Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the CBOE Fees Schedule, 13690-13691 [2011-5761]

Download as PDF 13690 Federal Register / Vol. 76, No. 49 / Monday, March 14, 2011 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64057; File No. SR–CBOE– 2011–019] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the CBOE Fees Schedule March 8, 2011. 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 February 25, 2011 [sic], Chicago Board Options Exchange, Incorporated (the ‘‘Exchange’’ or ‘‘CBOE’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to modify the Fees Schedule to amend its linkage fees. The text of the proposed rule change is available on the Exchange’s Web site (http://www.cboe.org/legal), at the Exchange’s Office of the Secretary, and at the Commission. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the 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 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. mstockstill on DSKH9S0YB1PROD with NOTICES A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Currently, when the Exchange receives a customer order that has an original size of 500 or more contracts that is routed for execution, in whole or 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Mar<15>2010 16:20 Mar 11, 2011 Jkt 223001 in part, to one or more exchanges in connection with the Options Order Protection and Locked/Crossed Market Plan (a ‘‘Customer Linkage Transaction’’), the Exchange charges $0.35 per contract in addition to the customary CBOE execution charges.3 The Exchange proposes to reduce the qualifying customer order size from 500 or more contracts to 100 or more contracts. This change will allow the Exchange to pass through some of the transaction costs incurred by the Exchange associated with the execution and handling of larger orders. The Exchange further proposes to eliminate the flat $0.35 per contract fee for Customer Linkage Transactions, and instead pass through the actual transaction fee(s) assessed on the transaction(s) by the exchange(s) to which the order was routed, minus a $0.05 per contract discount. These changes allow the Exchange to more accurately pass through some of the transaction costs incurred by the Exchange associated with Customer Linkage Transactions while still offering an added incentive to route orders to CBOE. The Exchange does not propose to collect these fees for orders initially routed for manual handling by CBOE Floor Brokers. More specifically, the Exchange will exempt from these passthrough fees customer orders that originate from the trading floor via an Exchange sponsored terminal like a Floor Broker Workstation.4 The primary objective of the fee change is to recoup some of the costs associated with large electronic orders that are initially transmitted to CBOE by parties who, in many instances, could be seeking to avoid being assessed another market’s transaction fees. Orders that are initially routed to CBOE Floor Brokers are not attempting to avoid fees since they incur brokerage commission charges in connection with manual handling. Rather, orders that are handled by CBOE Floor Brokers are large, complex orders that are primarily executed on the CBOE, which only are transmitted to away markets if, during their execution on CBOE, it is necessary to sweep some away markets. The proposed fee change will take effect on March 1, 2011. 3 See CBOE Fees Schedule, Section 20. See, also, Securities Exchange Act Release No. 63701 (January 11, 2011), 76 FR 2934 (January 18, 2011) (SR– CBOE–2010–116) and Securities Exchange Act Release No. 62793 (August 30, 2010), 75 FR 54408 (September 7, 2010) (SR–CBOE–2010–076). 4 The Floor Broker Workstation is a system for electronically entering and managing orders on the Exchange floor. Floor Broker Workstations are operated by Floor Brokers. PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934 (‘‘Act’’),5 in general, and furthers the objectives of Section 6(b)(4) 6 of the Act in particular, in that the passing through of the actual transaction fees assessed on away exchanges for Customer Linkage Transactions is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among CBOE Trading Permit Holders and other persons using Exchange facilities. Exempting customer orders that originate from an Exchangesponsored terminal from the passthrough fees is equitable because Floor Brokers and their customers are already assessed a number of fees in connection with trading on the Exchange Floor. B. Self-Regulatory Organization’s Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The proposed rule change is designated by the Exchange as establishing or changing a due, fee, or other charge, thereby qualifying for effectiveness on filing pursuant to Section 19(b)(3)(A)(ii) 7 of the Act and subparagraph (f)(2) of Rule 19b–4 8 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule 5 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 7 15 U.S.C. 78s(b)(3)(A)(ii). 8 17 C.F.R. 240.19b–4(f)(2). 6 15 E:\FR\FM\14MRN1.SGM 14MRN1 Federal Register / Vol. 76, No. 49 / Monday, March 14, 2011 / Notices change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2011–019 on the subject line. