scale in a month.12 Due to the Exchange’s obligation to pay license fees on certain products, the Exchange currently assesses a $.10 per contract license fee (a total of 10 cents per contract less any surcharge fees already assessed) on all licensed products except Nasdaq-100 (MNX, NDX) and Russell 2000 (RUT) options when a firm reaches the fifth tier of the sliding scale. The Exchange proposes to eliminate this license fee add-on to simplify the Fees Schedule. The Exchange will continue to charge the surcharge fees set forth in Section 1 10 See CBOE Fees Schedule, Section 18. CBOE Fees Schedule, Section 1 and Footnote 12. 12 See CBOE Fees Schedule, Section 1 and Footnote 11. 11 See VerDate Nov<24>2008 17:36 Jan 13, 2010 Jkt 220001 (Index Options) of the Fees Schedule on trades in licensed products when a firm reaches the fifth tier of the sliding scale. Miscellaneous Fees: The following fees are proposed to be eliminated as they are outdated and/or the Exchange has determined no longer to charge them: Installation, Relocation and Removal fees for single line phones under Section 8(F)(2) of the Fees Schedule; Installation, Relocation and Removal fees for Thomson13 market data trading floor terminals, fees for Thomson’s NYSE OpenBook data, and the Installation fee of $500 for satellite TV under Section 8(F)(10) of the Fees Schedule; Trade Processing Services fees (Electronic Output/Input Services and Market-Maker Paper Ticket Fees) under Section 9 of the Fees Schedule, except for the $.0025 per contract side fee for matched and unmatched data; Fees for electronic and paper filing of FOCUS reports under Section 12 of the Fees Schedule; Fee for a service provided to member firms by the Exchange to facilitate member firm payments to floor brokers for except for the [sic]14 floor brokerage services (Floor Broker Payment Program) under Section 13 of the Fees Schedule; Passthrough of periodic license or royalty fees, the fee for a hard copy subscription to the Exchange Bulletin, and the CFLEX Log-in fee under Section 15 (Miscellaneous) of the Fees Schedule; and Circuit Charges under Section 16 of the Fees Schedule.15 C. The Exchange proposes the following Fees Schedule clarifications: Floor Brokerage Fees: The Exchange proposes to clarify Footnote 5 of the Fees Schedule relating to floor 13 The Exchange also proposes to replace the reference to ‘‘ILX’’ in Section 8 of the Fees Schedule with ‘‘Thomson’’ to reflect the replacement of the ILX service with Thomson’s service. ILX is a division of Thomson Financial. 14 The Exchange inadvertently included the phrase ‘‘except for the’’ in its filing with the Commission and intended the text of this portion of the ‘‘Miscellaneous Fees’’ section to read: ‘‘[f]ee for a service provided to member firms by the Exchange to facilitate member firm payments to floor brokers for floor brokerage services (Floor Broker Payment Program) under Section 13 of the Fees Schedule * * *.’’ Telephone call between Geoffrey Pemble, Special Counsel, Commission, and Jaime Galvan, Senior Attorney, CBOE, January 5, 2010. 15 The Exchange also proposes the following clean-up changes to the Fees Schedule. The Exchange proposes to delete references to the CBOE S&P 500 BuyWrite Index (1/10th value) (‘‘BXO’’) and CBOE S&P 500 Three-Month Realized Volatility (‘‘RUH’’) from Section 1 (Index Options) to the Fees Schedule since the Exchange no longer trades these two classes. See also SR–CBOE–2009–054 (deleting RUH and BXO references from Footnote 6 to Fees Schedule). The Exchange also proposes to delete the ‘‘CBOEdirect Connectivity Fees’’ line item from Section 17 because those fees are now located in Section 16 of the Fees Schedule. PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 brokerage fees in three respects. First, the Exchange proposes to delete the sentence regarding assessment of the fee to Designated Primary Market-Makers (‘‘DPMs’’) because DPMs no longer have an agency function. Second, the Exchange proposes to clarify that if a market-maker executes an order for an account in which the market-maker is not a registered participant as reflected in the Exchange’s Membership Department records, the market-maker will be assessed a floor brokerage fee. Third, the Exchange proposes to clarify that order ID data is not required to be the same on both the buy and sell side of an order in order to be eligible for the discounted ‘‘crossed’’ rate. Disputed Charges: The Exchange proposes to add to the Fees Schedule as Footnote 7 a statement that after three months, all fees as assessed by the Exchange are considered final by the Exchange. The purpose of this change is to encourage members to promptly review their Exchange invoices so that any disputed charges can be addressed in a timely manner. Member Firm Proprietary Sliding Scale: The Exchange proposes to clarify Footnote 11 of the Fees Schedule relating to the Member Firm Proprietary Sliding Scale in three respects. First, the Exchange proposes to amend Footnote 11 to clarify that each member firm is responsible for notifying the Exchange’s Membership Department of all of its affiliations with other members so that contracts of the firm and its affiliates may be aggregated for purposes of the sliding scale. Second, the Exchange proposes to clarify that it will aggregate the activity of separate member firms for purposes of the sliding scale if there is at least 75% common ownership between the firms as reflected on each firm’s Form BD, Schedule A, which is the same way Exchange aggregates trading activity