Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to PULSe Fees, 34799-34802 [2010-14739]
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Federal Register / Vol. 75, No. 117 / Friday, June 18, 2010 / Notices
and approval process because DECN
will operate only temporarily as a
facility of ISE.50 In addition, the
Commission notes that ISE represents
that the rules of the Exchange
Subsidiaries, which were published for
comment as part of the Form 1
Applications, ‘‘substantially align’’ with
DECN’s operations in practice.51
Accordingly, the Commission believes
that the publication of the Form 1
Applications, coupled with the posting
of the rules of the Exchange Subsidiaries
on Direct Edge’s Web site, should help
to mitigate any concerns regarding
transparency with respect to the rules
under which DECN will continue to
operate, temporarily, as a facility of ISE.
To provide the Commission with the
opportunity to review and act upon any
proposal to change DECN’s fees or to
make material changes to DECN’s
operations as an ECN during the period
covered by the extended temporary
exemption, as well as to ensure that the
Commission’s ability to monitor ISE and
DECN is not diminished by the
extended temporary exemption, the
Commission is imposing the following
conditions while the extended
temporary exemption is in effect. The
Commission believes such conditions
are necessary and appropriate in the
public interest for the protection of
investors. Therefore, the Commission is
granting to ISE an extended temporary
exemption, until the earlier of (1) the
completion of the migration of all
symbols from DECN to the Exchange
Subsidiaries; or (2) August 31, 2010,
pursuant to Section 36 of the Exchange
Act, from the rule filing requirements
imposed by Section 19(b) of the
Exchange Act as set forth above,
provided that ISE and DECN comply
with the following conditions:
(1) DECN remains a registered brokerdealer under Section 15 of the Exchange
Act 52 and continues to operate as an
ECN;
(2) DECN operates in compliance with
the obligations set forth under
Regulation ATS;
(3) DECN and ISE continue to operate
as separate legal entities;
(4) ISE files a proposed rule change
under Section 19 of the Exchange Act 53
if any material changes are sought to be
made to DECN’s operations. A material
change would include any changes to a
stated policy, practice, or interpretation
regarding the operation of DECN or any
other event or action relating to DECN
that would require the filing of a
50 See
Extension Request at 3.
51 See Extension Request at 3.
52 15 U.S.C. 78o.
53 15 U.S.C. 78s.
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proposed rule change by an SRO or an
SRO facility; 54
(5) ISE files a proposed rule change
under Section 19 of the Exchange Act if
DECN’s fee schedule is sought to be
modified; and
(6) ISE treats DECN the same as other
ECNs that participate in the Facility,
and, in particular, ISE does not accord
DECN preferential treatment in how
DECN submits orders to the Facility or
in the way its orders are displayed or
executed.55
In addition, the Commission notes
that the Financial Industry Regulatory
Authority is currently the Designated
Examining Authority for DECN.
For the reasons discussed above, the
Commission finds that the extended
temporary conditional exemptive relief
requested by ISE is appropriate in the
public interest and is consistent with
the protection of investors.
IT IS ORDERED, pursuant to Section
36 of the Exchange Act,56 that the
application for an extended temporary
conditional exemption is granted
through the earlier of (1) the completion
of the migration of all symbols from
DECN to the Exchange Subsidiaries; or
(2) August 31, 2010, effective
immediately.
2010, the Chicago Board Options
Exchange, Incorporated (‘‘CBOE’’ or the
‘‘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 CBOE. The Exchange has
designated this proposal as one
establishing or changing a due, fee, or
other charge imposed by CBOE under
Section 19(b)(3)(A)(ii) of the Act 3 and
Rule 19b–4(f)(2) thereunder.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
By the Commission.
Elizabeth M. Murphy,
Secretary.
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 these 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
aspects of such statements.
[FR Doc. 2010–14684 Filed 6–17–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62286; File No. SR–CBOE–
2010–051]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to PULSe Fees
June 11, 2010.
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 May 26,
54 See Section 19(b) of the Exchange Act and Rule
19b–4 thereunder. The Commission notes that a
material change would include, among other things,
changes to DECN’s operating platform; the types of
securities traded on DECN; DECN’s types of
subscribers; or the reporting venue for trading that
takes place on DECN. The Commission also notes
that any rule filings must set forth the operation of
the DECN facility sufficiently so that the
Commission and the public are able to evaluate the
proposed changes.
55 See Extension Request at note 9.
56 15 U.S.C. 78mm.