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64052; File No. SR–C2– 2011–010] Self-Regulatory Organizations; C2 Options Exchange, Incorporated: Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish a Revenue Sharing Program With Correlix, Inc. March 8, 2011. Paper Comments mstockstill on DSKH9S0YB1PROD with NOTICES Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the • Send paper comments in triplicate ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 to Elizabeth M. Murphy, Secretary, notice is hereby given that, on March 1, Securities and Exchange Commission, 2011, C2 Options Exchange, 100 F Street, NE., Washington, DC Incorporated (‘‘C2’’ or the ‘‘Exchange’’) 20549–1090. filed with the Securities and Exchange All submissions should refer to File Commission (‘‘Commission’’) the Number SR–CBOE–2011–019. This file proposed rule change as described in number should be included on the Items I and II below, which Items have subject line if e-mail is used. To help the been prepared by C2. The Commission Commission process and review your is publishing this notice to solicit comments more efficiently, please use comments on the proposed rule change only one method. The Commission will from interested persons. post all comments on the Commission’s I. Self-Regulatory Organization’s Internet website (http://www.sec.gov/ Statement of the Terms of Substance of rules/sro/shtml). Copies of the the Proposed Rule Change submission, all subsequent C2 Options Exchange, Incorporated amendments, all written statements (‘‘C2’’ or ‘‘Exchange’’) proposes to with respect to the proposed rule establish a revenue sharing program change that are filed with the with Correlix, Inc. The text of the Commission, and all written proposed rule change is available on the communications relating to the Exchange’s Web site (http:// proposed rule change between the Commission and any person, other than www.cboe.org/legal), at the Exchange’s Office of the Secretary and at the those that may be withheld from the Commission. public in accordance with the provisions of 5 U.S.C. 552, will be II. Self-Regulatory Organization’s available for website viewing and Statement of the Purpose of, and printing in the Commission’s Public Statutory Basis for, the Proposed Rule Reference Room, 100 F Street, NE., Change Washington, DC 20549, on official In its filing with the Commission, C2 business days between the hours of 10 included statements concerning the a.m. and 3 p.m. Copies of such filing purpose of and basis for the proposed will also be available for inspection and rule change and discussed any copying at the principal office of the comments it received on the proposed Exchange. All comments received will rule change. The text of these statements be posted without change; the may be examined at the places specified Commission does not edit personal in Item IV below. C2 has prepared identifying information from summaries, set forth in sections A, B, submissions. You should submit only and C below, of the most significant information that you wish to make aspects of such statements. available publicly. All submissions A. Self-Regulatory Organization’s should refer to File No. SR–CBOE– Statement of the Purpose of, and 2011–019 and should be submitted on Statutory Basis for, the Proposed Rule or before April 4, 2011. Change For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–5761 Filed 3–11–11; 8:45 am] 1. Purpose The Exchange is filing a proposed rule change to establish a revenue sharing program with Correlix. The Exchange has entered into an agreement with BILLING CODE 8011–01–P U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. CFR 200.30–3(a)(12). VerDate Mar<15>2010 16:20 Mar 11, 2011 Jkt 223001 PO 00000 Frm 00095 Fmt 4703 Correlix to provide to users of the Exchange real-time analytical tools to measure the latency of orders to and from its systems. Under the agreement, the Exchange will receive 30% of the total monthly subscription fees received by Correlix from parties who have contracted directly with Correlix to use their RaceTeam latency measurement service for the Exchange’s systems. The Exchange will not bill or contract with any Correlix RaceTeam customer directly. Pricing for the Correlix RaceTeam product for the Exchange varies depending on the number of unique acronyms and logons selected by the customer for monitoring by Correlix. For the Exchange, the fee will be an initial $1,500 monthly base fee for the first unique acronym monitored. For each additional unique acronym sought to be monitored, an additional monthly charge of $1,500 will be assessed. The monthly price for each unique acronym includes the monitoring of up to 25 Exchange logons associated with that particular acronym. Customers that wish to exceed 25 logons per-acronym for monitoring can purchase additional 25 logon blocks for an additional fee of $750 per month per acronym. Under the program, Correlix will see an individualized unique Exchangegenerated identifier that will allow Correlix RaceTeam to determine round trip order time,3 from the time the order reaches the Exchange extranet, through the Exchange matching engine, and back out of the Exchange extranet. The RaceTeam product offering does not measure latency outside of the Exchange extranet. The unique identifier serves as a technological information barrier so that the RaceTeam data collector will only be able to view data for Correlix RaceTeam subscriber firms related to latency. Correlix will not see subscriber’s individual order detail such as security, price or size. Individual RaceTeam subscribers’ logins will restrict access to only their own latency data. Correlix will see no specific information regarding the trading activity of non-subscribers. The Exchange believes that the above arrangement will provide users of its systems greater transparency into the processing of their trading activity and allow them to make more efficient trading decisions. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with 3 The product measures latency of orders whether the orders are rejected, executed or partially executed. 1 15 9 17 13691 Sfmt 4703 E:\FR\FM\14MRN1.SGM 14MRN1