for the Liquidity Provider Sliding Scale.16 Third, the Exchange proposes to clarify that a member firm’s contracts executed pursuant to an OCC Clearing Member Trade Assignment (CMTA) agreement (i.e., executed by another clearing firm and then transferred to the member firm’s account at the OCC) are aggregated with the member firm’s nonCMTA contracts for purposes of the sliding scale. Position Transfer Fee: The Exchange charges a fee of $.02 per contract side for options positions transferred pursuant to Rule 6.49A.17 The fee helps 16 See CBOE Fees Schedule, Footnote 10. Rule 6.49A provides for a special procedure to permit option positions to be offered on the floor of the Exchange in the event that the 17 CBOE E:\FR\FM\14JAN1.SGM 14JAN1 Federal Register / Vol. 75, No. 9 / Thursday, January 14, 2010 / Notices pwalker on DSK8KYBLC1PROD with NOTICES offset costs the Exchange incurs in providing services to accommodate both on-floor and off-floor transfers of positions.18 The fee is capped at $25,000 per transfer. The Exchange proposes to clarify the application of the $25,000 fee cap. Specifically, the Exchange proposes to clarify that for all on-floor transfers, both the position transferor (seller) and the transferee (buyer) are assessed a fee of $.02 per contract with a cap of $12,500 for each. If there are multiple transferees (buyers), each transferee is assessed a fee of $.02 per contract up to the $12,500 cap for the transferee side of the transfer package. For any off-floor transfer where regulatory review of a proposed transfer is solicited to determine whether the proposed transfer meets the off-floor transfer provisions of Rule 6.49A, the initiator of the review is assessed a fee of $.02 per contract with a cap of $25,000. If it is determined the position transfer must be affected on-floor, only the on-floor fee will be assessed. Customer Large Trade Discount Program: The Exchange proposes to amend Section 18 of the Fees Schedule to clarify the calculation of the fee cap. The Exchange proposes to clarify that it will look at the trade date and order ID on each trade record to determine the qualification of an order for the fee cap. The order ID on each trade record must be the same in order for the Exchange to tie the trade records to the same order and accumulate the total contracts. The Exchange also proposes to clarify that for complex orders, the total contracts of an order (all legs) are counted for purposes of calculating the fee cap. D. The Exchange proposes to establish fees for DVS options. The Exchange recently received approval to list and trade options on the S&P 500 Dividend Index, which represents the accumulated ex-dividend amounts of all S&P 500 Index component securities over a specified accrual period (e.g., quarterly, semiannually, annually).19 Consistent with the changes being proposed in this filing, the amount of the transactions fees for DVS options shall be as follows: positions are being transferred as part of a sale or disposition of all or substantially all of the assets or options positions of the transferring party where the transferring party would not continue to be involved in managing or owning the transferred positions. The rule also provides for off-floor transfers of positions based on certain specified exemptions, as well as with the approval of the Exchange’s President under extraordinary circumstances. 18 See Securities Exchange Act Release No. 59193 (January 2, 2009), 74 FR 972 (January 9, 2009). 19 See Securities Exchange Act Release No. 61136 (December 10, 2009) (approving SR–CBOE–2009– 022). VerDate Nov<24>2008 17:36 Jan 13, 2010 Jkt 220001 • $0.20 per contract for Market-Maker and Designated Primary Market-Maker transactions; 20 • $0.20 per contract for member firm proprietary transactions; • $0.40 per contract for manually executed broker-dealer transactions; • $0.40 per contract for electronically executed broker-dealer transactions; • $0.40 per contract for voluntary professional transactions;21 • $0.40 per contract for customer transactions; and • $0.10 per contract CFLEX surcharge fee. The Exchange also proposes to adopt a $.10 per contract surcharge fee on all non-public customer transactions in DVS options to help the Exchange recoup license fees the Exchange pays to the reporting authority. The proposed surcharge fee is identical to the surcharge fee proposed to be increased from $0.06 per contract to $0.10 for nonpublic customer transactions in OEX, XEO and SPX options. The Exchange’s Liquidity Provider Sliding Scale shall apply to transaction fees in DVS options, but the Exchange’s marketing fee22 shall not apply. The Exchange believes the rule change will further the Exchange’s goal of introducing new products to the marketplace that are competitively priced.23 2. Statutory Basis The Exchange believes the proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934 (‘‘Act’’),24 in general, and furthers the objectives of Section 6(b)(4)25 of the Act in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. The Exchange believes the proposed index and ETF options transaction fee changes and floor brokerage fee change would create consistent fees for similar products and help to simplify the fee structure for these options. The proposed changes to the Strategy Fee Cap and Customer Large Trade Discount Program would result in reduced fees for market participants. The proposed changes to 20 This is the standard rate that is subject to the Liquidity Provider Sliding Scale as set forth in Footnote 10 to the Fees Schedule. 