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
CBOE is proposing to amend its Fees
Schedule to adopt fees for the use of a
new front-end order entry workstation,
referred to as PULSe, that will be a
facility of the Exchange. 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, on the
Commission’s Web site at https://
www.sec.gov and at the Commission’s
Public Reference Room.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, Proposed Rule
Change
1. Purpose
The purpose of this proposed rule
change is to establish fees relating to the
use of the PULSe order entry
workstation.
The PULSe workstation is a front-end
order entry system designed for use
with respect to orders that may be sent
to the trading systems of CBOE and
CBOE Stock Exchange (‘‘CBSX’’).5 In
3 15
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
5 The Exchange represents that the PULSe
workstation is merely a new front-end system
4 17
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Federal Register / Vol. 75, No. 117 / Friday, June 18, 2010 / Notices
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addition to providing the capability to
send orders to the markets of CBOE and
CBSX, the PULSe workstation will also
provide a user with the capability to
send options orders to other U.S.
options exchanges and stock orders to
other U.S. stock exchanges through a
‘‘PULSe Routing Intermediary’’ as
further described below (‘‘away-market
routing’’).6 Additionally, the PULSe
workstation functionality will include
access to consolidated real-time options
and stock market data.7
The PULSe workstation will be made
available by Signal Trading Systems,
LLC (‘‘STS’’). STS is an affiliate of CBOE
that is jointly owned by CBOE and
FlexTrade Systems, Inc. (‘‘FlexTrade’’), a
technology services provider. STS will
grant licenses to use the workstation
directly to CBOE and CBSX members
and trading permit holders (sometimes
collectively referred to herein as
‘‘members’’). Members may also make
the workstation available to their
customers, including sponsored users.
However, any order routed to CBOE or
CBSX through a PULSe workstation
must be routed through a member or
sponsored user (whose orders are
sponsored by a member).
The Exchange proposes a monthly
PULSe workstation fee to members of
$350 per workstation per month for the
first 10 PULSe workstations and $100
per workstation per month for each
additional PULSe workstation. The
Exchange also proposes an away-market
routing fee to the entering member of
$0.10 per executed options contract (or
equivalent share amount in the case of
stock) for away-market routing of orders
interface to existing CBOE and CBSX trading
systems (i.e., it is a new means of connecting to
these existing trading systems), and does not
require any changes to the Exchange’s surveillance
or communications rules. Further, there is no
change to, or impact on, the Exchange’s market
structure as a result of the PULSe workstations. The
Exchange notes that the C2 Options Exchange (‘‘C2’’)
has not yet begun trading. Use of the PULSe
workstation as a front-end system interface to C2
will be addressed in a separate rule filing prior to
the initiation of trading on C2.
6 The Exchange notes that, at least initially, orders
that are sent from the PULSe workstation to CBOE
and CBSX will be routed through connectivity
provided by a PULSe Routing Intermediary. The
Exchange envisions that the PULSe workstation
functionality will be modified so that orders sent
from the workstation to CBOE and CBSX may be
sent directly instead of through the connectivity
provided by a PULSe Routing Intermediary.
7 The workstation will also have the capability to
enable a user to send orders for commodity futures
and commodity options to designated contract
markets and other venues of the user’s choice at
which the user has trading privileges and to futures
commission merchants (each, an ‘‘FCM’’) and
introducing brokers (each, an ‘‘IB’’) of the user’s
choice. The workstation may also have the
capability to enable a user to send orders in other
non-security products to one or more destinations
of the user’s choice.
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through the PULSe workstation. The
Exchange is proposing that the
workstation and away-market routing
fees be waived through July 30, 2010,
thus these fees will be assessed
beginning August 2, 2010.
These new PULSe fees will allow for
the recoupment of the costs of
developing, maintaining, and
supporting the PULSe workstation and
for income from the value-added
services being provided through use of
the PULSe workstation as well as the
related away-market routing technology.
The Exchange believes the fee structure
represents an equitable allocation of
reasonable fees in that the same fees are
applicable to all users. The Exchange
also believes the workstation and
routing intermediary fees are
competitive with fees applicable to
similar workstations that offer awaymarket routing services provided by
other exchanges. In addition, the
Exchange believes that the $0.10 awaymarket routing fee is reasonable and
appropriate in light of the fact that it is
small in relation to the value to the user
of the PULSe workstation and its
extensive functionality, including its
ability to facilitate the routing of orders
to any securities exchange and in
relation to the total costs typically
incurred in routing and executing
orders. The Exchange also notes that use
of the PULSe workstation and the awaymarket routing functionality available
through the PULSe workstation are not
compulsory. The services are to be
offered as a convenience to members
and would not be the exclusive means
available to a member to send orders to
CBOE or CBSX or intermarket.
