Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving a Proposed Rule Change Relating to Co-Location Service Fees, 13625-13626 [2010-6184]

Download as PDF Federal Register / Vol. 75, No. 54 / Monday, March 22, 2010 / Notices clarity with respect and minimizing confusion with respect to the requirements regarding guarantees and sharing in accounts.13 The Commission notes that the FINRA financial responsibility rules are currently in operation. For these reasons, the Commission designates the proposed rule change as operative upon filing. 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: pwalker on DSK8KYBLC1PROD with NOTICES 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 Number SR–NYSEAmex–2010–23 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–NYSEAmex–2010–23. 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 Web site viewing and printing in the Commission’s Public Reference Section, 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 NYSE’s principal office and on its Internet Web site at https:// www.nyse.com. 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– NYSEAmex–2010–23 and should be submitted on or before April 12, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–6150 Filed 3–19–10; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving a Proposed Rule Change Relating to CoLocation Service Fees I. Introduction On January 28, 2010, Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 a proposed rule change relating to co-location services and related fees. The proposed rule change was published for comment in the Federal Register on February 10, 2010.3 The Commission received no comment letters on the proposal. This order approves the proposed rule change. II. Description For a monthly fee, the Exchange provides members with cabinet space in CBOE’s building for placement of network and server hardware. The fee is $10 per month per ‘‘U’’ of shelf space (which is equal to 1.75 inches).4 A 14 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 61489 (February 4, 2010), 75 FR 6764 (‘‘Notice’’). 4 See Securities Exchange Act Release No. 57191 (January 24, 2008), 73 FR 5611 (January 30, 2008). 1 15 13 For purposes only of waiving the 30-day operative delay of this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). VerDate Nov<24>2008 16:41 Mar 19, 2010 Jkt 220001 2 17 PO 00000 Frm 00143 Fmt 4703 Sfmt 4703 13625 member also receives power, cooling, security and assistance with installation and connection of the equipment to the Exchange’s servers, at no additional charge. This ‘‘co-location service’’ provides members with close physical proximity to the Exchange’s electronic trading system, which helps meet their need for high performance processing and low latency. The co-location service is available to any member that requests the service and pays the monthly fee.5 In the Notice, the Exchange represented that it believes that for the foreseeable future, it has sufficient space to accommodate all members who may request the colocation service. In addition, the Exchange represented that, other than the co-location service, the Exchange does not provide any co-locating member with any advantage over any other co-locating member or any non-colocating member with respect to access to the Exchange’s trading system. Further, the Exchange represented that its systems are designed to minimize, to the extent possible, any advantage for one member over another. The Exchange noted that the above representations apply equally to both inbound and outbound data. The proposal clarifies the Exchange’s Fee Schedule relating to co-location fees in two respects. First, the Exchange proposes to move the co-location fees from Section 17 of the Fees Schedule (Hybrid Fees) to Section 8 (Facility Fees) because it believes that these fees are more accurately described as facility fees. Second, the Exchange proposes to clarify that the co-location fees are charged in increments of 4 ‘‘U’’ (which is equal to 7 inches) because the cabinet space is available in 4 U increments. III. Discussion and Commission’s Findings After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national The fee for a Sponsored User is $20 per month per ‘‘U.’’ See Securities Exchange Act Release No. 58189 (July 18, 2008), 73 FR 43274 (July 24, 2008). 5 A member using the co-location service may also pay certain CBOEdirect Connectivity Charges that are set forth in Section 16 of the Fee Schedule. The Exchange represents that these fees are charged for member connectivity to CBOEdirect regardless of whether or not a member is using the co-location service. These fees include a $40 per month ‘‘CMi Application Server’’ fee for server hardware used to connect to the CBOE CMi API, a $40 per month ‘‘Network Access Port’’ fee for use of the CMi API, and a $40 per month ‘‘FIX Port’’ fee for use of the FIX API. See Securities Exchange Act Release No. 57191, supra note 1. Each of the foregoing fees is $80 per month for a Sponsored User. See Securities Exchange Act Release No. 58189, supra note 1. E:\FR\FM\22MRN1.SGM 22MRN1 13626 Federal Register / Vol. 75, No. 54 / Monday, March 22, 2010 / Notices securities exchange.6 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(4) of the Act,7 which requires that the rules of a national