21 The Commission notes that on December 24, 2009, CBOE filed a proposed rule change relating to fees for professional orders that also would become operative on January 4, 2010. See SR– CBOE–2009–101. 22 See Footnote 6 of the Fees Schedule. 23 Linkage order fees are inapplicable for options on CBOE’s proprietary products. 24 15 U.S.C. 78f(b). 25 15 U.S.C. 78f(b)(4). PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 2169 surcharge fees and membership application fees would help the Exchange recover costs. The Exchange believes the proposed fee eliminations and Fees Schedule clarifications would update and simplify the Fees Schedule. With respect to establishing fees for DVS options, the Exchange believes the new fees proposed by this filing are equitable and reasonable in that they will further the Exchange’s goal of introducing new products to the marketplace that are competitively priced and will help the Exchange recoup license fees that the Exchange pays to the reporting authority. 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 Because the foregoing rule change establishes or changes a due, fee, or other charge imposed by the Exchange, it has become effective pursuant to Section 19(b)(3)(A) of the Act 26 and subparagraph (f)(2) of Rule 19b–4 thereunder.27 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 rulecomments@sec.gov. Please include File 26 15 27 17 E:\FR\FM\14JAN1.SGM U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 14JAN1 2170 Federal Register / Vol. 75, No. 9 / Thursday, January 14, 2010 / Notices Number SR–CBOE–2009–098 on the subject line. SECURITIES AND EXCHANGE COMMISSION Paper Comments [Release No. 34–61298; File No. SR–BX– 2009–087] • 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–2009–098. 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, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal 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–2009–098 and should be submitted on or before February 4, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.28 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–537 Filed 1–13–10; 8:45 am] pwalker on DSK8KYBLC1PROD with NOTICES BILLING CODE 8011–01–P Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rules 2240 and 2250 To Reflect Changes to Corresponding FINRA Rules January 6, 2010. 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 December 30, 2009, NASDAQ OMX BX, Inc. (the ‘‘Exchange’’ or ‘‘BX’’) 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 Exchange has designated the proposed rule change as constituting a noncontroversial rule change under Rule 19b–4(f)(6) under the Act,3 which renders the proposal effective upon filing with the Commission. 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 Pursuant to the provisions of Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),4 and Rule 19b–4 thereunder,5 NASDAQ OMX BX, Inc. (‘‘BX’’) is filing with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change to amend BX Rules 2240 and 2250 to reflect recent changes to corresponding rules of the Financial Industry Regulatory Authority (‘‘FINRA’’). The text of the proposed rule change is available at https:// nasdaqomxbx.cchwallstreet.com, at the Exchange’s principal office, 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 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 4 15 U.S.C. 78s(b)(1). 5 17 CFR 240.19b–4. 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 Many of BX’s rules are based on rules of FINRA (formerly the National Association of Securities Dealers (‘‘NASD’’)). During 2008, FINRA embarked on an extended process of moving rules formerly designated as ‘‘NASD Rules’’ into a consolidated FINRA rulebook. In most cases, FINRA has renumbered these rules, and in some cases has substantively amended them. Accordingly, BX also proposes to initiate a process of modifying its rulebook to ensure that BX rules corresponding to FINRA/NASD rules continue to mirror them as closely as practicable. In some cases, it will not be possible for the rule numbers of BX rules to mirror corresponding FINRA rules, because existing or planned BX rules make use of those numbers. However, wherever possible, BX plans to update its rules to reflect changes to corresponding FINRA rules. This filing addresses BX Rule 2240 entitled ‘‘Disclosure of Control Relationship with Issuer’’ and 2250 entitled ‘‘Disclosure of Participation or Interest in Primary or Secondary Distribution.’’ BX Rule 2240 62 [sic] makes reference to NASD 2240 [sic] entitled ‘‘Disclosure of Control Relationship with Issuer.’’ The Commission approved a proposed rule change to adopt NASD Rule 2240 as FINRA Rule 2262, NASD Rule 2250 as FINRA Rule 2269 and NASD Rule 3340 as FINRA Rule 5260.6 FINRA transferred NASD Rule 2240 without material change into the Consolidated FINRA Rulebook as FINRA Rule 2262. FINRA Rule 2262 provides that a member controlled by, controlling, or under common control with the issuer of any security must, before entering into any contract with or for a customer for the purchase or sale of such security, disclose to the customer the existence of such control; if such disclosure is not made in writing, it must be supplemented by written disclosure at or before the completion of the transaction. 2 17 28 17 CFR 200.30–3(a)(12). VerDate Nov<24>2008 17:36 Jan 13, 2010 Jkt 220001 PO 00000 Frm 00066 Fmt 4703 6 Securities Exchange Act Release No. 60659 (September 11, 2009), 74 FR 48117 (September 21, 2009) (SR–FINRA–2009–044). Sfmt 4703 E:\FR\FM\14JAN1.SGM 14JAN1