The PULSe workstation will cause
CBOE (CBSX) to be the default
destination exchange for individually
executed marketable option (stock)
orders if CBOE (CBSX) is at the national
best bid or offer (‘‘NBBO’’), regardless of
size or time, but will allow any user to
manually override CBOE (CBSX) as the
default destination on an order-by-order
basis.8 The workstation also
incorporates a function allowing option
(stock) orders at a specified price to be
sent to multiple exchanges with a single
8 Nothing about the PULSe order routing
functionality would relieve any member that is
using the PULSe workstation from complying with
its best execution obligations. Specifically, just as
with any customer order and any other routing
functionality, a member would have an obligation
to consider the availability of price improvement at
various markets and whether routing a customer
order through the PULSe functionality would allow
for access to opportunities for price improvement
if readily available. Moreover, a member would
need to conduct best execution evaluations on a
regular basis, at a minimum quarterly, that would
include its use of the PULSe workstation.
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click (‘‘sweep function’’), and the sweep
function will be configured to cause an
option (stock) order to be sent to CBOE
(CBSX) for up to the full size quoted by
CBOE (CBSX) if CBOE (CBSX) is at the
NBBO.9 Again, the away-market routing
functionality is to be offered as a
convenience to members and would not
be an exclusive means available to a
member to send orders intermarket.10
To use the PULSe workstation, a
member must either be a PULSe Routing
Intermediary or establish a relationship
with a PULSe Routing Intermediary. A
‘‘PULSe Routing Intermediary’’ is a
CBOE or CBSX member or trading
permit holder that has connectivity to,
and is a member of, other options and/
or stock exchanges. If a member sends
an order from the PULSe workstation,
the PULSe Routing Intermediary will
route that order to the designated
market on behalf of the entering
member. For member convenience,
CBOE will make available a list of
PULSe Routing Intermediaries that
provide third-party routing services.
The Exchange proposes that each PULSe
Routing Intermediary be charged a fee of
$20 per PULSe workstation per month
for each PULSe workstation that is
enabled to send orders through that
Routing Intermediary if another member
requests routing functionality through
that Routing Intermediary. The
Exchange is proposing that the PULSE
Routing Intermediary fee be waived
through November 30, 2010, thus this
fee will be assessed beginning December
1, 2010.
The Exchange believes that the PULSe
workstation will constitute a ‘‘facility’’ of
CBOE 11 to the extent that it is used with
respect to orders for options and other
9 For example, if a member were to enter an
option order to buy 250 contracts using the sweep
function at a time when CBOE is at the NBBO for
100 contracts, the sweep function will be
configured to send an order for 100 contracts to
CBOE, with the balance of the order routed as
specified by the member entering the order from the
configurations offered by the PULSe workstation.
Nothing will require a person using the PULSe
workstation to use the sweep function, and, in this
same example, if the member wished to route the
entire order for 250 contracts to an exchange other
than CBOE using the PULSe workstation, the
member will be free to manually override CBOE as
the default destination for the entire order.
10 With respect to options (stocks), the Exchange
also notes that the away-market functionality in the
PULSe workstation will not displace the provisions
of the Options Order Protection and Locked/
Crossed Market Plan (Regulation NMS), which will
continue to apply in the circumstances described in
the Plan (Regulation NMS).
11 The Exchange believes that the PULSe
workstation will, in the language of Section 3(a)(2)
of the Act, 15 U.S.C. 78c(a)(2), constitute a property
or service ‘‘for the purpose of effecting or reporting
a transaction on an exchange * * * .’’
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securities.12 A portion of the fees
collected by CBOE for the use of the
workstation will be remitted to STS.13
The Exchange notes that FlexTrade
engages and will engage in business
activities in addition to its provision of
services to STS and that these activities
include providing other technology
services to broker-dealers.14 The
Exchange also notes that STS may in the
future engage in business activities in
addition to making the PULSe
workstation facility available, and that
these activities may also include the
provision of other technology services to
broker-dealers. In this regard: (i) There
will be procedures and internal controls
in place that are reasonably designed so
that FlexTrade does not unfairly take
advantage of confidential information
relating to PULSe in its other business
activities and so that STS will not
unfairly take advantage of confidential
information relating to PULSe to the
extent that STS engages in any other
12 The capability of the workstation to initiate
orders for commodity futures and commodity
options and other non-security products to be sent
to a designated contract market, FCM, IB or other
destination that does not constitute an ‘‘exchange’’
(as that term is defined in Section 3(a)(1), 15 U.S.C.