securities exchange provide for the equitable allocation of reasonable dues, fees and other charges among its members and issuers and other persons using its facilities, and with Section 6(b)(5) of the Act,8 which requires, among other things, that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest, and not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Commission believes that the proposed co-location fees are equitably allocated insofar as they are applied on the same terms to similarly-situated market participants. In addition, the Commission believes that the colocation services described in the proposed rule change are not unfairly discriminatory because: (1) Co-location services are offered to all members who request them and pay the appropriate fees; (2) as represented by CBOE, the Exchange has architected its systems so as to, as much as possible, reduce or eliminate differences among users of its systems, whether co-located or not; and (3) the Exchange has stated that for the foreseeable future, it has sufficient space to accommodate all members who may request the co-location service. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,9 that the proposed rule change (SR–CBOE–2010– 008) be, and hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–6184 Filed 3–19–10; 8:45 am] pwalker on DSK8KYBLC1PROD with NOTICES BILLING CODE 8011–01–P 6 In approving this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 7 15 U.S.C. 78f(b)(4). 8 15 U.S.C. 78f(b)(5). 9 15 U.S.C. 78s(b)(2). 10 17 CFR 200.30–3(a)(12). VerDate Nov<24>2008 16:41 Mar 19, 2010 Jkt 220001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61715; File No. SR–CBOE– 2010–028] 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 parts of such statements. Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Market-Maker Joint Accounts A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change March 16, 2010. Background CBOE Rule 6.55 pertains to multiple representation by an individual MarketMaker in open outcry. Currently, the rule provides in relevant part that, except in accordance with procedures established by the Exchange or with respect the Exchange’s permission in individual cases, no Market-Maker shall enter or be present in a trading crowd while a Floor Broker present in the trading crowd is holding an order on behalf of the Market-Maker’s individual account or an order initiated by the Market-Maker for an account in which the Market-Maker has an interest. In addition, Interpretation and Policy .02 to CBOE Rule 6.55 advises members to consult CBOE’s Regulatory Circulars for procedures governing the simultaneous presence in a trading crowd of participants in and orders for the same joint account. The relevant circulars, RG01–60 and RG01–128, set forth Exchange procedures and requirements for trading in joint accounts that vary depending upon whether the particular trading occurs in equity options or in index options and options on exchange-traded funds (‘‘ETFs’’).5 While certain restrictions apply to joint account activity in equity options,6 there are generally no 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 March 8, 2010, the Chicago Board Options Exchange, Incorporated (‘‘Exchange’’ or ‘‘CBOE’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder.4 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 is proposing to amend CBOE Rule 6.55, Multiple Representation Prohibited, and to eliminate related Regulatory Circulars pertaining to joint account activity. The Exchange is also proposing related amendments to CBOE Rule 8.9, Securities Accounts and Orders of Market-Makers. 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’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 self-regulatory organization 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 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6). 2 17 PO 00000 Frm 00144 Fmt 4703 Sfmt 4703 1. Purpose 5 The Regulatory Circular governing joint account trading in equity products, RG01–60, was last amended through Securities Exchange Act Release No. 44152 (April 5, 2001), 66 FR 19262 (April 13, 2001) (SR–CBOE–00–13). The Regulatory Circular governing joint account trading in certain index options and options on ETFs was last amended through Securities Exchange Act Release No. 44433 (June 15, 2001), 66 FR 33589 (June 22, 2001) (SR– CBOE–2001–30). 6 For equity option classes, RG01–60 currently provides in part that: (i) A joint account may be simultaneously represented in a trading crowd only by participants trading in-person; orders for a joint account may not be entered in a crowd where a participant of the joint account is trading in-person for the joint account; however, if no participant is trading in-person for the joint account, orders may be entered via Floor Broker so long as the same option series in not represented by more than one Floor Broker; (ii) members may alternate trading inperson between their individual and joint accounts while in the crowd; members who alternate trading between accounts must ensure that while trading the joint account another participant does not enter orders through a Floor Broker for the joint account in the same crowd or that an order is not being continuously represented for the joint account in E:\FR\FM\22MRN1.SGM 22MRN1