Agencies

[Federal Register Volume 75, Number 9 (Thursday, January 14, 2010)]
[Notices]
[Pages 2166-2170]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-537]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61295; File No. SR-CBOE-2009-098]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to Exchange Fees for Fiscal Year 2010

January 6, 2010.

    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 December 30, 2009, the Chicago Board Options Exchange, Incorporated 
(``Exchange'' or ``CBOE'') 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 CBOE. The 
Exchange has designated this proposal as one establishing or changing a 
due, fee, or other charge imposed by the Exchange under Section 
19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)

[[Page 2167]]

thereunder,\4\ which renders the proposal effective upon filing with 
the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE proposes to amend its Fees Schedule to make various changes 
for Fiscal Year 2010. The text of the proposed rule change is available 
on the Exchange's Web site (https://www.cboe.org/legal), on the 
Commission's Web site (https://www.sec.gov), at the Exchange's principal 
office, 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, CBOE included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of those statements may be examined at the places specified in 
Item IV below. CBOE has prepared summaries, set forth in sections A, B, 
and C below, of the most significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this proposed rule change is to amend the CBOE Fees 
Schedule to make various fee changes. The proposed changes are the 
product of the Exchange's annual budget review. The fee changes were 
approved by the Exchange's Board of Directors pursuant to CBOE Rule 
2.22 and will take effect on January 4, 2010. The Exchange proposes to 
amend certain fees, eliminate several fees to simplify the Fees 
Schedule, and clarify the Fees Schedule in several respects. The 
Exchange also seeks to establish fees for transactions in S&P 500 
Dividend Index (DVS) options.
    A. The Exchange proposes to amend the following fees:
    Index Options Transaction Fees: The Exchange proposes to amend 
customer, voluntary professional and broker-dealer transaction fees for 
certain index options to create consistent fees for similar products 
and to simplify the fee structure for index options. The Exchange 
proposes to increase the customer (``C'' origin code) transaction fee 
in S&P 100 options (OEX and XEO) from $.30 per contract to $.40 per 
contract, which is the same rate charged to customers for certain other 
CBOE proprietary index options (Dow Jones Industrial Average (DXL) and 
volatility index options). The Exchange proposes to reduce the customer 
transaction fee for Morgan Stanley Retail Index (MVR) options from $.40 
per contract to $.18 per contract.
    The Exchange proposes to increase the voluntary professional (``W'' 
origin code) transaction fee in OEX options from $.20 per contract to 
$.40 per contract and in XEO options from $.30 per contract to $.40 per 
contract.\5\ The Exchange proposes to increase the broker-dealer \6\ 
transaction fee in OEX and XEO options from $.30 per contract to $.40 
per contract. Currently, broker-dealer transaction fees for volatility 
index options are $.25 per contract for manual executions and $.45 per 
contract for electronic executions. The Exchange proposes to charge 
$.40 per contract for manual and electronic broker-dealer executions in 
volatility index options. Broker-dealer transaction fees are currently 
$.25 per contract for MVR options. The Exchange proposes to increase 
the broker-dealer transaction fee for electronic executions in MVR 
options to $.45 per contract.
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    \5\ The Commission notes that on December 24, 2009, CBOE filed a 
proposed rule change relating to fees for professional orders that 
also would become operative on January 4, 2010. See SR-CBOE-2009-
101.
    \6\ Broker-Dealer transaction fees apply to broker-dealer orders 
(orders with ``B'' origin code), non-member market-maker orders 
(orders with ``N'' origin code) and orders from specialists in the 
underlying security (orders with ``Y'' origin code). See CBOE Fees 
Schedule, Footnote 16. Broker-dealer transaction fees also apply to 
certain orders with ``F'' origin code, specifically, orders from OCC 
members that are not CBOE members. The Exchange proposes to clarify 