78c(a)(1), and used in Section 3(a)(2), 15 U.S.C.
78c(a)(2), of the Act) will not constitute part of the
‘‘facility’’ of CBOE.
13 FlexTrade is not, and, at least initially, will not
be registered as a broker-dealer under Section 15(a)
of the Act, 15 U.S.C. 78o. STS also will not, at least
initially, be registered as a broker-dealer under
Section 15(a) of the Act. In this regard, we note the
following: (i) CBOE will be primarily responsible
for the marketing of the PULSe workstation. In no
event will FlexTrade have any role in marketing the
PULSe workstation. FlexTrade will not be a party
to any agreements with members for the PULSe
workstation. (ii) In contributing services to STS,
FlexTrade will be limited to providing software and
systems technology and maintaining proper
technical functioning. CBOE will be responsible for
ensuring that STS’s provision of the PULSe
workstation, as a facility of CBOE, meets CBOE’s
obligations as a self-regulatory organization. (iii)
Unless it becomes registered as a broker-dealer
under Section 15(a) of the Act, neither STS nor
FlexTrade will hold itself out as a broker-dealer,
provide advice related to securities transactions,
match orders, make decisions about routing orders,
facilitate the clearance and settlement of executed
trades, prepare or send transaction confirmations,
screen counterparties for creditworthiness, hold
funds or securities, open, maintain, administer or
close brokerage accounts, or provide assistance in
resolving problems, discrepancies or disputes
related to brokerage accounts. Should STS or
FlexTrade seek to register as a broker-dealer in the
future, the Exchange represents that the brokerdealer would not perform any operations without
first discussing with the Commission staff whether
any of the broker-dealer’s operations should be
subject to an Exchange rule filing required under
the Act, 15 U.S.C. 78s(b)(1).
14 The Exchange notes that FlexTrade is the sole
member of a single member limited liability
company named FlexTrade LLC, that FlexTrade
LLC is a registered broker-dealer, and that
FlexTrade and FlexTrade LLC each currently makes
a front-end order entry workstation named
‘‘FlexTrader’’ available. FlexTrade LLC is not a
member of CBOE or CBSX.
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business activities other than providing
the PULSe workstation. (ii) The books,
records, premises, officers, directors,
agents, and employees of STS, with
respect to the PULSe workstation, as a
facility of CBOE, will be deemed to be
those of CBOE for purposes of and
subject to oversight pursuant to the Act.
(iii) Use of the PULSe workstation will
be optional. Members will not be
required to use the PULSe workstation
to initiate their orders, and a member
use any available order entry system
that it selects, including one that it
develops itself, for use to initiate its
orders.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the
Act,15 in general, and furthers the
objectives of Section 6(b)(4) 16 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 and CBSX members and
trading permit holders in that the same
fees are applicable to all users of the
PULSe workstation.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CBOE does not believe that the
proposed rule change will impose any
burden on competition that is not
necessary or appropriatae in furtherance
of puropses 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 foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 17 and subparagraph (f)(2) of
Rule 19b–4 18 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.
15 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
17 15 U.S.C. 78s(b)(3)(A).
18 17 CFR 240.19b–4(f)(2).
16 15
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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
Number SR–CBOE–2010–051 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–2010–051. 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 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 CBOE.
All comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–CBOE–2010–051 and
should be submitted on or before July 9,
2010.
19 17
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CFR 200.30–3(a)(12).
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Federal Register / Vol. 75, No. 117 / Friday, June 18, 2010 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–14739 Filed 6–17–10; 8:45 am]
BILLING CODE 8010–01–P
DEPARTMENT OF STATE
[Public Notice: 7051]
Meeting To Learn of U.S. Information
and Communications Technologies
(ICT) Industry Efforts To Assist Haitian
Relief and Reconstruction Efforts
Following the January 2010
Earthquake
Department of State.
ACTION: Notice of a meeting.
srobinson on DSKHWCL6B1PROD with NOTICES
AGENCY:
SUMMARY: The United States
Coordinator for International
Communications and Information
Policy (CIP) will hold a public meeting
on July 9, 2010 from 1:30 p.m. to 3:30
p.m. (with additional time available
through 4:30 p.m. if needed) in the Loy
Henderson Auditorium of the Harry S.
Truman Building of the U.S.
Department of State. The Truman
Building is located at 2201 C Street,
NW., Washington, DC 20520.