Agencies

[Federal Register Volume 75, Number 54 (Monday, March 22, 2010)]
[Notices]
[Pages 13625-13626]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-6184]


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SECURITIES AND EXCHANGE COMMISSION


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Order Approving a Proposed Rule Change Relating to Co-
Location Service Fees

I. Introduction

    On January 28, 2010, Chicago Board Options Exchange, Incorporated 
(``CBOE'' or the ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change relating to co-location services 
and related fees. The proposed rule change was published for comment in 
the Federal Register on February 10, 2010.\3\ The Commission received 
no comment letters on the proposal. This order approves the proposed 
rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 61489 (February 4, 
2010), 75 FR 6764 (``Notice'').
---------------------------------------------------------------------------

II. Description

    For a monthly fee, the Exchange provides members with cabinet space 
in CBOE's building for placement of network and server hardware. The 
fee is $10 per month per ``U'' of shelf space (which is equal to 1.75 
inches).\4\ A member also receives power, cooling, security and 
assistance with installation and connection of the equipment to the 
Exchange's servers, at no additional charge. This ``co-location 
service'' provides members with close physical proximity to the 
Exchange's electronic trading system, which helps meet their need for 
high performance processing and low latency.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 57191 (January 24, 
2008), 73 FR 5611 (January 30, 2008). The fee for a Sponsored User 
is $20 per month per ``U.'' See Securities Exchange Act Release No. 
58189 (July 18, 2008), 73 FR 43274 (July 24, 2008).
---------------------------------------------------------------------------

    The co-location service is available to any member that requests 
the service and pays the monthly fee.\5\ In the Notice, the Exchange 
represented that it believes that for the foreseeable future, it has 
sufficient space to accommodate all members who may request the co-
location service. In addition, the Exchange represented that, other 
than the co-location service, the Exchange does not provide any co-
locating member with any advantage over any other co-locating member or 
any non-co-locating member with respect to access to the Exchange's 
trading system. Further, the Exchange represented that its systems are 
designed to minimize, to the extent possible, any advantage for one 
member over another. The Exchange noted that the above representations 
apply equally to both inbound and outbound data.
---------------------------------------------------------------------------

    \5\ A member using the co-location service may also pay certain 
CBOEdirect Connectivity Charges that are set forth in Section 16 of 
the Fee Schedule. The Exchange represents that these fees are 
charged for member connectivity to CBOEdirect regardless of whether 
or not a member is using the co-location service. These fees include 
a $40 per month ``CMi Application Server'' fee for server hardware 
used to connect to the CBOE CMi API, a $40 per month ``Network 
Access Port'' fee for use of the CMi API, and a $40 per month ``FIX 
Port'' fee for use of the FIX API. See Securities Exchange Act 
Release No. 57191, supra note 1. Each of the foregoing fees is $80 
per month for a Sponsored User. See Securities Exchange Act Release 
No. 58189, supra note 1.
---------------------------------------------------------------------------

    The proposal clarifies the Exchange's Fee Schedule relating to co-
location fees in two respects. First, the Exchange proposes to move the 
co-location fees from Section 17 of the Fees Schedule (Hybrid Fees) to 
Section 8 (Facility Fees) because it believes that these fees are more 
accurately described as facility fees. Second, the Exchange proposes to 
clarify that the co-location fees are charged in increments of 4 ``U'' 
(which is equal to 7 inches) because the cabinet space is available in 
4 U increments.

III. Discussion and Commission's Findings

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national

[[Page 13626]]

securities exchange.\6\ In particular, the Commission finds that the 
proposed rule change is consistent with Section 6(b)(4) of the Act,\7\ 
which requires that the rules of a national securities exchange provide 
for the equitable allocation of reasonable dues, fees and other charges 
among its members and issuers and other persons using its facilities, 
and with Section 6(b)(5) of the Act,\8\ which requires, among other 
things, that the rules of a national securities exchange be designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system and, in general, to protect investors and the public 
interest, and not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \6\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f(b)(4).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission believes that the proposed co-location fees are 
equitably allocated insofar as they are applied on the same terms to 
similarly-situated market participants. In addition, the Commission 
believes that the co-location services described in the proposed rule 
change are not unfairly discriminatory because: (1) Co-location 
services are offered to all members who request them and pay the 
appropriate fees; (2) as represented by CBOE, the Exchange has 
architected its systems so as to, as much as possible, reduce or 
eliminate differences among users of its systems, whether co-located or 
not; and (3) the Exchange has stated that for the foreseeable future, 
it has sufficient space to accommodate all members who may request the 
co-location service.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-CBOE-2010-008) be, and hereby 
is, approved.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-6184 Filed 3-19-10; 8:45 am]
BILLING CODE 8011-01-P
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