Footnote 16 in this regard.
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    ETF Options Transaction Fees: The Exchange proposes to amend 
broker-dealer transaction fees for certain ETF options to create 
consistent fees for similar products and to simplify the fee structure 
for ETF options. Currently, the broker-dealer transaction fee in QQQQ 
(PowerShares QQQ Trust) options and IWM (iShares Russell 2000 Index 
Fund) options is $.25 per contract. The Exchange proposes to increase 
the broker-dealer transaction fee for electronic executions in QQQQ and 
IWM options to $.45 per contract.
    Surcharge Fees: The Exchange currently charges a $.06 per contract 
surcharge fee on all non-public customer \7\ transactions in OEX, XEO, 
SPX and volatility index options. The Exchange proposes to increase the 
surcharge fee for OEX, XEO and SPX options to $.10 per contract and for 
volatility index options to $.08 per contract. The surcharge fee is 
assessed to help the Exchange recoup license fees the Exchange pays to 
index licensors for the right to list these products for trading and is 
similar to surcharge fees charged by other exchanges.
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    \7\ The Surcharge Fee applies to all non-public customer 
transactions (i.e. CBOE and non-member market-maker, member firm and 
broker-dealer), including voluntary professionals and linkage orders 
except for satisfaction orders. See CBOE Fees Schedule, Section 1 
(Index Options) and Footnote 14. The Commission notes that on 
December 24, 2009, CBOE filed a proposed rule change relating to 
fees for professional orders that also would become operative on 
January 4, 2010. See SR-CBOE-2009-101.
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    Floor Brokerage Fees: The Exchange currently charges floor brokers 
executing orders in OEX, SPX and DXL options $.04 per contract and $.02 
per contract for crossed orders. The Exchange proposes to charge floor 
brokers executing orders in volatility index options $.02 per contract 
and $.01 per contract for crossed orders.
    Cabinet Trade Transaction Fees: The Exchange has traditionally not 
assessed transaction fees for accommodation liquidations (``cabinet 
trades'').\8\ Cabinet trades refer to trades in listed options that are 
worthless or not actively traded. Due to the expansion of option 
classes participating in the Penny Pilot Program, the Exchange has 
found it increasingly difficult to distinguish cabinet trades from 
trades in Penny Pilot options classes for purposes of this fee waiver 
program. Therefore, the Exchange proposes to eliminate the fee waiver 
and begin assessing transaction fees for cabinet trades effective 
January 4, 2010.
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    \8\ See CBOE Fees Schedule, Footnote 7.
---------------------------------------------------------------------------

    Strategy Fee Cap: The Exchange currently caps market-maker, firm, 
and broker-dealer transaction fees associated with dividend, merger and 
short stock interest strategies, as described in Footnote 13 of the 
CBOE Fees Schedule.\9\ Transaction fees are capped at $1,000 for all 
such strategies executed on the same trading day in the same options 
class, and are further capped at $50,000 per month per initiating 
member or firm. The Exchange proposes to reduce the per month per 
initiating member or firm cap from $50,000 to $25,000. The proposed fee 
cap reduction would enable the Exchange to remain competitive for these 
types of

[[Page 2168]]

strategies and is similar to strategy fee caps at other options 
exchanges.
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    \9\ The Strategy Fee Cap is in effect as a pilot program that is 
due to expire on March 1, 2010.
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    Customer Large Trade Discount Program: Customer (``C'' origin code) 
transaction fees are capped for large trades in index, ETF and HOLDRs 
options.\10\ Currently, the Exchange charges only the first 7,500 
contracts of a customer order in volatility index options. The Exchange 
proposes to charge only the first 5,000 contracts of a customer order 
in volatility index options in order to attract additional order flow 
to the Exchange.
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    \10\ See CBOE Fees Schedule, Section 18.
---------------------------------------------------------------------------