The Office of the U.S. Coordinator
(CIP) advocates international policies
for expanded access to information and
communication technologies (ICT),
improved efficiency in the worldwide
ICT and telecommunications market
through increased reliance on freemarket forces, and fair opportunities for
U.S. companies to participate in this
important sector around the globe.
The meeting will be led by
Ambassador Philip L. Verveer, the U.S.
Coordinator for International
Communications and Information
Policy and facilitated by Deputy U.S.
Coordinator Steven Lett. The meeting’s
agenda will focus on learning about the
experiences of U.S. information and
communications technologies (ICT)
industry infrastructure manufacturers
and service providers that responded to
the earthquake in Haiti to understand:
(1) What assistance U.S. ICT-related
companies provided to help stabilize,
maintain, or rebuild ICT and other vital
capabilities in Haiti; (2) The experiences
of U.S. ICT-related companies that
volunteered assistance, and (3) The
international disaster-response
capabilities U.S. ICT-related companies
have in place, or plan to implement.
Participation by members of the
public, non-profit/non-governmental
organizations and corporations is
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encouraged. In addition, presentations
on the experiences of ICT-related
enterprises/organizations in, or directly
related to, Haiti relief and
reconstruction are invited, but will be
limited to five minutes. Planned
presentations for the meeting must be
received by the CIP meeting contact
(contact information below) by June 30,
along with an indication of any
requirements for multimedia
equipment. Written comments (apart
from presentations and specifically not
for distribution) may be submitted
through the day of the meeting.
Resource limitations may preclude
acknowledging or replying to
submissions. As time permits, an
opportunity at the end of the meeting
will be provided for an interactive
discussion amongst participants.
While the meeting is open to the
public, admittance to the Department of
State building is only by means of a preclearance. For placement on the preclearance list, please submit the
following information no later than 5
p.m. on Tuesday, July 6, 2010. (Please
note that this information is not retained
by CIP and must therefore be resubmitted for any subsequent CIPrelated meetings):
I. State that you are requesting preclearance to this meeting.
II. Provide the following information:
1. Name of meeting and its date and
time
2. Visitor’s full name
3. Date of birth
4. Citizenship
5. Acceptable forms of identification
for entry into the U.S. Department of
State include:
• U.S. driver’s license with photo
• Passport
• U.S. government agency ID
6. ID number on the form of ID that
the visitor will show upon entry
7. Whether the visitor has a need for
reasonable accommodation. Such
requests received after June 30th might
not be possible to fulfill.
Send the above information to Joseph
Burton by fax (202) 647–7407 or email
BurtonKJ@state.gov.
All visitors for this meeting must use
the 23rd Street entrance. The valid ID
bearing the number provided with your
pre-clearance request will be required
for admittance. Non-U.S. government
attendees must be escorted by
Department of State personnel at all
times when in the building.
FOR FURTHER INFORMATION CONTACT:
Joseph Burton, Foreign Affairs Officer,
Office of Communications and
Information Policy at (202) 647–5231 or
BurtonKJ@state.gov.
PO 00000
Frm 00120
Fmt 4703
Sfmt 4703
General information about CIP is
available: https://www.state.gov/e/eeb/
cip/.
Dated: June 15, 2010.
Joseph Burton,
Communications and Information Policy,
Department of State.
[FR Doc. 2010–14784 Filed 6–17–10; 8:45 am]
BILLING CODE 4710–07–P
DEPARTMENT OF TRANSPORTATION
Federal Railroad Administration, DOT
[Docket No. FRA–2010–0005–N–14]
Notice and Request for Comments
SUMMARY: In compliance with the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501 et seq.), this notice
announces that the Information
Collection Requirement (ICR) abstracted
below has been forwarded to the Office
of Management and Budget (OMB) for
review and comment. The ICR describes
the nature of the information collection
and its expected burden. The Federal
Register notice with a 60-day comment
period soliciting comments on the
following collection of information was
published on April 8, 2010 (75 FR
18012).
DATES: Comments must be submitted on
or before July 19, 2010.
FOR FURTHER INFORMATION CONTACT: Mr.
Robert Brogan, Office of Safety,
Planning and Evaluation Division, RRS–
21, Federal Railroad Administration,
1200 New Jersey Ave., SE., 3rd Floor,
Mail Stop 25, Washington, DC 20590
(telephone: (202) 493–6292), or Ms.
Kimberly Toone, Office of Information
Technology, RAD–20, Federal Railroad
Administration, 1200 New Jersey Ave.,
SE., 3rd Floor, Mail Stop 35,
Washington, DC 20590 (telephone: (202)
493–6132). (These telephone numbers
are not toll-free.)