Agencies

[Federal Register Volume 76, Number 49 (Monday, March 14, 2011)]
[Notices]
[Pages 13690-13691]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-5761]



[[Page 13690]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64057; File No. SR-CBOE-2011-019]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Modify the CBOE Fees Schedule

March 8, 2011.
    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 February 25, 2011 [sic], Chicago Board Options Exchange, 
Incorporated (the ``Exchange'' or ``CBOE'') filed with the Securities 
and Exchange Commission (the ``Commission'') the proposed rule change 
as described in Items I and II below, which Items have been prepared by 
the Exchange. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to modify the Fees Schedule to amend its 
linkage fees. The text of the proposed rule change is available on the 
Exchange's Web site (http://www.cboe.org/legal), at the Exchange's 
Office of the Secretary, and at the Commission.

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

    In its filing with the Commission, the 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 
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.

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

1. Purpose
    Currently, when the Exchange receives a customer order that has an 
original size of 500 or more contracts that is routed for execution, in 
whole or in part, to one or more exchanges in connection with the 
Options Order Protection and Locked/Crossed Market Plan (a ``Customer 
Linkage Transaction''), the Exchange charges $0.35 per contract in 
addition to the customary CBOE execution charges.\3\ The Exchange 
proposes to reduce the qualifying customer order size from 500 or more 
contracts to 100 or more contracts. This change will allow the Exchange 
to pass through some of the transaction costs incurred by the Exchange 
associated with the execution and handling of larger orders.
---------------------------------------------------------------------------

    \3\ See CBOE Fees Schedule, Section 20. See, also, Securities 
Exchange Act Release No. 63701 (January 11, 2011), 76 FR 2934 
(January 18, 2011) (SR-CBOE-2010-116) and Securities Exchange Act 
Release No. 62793 (August 30, 2010), 75 FR 54408 (September 7, 2010) 
(SR-CBOE-2010-076).
---------------------------------------------------------------------------

    The Exchange further proposes to eliminate the flat $0.35 per 
contract fee for Customer Linkage Transactions, and instead pass 
through the actual transaction fee(s) assessed on the transaction(s) by 
the exchange(s) to which the order was routed, minus a $0.05 per 
contract discount. These changes allow the Exchange to more accurately 
pass through some of the transaction costs incurred by the Exchange 
associated with Customer Linkage Transactions while still offering an 
added incentive to route orders to CBOE.
    The Exchange does not propose to collect these fees for orders 
initially routed for manual handling by CBOE Floor Brokers. More 
specifically, the Exchange will exempt from these pass-through fees 
customer orders that originate from the trading floor via an Exchange 
sponsored terminal like a Floor Broker Workstation.\4\ The primary 
objective of the fee change is to recoup some of the costs associated 
with large electronic orders that are initially transmitted to CBOE by 
parties who, in many instances, could be seeking to avoid being 
assessed another market's transaction fees. Orders that are initially 
routed to CBOE Floor Brokers are not attempting to avoid fees since 
they incur brokerage commission charges in connection with manual 
handling. Rather, orders that are handled by CBOE Floor Brokers are 
large, complex orders that are primarily executed on the CBOE, which 
only are transmitted to away markets if, during their execution on 
CBOE, it is necessary to sweep some away markets.
---------------------------------------------------------------------------

    \4\ The Floor Broker Workstation is a system for electronically 
entering and managing orders on the Exchange floor. Floor Broker 
Workstations are operated by Floor Brokers.
---------------------------------------------------------------------------

    The proposed fee change will take effect on March 1, 2011.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (``Act''),\5\ in general, and furthers 
the objectives of Section 6(b)(4) \6\ of the Act in particular, in that 
the passing through of the actual transaction fees assessed on away 
exchanges for Customer Linkage Transactions is designed to provide for 
the equitable allocation of reasonable dues, fees, and other charges 
among CBOE Trading Permit Holders and other persons using Exchange 
facilities. Exempting customer orders that originate from an Exchange-
sponsored terminal from the pass-through fees is equitable because 
Floor Brokers and their customers are already assessed a number of fees 
in connection with trading on the Exchange Floor.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 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 not necessary or appropriate in furtherance of 
the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The proposed rule change is designated by the Exchange as 
establishing or changing a due, fee, or other charge, thereby 
qualifying for effectiveness on filing pursuant to Section 
19(b)(3)(A)(ii) \7\ of the Act and subparagraph (f)(2) of Rule 19b-4 
\8\ thereunder.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 17 C.F.R. 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule

[[Page 13691]]

change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2011-019 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-2011-019. 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 website (http://www.sec.gov/rules/sro/shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website 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 will also be available for inspection and 
copying at the principal office of the Exchange. All comments received 
will be posted without change; the Commission does not edit personal 
identifying information from submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File No. SR-CBOE-2011-019 and should be submitted on or 
before April 4, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-5761 Filed 3-11-11; 8:45 am]
BILLING CODE 8011-01-P