    Membership Application Fees: Membership application fees are set 
forth in Section 11 of the CBOE Fees Schedule as well as in a 
regulatory circular (``Membership Fees Circular''). The Exchange 
proposes to amend certain membership application fees as reflected in 
the Fees Schedule and Membership Fees Circular included as part of 
Exhibit 5. Specifically, the Exchange proposes to increase the Non-
Member Customer Business Fee from $1,000 to $2,500, the Lessor Firm Fee 
from $1,000 to $2,000, and the Renewal/Change of Status Fee from $250 
to $500. The proposed changes would help the Exchange recover its costs 
in processing these applications.
    B. The Exchange proposes to eliminate the following fees (with one 
exception as noted below):
    Customer Complex Order Fee: The Exchange proposes to eliminate the 
transaction fee of $.18 per contract for customer complex orders in 
equity and QQQQ options that ``take liquidity'' from the Exchange's 
complex order book.\11\
---------------------------------------------------------------------------

    \11\ See CBOE Fees Schedule, Section 1 and Footnote 12.
---------------------------------------------------------------------------

    Member Firm Proprietary Sliding Scale--License Fee Add-On: The 
Exchange's Member Firm Proprietary Sliding Scale program reduces a 
member firm's standard $.20 per contract transaction fee if the member 
firm reaches the volume thresholds set forth in the sliding scale in a 
month.\12\ Due to the Exchange's obligation to pay license fees on 
certain products, the Exchange currently assesses a $.10 per contract 
license fee (a total of 10 cents per contract less any surcharge fees 
already assessed) on all licensed products except Nasdaq-100 (MNX, NDX) 
and Russell 2000 (RUT) options when a firm reaches the fifth tier of 
the sliding scale. The Exchange proposes to eliminate this license fee 
add-on to simplify the Fees Schedule. The Exchange will continue to 
charge the surcharge fees set forth in Section 1 (Index Options) of the 
Fees Schedule on trades in licensed products when a firm reaches the 
fifth tier of the sliding scale.
---------------------------------------------------------------------------

    \12\ See CBOE Fees Schedule, Section 1 and Footnote 11.
---------------------------------------------------------------------------

    Miscellaneous Fees: The following fees are proposed to be 
eliminated as they are outdated and/or the Exchange has determined no 
longer to charge them: Installation, Relocation and Removal fees for 
single line phones under Section 8(F)(2) of the Fees Schedule; 
Installation, Relocation and Removal fees for Thomson\13\ market data 
trading floor terminals, fees for Thomson's NYSE OpenBook data, and the 
Installation fee of $500 for satellite TV under Section 8(F)(10) of the 
Fees Schedule; Trade Processing Services fees (Electronic Output/Input 
Services and Market-Maker Paper Ticket Fees) under Section 9 of the 
Fees Schedule, except for the $.0025 per contract side fee for matched 
and unmatched data; Fees for electronic and paper filing of FOCUS 
reports under Section 12 of the Fees Schedule; Fee for a service 
provided to member firms by the Exchange to facilitate member firm 
payments to floor brokers for except for the [sic]\14\ floor brokerage 
services (Floor Broker Payment Program) under Section 13 of the Fees 
Schedule; Pass-through of periodic license or royalty fees, the fee for 
a hard copy subscription to the Exchange Bulletin, and the CFLEX Log-in 
fee under Section 15 (Miscellaneous) of the Fees Schedule; and Circuit 
Charges under Section 16 of the Fees Schedule.\15\
---------------------------------------------------------------------------

    \13\ The Exchange also proposes to replace the reference to 
``ILX'' in Section 8 of the Fees Schedule with ``Thomson'' to 
reflect the replacement of the ILX service with Thomson's service. 
ILX is a division of Thomson Financial.
    \14\ The Exchange inadvertently included the phrase ``except for 
the'' in its filing with the Commission and intended the text of 
this portion of the ``Miscellaneous Fees'' section to read: ``[f]ee 
for a service provided to member firms by the Exchange to facilitate 
member firm payments to floor brokers for floor brokerage services 
(Floor Broker Payment Program) under Section 13 of the Fees Schedule 
* * *.'' Telephone call between Geoffrey Pemble, Special Counsel, 
Commission, and Jaime Galvan, Senior Attorney, CBOE, January 5, 
2010.
    \15\ The Exchange also proposes the following clean-up changes 
to the Fees Schedule. The Exchange proposes to delete references to 
the CBOE S&P 500 BuyWrite Index (1/10th value) (``BXO'') and CBOE 
S&P 500 Three-Month Realized Volatility (``RUH'') from Section 1 
(Index Options) to the Fees Schedule since the Exchange no longer 
trades these two classes. See also SR-CBOE-2009-054 (deleting RUH 
and BXO references from Footnote 6 to Fees Schedule). The Exchange 
also proposes to delete the ``CBOEdirect Connectivity Fees'' line 
item from Section 17 because those fees are now located in Section 
16 of the Fees Schedule.
---------------------------------------------------------------------------