SUPPLEMENTARY INFORMATION: The
Paperwork Reduction Act of 1995
(PRA), Public Law 104–13, Section 2,
109 Stat. 163 (1995) (codified as revised
at 44 U.S.C. 3501–3520), and its
implementing regulations, 5 CFR Part
1320, require Federal agencies to issue
two notices seeking public comment on
information collection activities before
OMB may approve paperwork packages.
44 U.S.C. 3506, 3507; 5 CFR 1320.5,
1320.8(d)(1), 1320.12. On April 8, 2010,
FRA published a 60-day notice in the
Federal Register soliciting comment on
this ICR that the agency was seeking
OMB approval. 75 FR 18012. FRA
received no comments in response to
this notice.
E:\FR\FM\18JNN1.SGM
18JNN1
]]>Agencies
[Federal Register Volume 75, Number 117 (Friday, June 18, 2010)]
[Notices]
[Pages 34799-34802]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-14739]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62286; File No. SR-CBOE-2010-051]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Relating to PULSe Fees
June 11, 2010.
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 May 26, 2010, the Chicago Board Options Exchange, Incorporated
(``CBOE'' or the ``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 CBOE. The
Exchange has designated this proposal as one establishing or changing a
due, fee, or other charge imposed by CBOE under Section 19(b)(3)(A)(ii)
of the Act \3\ and Rule 19b-4(f)(2) thereunder.\4\ 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 is proposing to amend its Fees Schedule to adopt fees for the
use of a new front-end order entry workstation, referred to as PULSe,
that will be a facility of the Exchange. 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, on the Commission's
Web site at https://www.sec.gov 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 these 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 aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, Proposed Rule Change
1. Purpose
The purpose of this proposed rule change is to establish fees
relating to the use of the PULSe order entry workstation.
The PULSe workstation is a front-end order entry system designed
for use with respect to orders that may be sent to the trading systems
of CBOE and CBOE Stock Exchange (``CBSX'').\5\ In
[[Page 34800]]
addition to providing the capability to send orders to the markets of
CBOE and CBSX, the PULSe workstation will also provide a user with the
capability to send options orders to other U.S. options exchanges and
stock orders to other U.S. stock exchanges through a ``PULSe Routing
Intermediary'' as further described below (``away-market routing'').\6\
Additionally, the PULSe workstation functionality will include access
to consolidated real-time options and stock market data.\7\
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\5\ The Exchange represents that the PULSe workstation is merely
a new front-end system interface to existing CBOE and CBSX trading
systems (i.e., it is a new means of connecting to these existing
trading systems), and does not require any changes to the Exchange's
surveillance or communications rules. Further, there is no change
to, or impact on, the Exchange's market structure as a result of the
PULSe workstations. The Exchange notes that the C2 Options Exchange
(``C2'') has not yet begun trading. Use of the PULSe workstation as
a front-end system interface to C2 will be addressed in a separate
rule filing prior to the initiation of trading on C2.
\6\ The Exchange notes that, at least initially, orders that are
sent from the PULSe workstation to CBOE and CBSX will be routed
through connectivity provided by a PULSe Routing Intermediary. The
Exchange envisions that the PULSe workstation functionality will be
modified so that orders sent from the workstation to CBOE and CBSX
may be sent directly instead of through the connectivity provided by
a PULSe Routing Intermediary.
\7\ The workstation will also have the capability to enable a
user to send orders for commodity futures and commodity options to
designated contract markets and other venues of the user's choice at
which the user has trading privileges and to futures commission
merchants (each, an ``FCM'') and introducing brokers (each, an
``IB'') of the user's choice. The workstation may also have the
capability to enable a user to send orders in other non-security
products to one or more destinations of the user's choice.
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The PULSe workstation will be made available by Signal Trading
Systems, LLC (``STS''). STS is an affiliate of CBOE that is jointly
owned by CBOE and FlexTrade Systems, Inc. (``FlexTrade''), a technology
services provider. STS will grant licenses to use the workstation
directly to CBOE and CBSX members and trading permit holders (sometimes
collectively referred to herein as ``members''). Members may also make
the workstation available to their customers, including sponsored
users. However, any order routed to CBOE or CBSX through a PULSe
workstation must be routed through a member or sponsored user (whose
orders are sponsored by a member).
The Exchange proposes a monthly PULSe workstation fee to members of
$350 per workstation per month for the first 10 PULSe workstations and
$100 per workstation per month for each additional PULSe workstation.
The Exchange also proposes an away-market routing fee to the entering
member of $0.10 per executed options contract (or equivalent share
amount in the case of stock) for away-market routing of orders through
the PULSe workstation. The Exchange is proposing that the workstation
and away-market routing fees be waived through July 30, 2010, thus
these fees will be assessed beginning August 2, 2010.
These new PULSe fees will allow for the recoupment of the costs of
developing, maintaining, and supporting the PULSe workstation and for
income from the value-added services being provided through use of the
PULSe workstation as well as the related away-market routing
technology. The Exchange believes the fee structure represents an
equitable allocation of reasonable fees in that the same fees are
applicable to all users. The Exchange also believes the workstation and
routing intermediary fees are competitive with fees applicable to
similar workstations that offer away-market routing services provided
by other exchanges. In addition, the Exchange believes that the $0.10
away-market routing fee is reasonable and appropriate in light of the
fact that it is small in relation to the value to the user of the PULSe
workstation and its extensive functionality, including its ability to
facilitate the routing of orders to any securities exchange and in
relation to the total costs typically incurred in routing and executing
orders. The Exchange also notes that use of the PULSe workstation and
the away-market routing functionality available through the PULSe
workstation are not compulsory. The services are to be offered as a
convenience to members and would not be the exclusive means available
to a member to send orders to CBOE or CBSX or intermarket.
The PULSe workstation will cause CBOE (CBSX) to be the default
destination exchange for individually executed marketable option
(stock) orders if CBOE (CBSX) is at the national best bid or offer
(``NBBO''), regardless of size or time, but will allow any user to
manually override CBOE (CBSX) as the default destination on an order-
by-order basis.\8\ The workstation also incorporates a function
allowing option (stock) orders at a specified price to be sent to
multiple exchanges with a single click (``sweep function''), and the
sweep function will be configured to cause an option (stock) order to
be sent to CBOE (CBSX) for up to the full size quoted by CBOE (CBSX) if
CBOE (CBSX) is at the NBBO.\9\ Again, the away-market routing
functionality is to be offered as a convenience to members and would
not be an exclusive means available to a member to send orders
intermarket.\10\
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\8\ Nothing about the PULSe order routing functionality would
relieve any member that is using the PULSe workstation from
complying with its best execution obligations. Specifically, just as
with any customer order and any other routing functionality, a
member would have an obligation to consider the availability of
price improvement at various markets and whether routing a customer
order through the PULSe functionality would allow for access to
opportunities for price improvement if readily available. Moreover,
a member would need to conduct best execution evaluations on a
regular basis, at a minimum quarterly, that would include its use of
the PULSe workstation.
\9\ For example, if a member were to enter an option order to
buy 250 contracts using the sweep function at a time when CBOE is at
the NBBO for 100 contracts, the sweep function will be configured to
send an order for 100 contracts to CBOE, with the balance of the
order routed as specified by the member entering the order from the
configurations offered by the PULSe workstation. Nothing will
require a person using the PULSe workstation to use the sweep
function, and, in this same example, if the member wished to route
the entire order for 250 contracts to an exchange other than CBOE
using the PULSe workstation, the member will be free to manually
override CBOE as the default destination for the entire order.
\10\ With respect to options (stocks), the Exchange also notes
that the away-market functionality in the PULSe workstation will not
displace the provisions of the Options Order Protection and Locked/
Crossed Market Plan (Regulation NMS), which will continue to apply
in the circumstances described in the Plan (Regulation NMS).
---------------------------------------------------------------------------
To use the PULSe workstation, a member must either be a PULSe
Routing Intermediary or establish a relationship with a PULSe Routing
Intermediary. A ``PULSe Routing Intermediary'' is a CBOE or CBSX member
or trading permit holder that has connectivity to, and is a member of,
other options and/or stock exchanges. If a member sends an order from
the PULSe workstation, the PULSe Routing Intermediary will route that
order to the designated market on behalf of the entering member. For
member convenience, CBOE will make available a list of PULSe Routing
Intermediaries that provide third-party routing services. The Exchange
proposes that each PULSe Routing Intermediary be charged a fee of $20
per PULSe workstation per month for each PULSe workstation that is
enabled to send orders through that Routing Intermediary if another
member requests routing functionality through that Routing
Intermediary. The Exchange is proposing that the PULSE Routing
Intermediary fee be waived through November 30, 2010, thus this fee
will be assessed beginning December 1, 2010.