    C. The Exchange proposes the following Fees Schedule 
clarifications:
    Floor Brokerage Fees: The Exchange proposes to clarify Footnote 5 
of the Fees Schedule relating to floor brokerage fees in three 
respects. First, the Exchange proposes to delete the sentence regarding 
assessment of the fee to Designated Primary Market-Makers (``DPMs'') 
because DPMs no longer have an agency function. Second, the Exchange 
proposes to clarify that if a market-maker executes an order for an 
account in which the market-maker is not a registered participant as 
reflected in the Exchange's Membership Department records, the market-
maker will be assessed a floor brokerage fee. Third, the Exchange 
proposes to clarify that order ID data is not required to be the same 
on both the buy and sell side of an order in order to be eligible for 
the discounted ``crossed'' rate.
    Disputed Charges: The Exchange proposes to add to the Fees Schedule 
as Footnote 7 a statement that after three months, all fees as assessed 
by the Exchange are considered final by the Exchange. The purpose of 
this change is to encourage members to promptly review their Exchange 
invoices so that any disputed charges can be addressed in a timely 
manner.
    Member Firm Proprietary Sliding Scale: The Exchange proposes to 
clarify Footnote 11 of the Fees Schedule relating to the Member Firm 
Proprietary Sliding Scale in three respects. First, the Exchange 
proposes to amend Footnote 11 to clarify that each member firm is 
responsible for notifying the Exchange's Membership Department of all 
of its affiliations with other members so that contracts of the firm 
and its affiliates may be aggregated for purposes of the sliding scale. 
Second, the Exchange proposes to clarify that it will aggregate the 
activity of separate member firms for purposes of the sliding scale if 
there is at least 75% common ownership between the firms as reflected 
on each firm's Form BD, Schedule A, which is the same way Exchange 
aggregates trading activity for the Liquidity Provider Sliding 
Scale.\16\ Third, the Exchange proposes to clarify that a member firm's 
contracts executed pursuant to an OCC Clearing Member Trade Assignment 
(CMTA) agreement (i.e., executed by another clearing firm and then 
transferred to the member firm's account at the OCC) are aggregated 
with the member firm's non-CMTA contracts for purposes of the sliding 
scale.
---------------------------------------------------------------------------

    \16\ See CBOE Fees Schedule, Footnote 10.
---------------------------------------------------------------------------

    Position Transfer Fee: The Exchange charges a fee of $.02 per 
contract side for options positions transferred pursuant to Rule 
6.49A.\17\ The fee helps

[[Page 2169]]

offset costs the Exchange incurs in providing services to accommodate 
both on-floor and off-floor transfers of positions.\18\ The fee is 
capped at $25,000 per transfer. The Exchange proposes to clarify the 
application of the $25,000 fee cap. Specifically, the Exchange proposes 
to clarify that for all on-floor transfers, both the position 
transferor (seller) and the transferee (buyer) are assessed a fee of 
$.02 per contract with a cap of $12,500 for each. If there are multiple 
transferees (buyers), each transferee is assessed a fee of $.02 per 
contract up to the $12,500 cap for the transferee side of the transfer 
package. For any off-floor transfer where regulatory review of a 
proposed transfer is solicited to determine whether the proposed 
transfer meets the off-floor transfer provisions of Rule 6.49A, the 
initiator of the review is assessed a fee of $.02 per contract with a 
cap of $25,000. If it is determined the position transfer must be 
affected on-floor, only the on-floor fee will be assessed.
---------------------------------------------------------------------------

    \17\ CBOE Rule 6.49A provides for a special procedure to permit 
option positions to be offered on the floor of the Exchange in the 
event that the positions are being transferred as part of a sale or 
disposition of all or substantially all of the assets or options 
positions of the transferring party where the transferring party 
would not continue to be involved in managing or owning the 
transferred positions. The rule also provides for off-floor 
transfers of positions based on certain specified exemptions, as 
well as with the approval of the Exchange's President under 
extraordinary circumstances.
    \18\ See Securities Exchange Act Release No. 59193 (January 2, 
2009), 74 FR 972 (January 9, 2009).
---------------------------------------------------------------------------