The Exchange believes that the PULSe workstation will constitute a
``facility'' of CBOE \11\ to the extent that it is used with respect to
orders for options and other
[[Page 34801]]
securities.\12\ A portion of the fees collected by CBOE for the use of
the workstation will be remitted to STS.\13\
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\11\ The Exchange believes that the PULSe workstation will, in
the language of Section 3(a)(2) of the Act, 15 U.S.C. 78c(a)(2),
constitute a property or service ``for the purpose of effecting or
reporting a transaction on an exchange * * * .''
\12\ The capability of the workstation to initiate orders for
commodity futures and commodity options and other non-security
products to be sent to a designated contract market, FCM, IB or
other destination that does not constitute an ``exchange'' (as that
term is defined in Section 3(a)(1), 15 U.S.C. 78c(a)(1), and used in
Section 3(a)(2), 15 U.S.C. 78c(a)(2), of the Act) will not
constitute part of the ``facility'' of CBOE.
\13\ FlexTrade is not, and, at least initially, will not be
registered as a broker-dealer under Section 15(a) of the Act, 15
U.S.C. 78o. STS also will not, at least initially, be registered as
a broker-dealer under Section 15(a) of the Act. In this regard, we
note the following: (i) CBOE will be primarily responsible for the
marketing of the PULSe workstation. In no event will FlexTrade have
any role in marketing the PULSe workstation. FlexTrade will not be a
party to any agreements with members for the PULSe workstation. (ii)
In contributing services to STS, FlexTrade will be limited to
providing software and systems technology and maintaining proper
technical functioning. CBOE will be responsible for ensuring that
STS's provision of the PULSe workstation, as a facility of CBOE,
meets CBOE's obligations as a self-regulatory organization. (iii)
Unless it becomes registered as a broker-dealer under Section 15(a)
of the Act, neither STS nor FlexTrade will hold itself out as a
broker-dealer, provide advice related to securities transactions,
match orders, make decisions about routing orders, facilitate the
clearance and settlement of executed trades, prepare or send
transaction confirmations, screen counterparties for
creditworthiness, hold funds or securities, open, maintain,
administer or close brokerage accounts, or provide assistance in
resolving problems, discrepancies or disputes related to brokerage
accounts. Should STS or FlexTrade seek to register as a broker-
dealer in the future, the Exchange represents that the broker-dealer
would not perform any operations without first discussing with the
Commission staff whether any of the broker-dealer's operations
should be subject to an Exchange rule filing required under the Act,
15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------
The Exchange notes that FlexTrade engages and will engage in
business activities in addition to its provision of services to STS and
that these activities include providing other technology services to
broker-dealers.\14\ The Exchange also notes that STS may in the future
engage in business activities in addition to making the PULSe
workstation facility available, and that these activities may also
include the provision of other technology services to broker-dealers.
In this regard: (i) There will be procedures and internal controls in
place that are reasonably designed so that FlexTrade does not unfairly
take advantage of confidential information relating to PULSe in its
other business activities and so that STS will not unfairly take
advantage of confidential information relating to PULSe to the extent
that STS engages in any other business activities other than providing
the PULSe workstation. (ii) The books, records, premises, officers,
directors, agents, and employees of STS, with respect to the PULSe
workstation, as a facility of CBOE, will be deemed to be those of CBOE
for purposes of and subject to oversight pursuant to the Act. (iii) Use
of the PULSe workstation will be optional. Members will not be required
to use the PULSe workstation to initiate their orders, and a member use
any available order entry system that it selects, including one that it
develops itself, for use to initiate its orders.
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\14\ The Exchange notes that FlexTrade is the sole member of a
single member limited liability company named FlexTrade LLC, that
FlexTrade LLC is a registered broker-dealer, and that FlexTrade and
FlexTrade LLC each currently makes a front-end order entry
workstation named ``FlexTrader'' available. FlexTrade LLC is not a
member of CBOE or CBSX.
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\15\ in general, and furthers the objectives of Section 6(b)(4)
\16\ 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 and CBSX members and trading permit holders in that the same
fees are applicable to all users of the PULSe workstation.
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\15\ 15 U.S.C. 78f(b).
\16\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
CBOE does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriatae in
furtherance of puropses 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 foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \17\ and subparagraph (f)(2) of Rule 19b-4 \18\
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.
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\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 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 Number SR-CBOE-2010-051 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-2010-051. 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 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 CBOE. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-CBOE-2010-051 and should be
submitted on or before July 9, 2010.
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\19\ 17 CFR 200.30-3(a)(12).
[[Page 34802]]
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For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-14739 Filed 6-17-10; 8:45 am]
BILLING CODE 8010-01-P