    Customer Large Trade Discount Program: The Exchange proposes to 
amend Section 18 of the Fees Schedule to clarify the calculation of the 
fee cap. The Exchange proposes to clarify that it will look at the 
trade date and order ID on each trade record to determine the 
qualification of an order for the fee cap. The order ID on each trade 
record must be the same in order for the Exchange to tie the trade 
records to the same order and accumulate the total contracts. The 
Exchange also proposes to clarify that for complex orders, the total 
contracts of an order (all legs) are counted for purposes of 
calculating the fee cap.
    D. The Exchange proposes to establish fees for DVS options.
    The Exchange recently received approval to list and trade options 
on the S&P 500 Dividend Index, which represents the accumulated ex-
dividend amounts of all S&P 500 Index component securities over a 
specified accrual period (e.g., quarterly, semi-annually, 
annually).\19\
---------------------------------------------------------------------------

    \19\ See Securities Exchange Act Release No. 61136 (December 10, 
2009) (approving SR-CBOE-2009-022).
---------------------------------------------------------------------------

    Consistent with the changes being proposed in this filing, the 
amount of the transactions fees for DVS options shall be as follows:
     $0.20 per contract for Market-Maker and Designated Primary 
Market-Maker transactions; \20\
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    \20\ This is the standard rate that is subject to the Liquidity 
Provider Sliding Scale as set forth in Footnote 10 to the Fees 
Schedule.
---------------------------------------------------------------------------

     $0.20 per contract for member firm proprietary 
transactions;
     $0.40 per contract for manually executed broker-dealer 
transactions;
     $0.40 per contract for electronically executed broker-
dealer transactions;
     $0.40 per contract for voluntary professional 
transactions;\21\
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    \21\ The Commission notes that on December 24, 2009, CBOE filed 
a proposed rule change relating to fees for professional orders that 
also would become operative on January 4, 2010. See SR-CBOE-2009-
101.
---------------------------------------------------------------------------

     $0.40 per contract for customer transactions; and
     $0.10 per contract CFLEX surcharge fee.
    The Exchange also proposes to adopt a $.10 per contract surcharge 
fee on all non-public customer transactions in DVS options to help the 
Exchange recoup license fees the Exchange pays to the reporting 
authority. The proposed surcharge fee is identical to the surcharge fee 
proposed to be increased from $0.06 per contract to $0.10 for non-
public customer transactions in OEX, XEO and SPX options.
    The Exchange's Liquidity Provider Sliding Scale shall apply to 
transaction fees in DVS options, but the Exchange's marketing fee\22\ 
shall not apply. The Exchange believes the rule change will further the 
Exchange's goal of introducing new products to the marketplace that are 
competitively priced.\23\
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    \22\ See Footnote 6 of the Fees Schedule.
    \23\ Linkage order fees are inapplicable for options on CBOE's 
proprietary products.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Securities Exchange Act of 1934 (``Act''),\24\ in 
general, and furthers the objectives of Section 6(b)(4)\25\ of the Act 
in particular, in that it is designed to provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and other persons using its facilities. The Exchange believes 
the proposed index and ETF options transaction fee changes and floor 
brokerage fee change would create consistent fees for similar products 
and help to simplify the fee structure for these options. The proposed 
changes to the Strategy Fee Cap and Customer Large Trade Discount 
Program would result in reduced fees for market participants. The 
proposed changes to surcharge fees and membership application fees 
would help the Exchange recover costs. The Exchange believes the 
proposed fee eliminations and Fees Schedule clarifications would update 
and simplify the Fees Schedule. With respect to establishing fees for 
DVS options, the Exchange believes the new fees proposed by this filing 
are equitable and reasonable in that they will further the Exchange's 
goal of introducing new products to the marketplace that are 
competitively priced and will help the Exchange recoup license fees 
that the Exchange pays to the reporting authority.
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78f(b).
    \25\ 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

    Because the foregoing rule change establishes or changes a due, 
fee, or other charge imposed by the Exchange, it has become effective 
pursuant to Section 19(b)(3)(A) of the Act \26\ and subparagraph (f)(2) 
of Rule 19b-4 thereunder.\27\ 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.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78s(b)(3)(A).
    \27\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File

[[Page 2170]]

Number SR-CBOE-2009-098 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-2009-098. 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, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal 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-2009-098 and should be 
submitted on or before February 4, 2010.

For the Commission, by the Division of Trading and Markets, pursuant 
to delegated authority.\28\
---------------------------------------------------------------------------

    \28\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-537 Filed 1-13-10; 8:45 am]
BILLING CODE 8011-01-P
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