Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Sales Value Fee, 35928-35930 [2011-15280]
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35928
Federal Register / Vol. 76, No. 118 / Monday, June 20, 2011 / Notices
which the fee is collected. As such, the
proposed changes will help avoid
Trading Permit Holder confusion and
foster better understanding of the
application of the fee. Accordingly, the
Exchange believes the proposed rule
change will promote just and equitable
principles of trade, remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and
protect investors and the public interest.
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 appropriate in furtherance
of 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 foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 13 and subparagraph (f)(2) of
Rule 19b–4 14 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.
sroberts on DSK5SPTVN1PROD with NOTICES
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–2011–054 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–2011–054. 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
No. SR–CBOE–2011–054 and should be
submitted on or before July 11, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–15281 Filed 6–17–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64673; File No. SR–C2–
2011–013]
Self-Regulatory Organizations; C2
Options Exchange, Incorporated;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating to the Sales Value
Fee
June 15, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule
19b–4 thereunder,2 notice is hereby
given that on June 3, 2011, C2 Options
Exchange, Incorporated (‘‘C2’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’ or ‘‘SEC’’) the proposed
rule change as described in Items I, II,
and III below, which Items have been
prepared by C2. 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
C2 Options Exchange, Incorporated
(‘‘C2’’ or ‘‘Exchange’’) proposes to make
clarifying changes to its Fees Schedule
concerning the application and
collection of the Sales Value Fee. The
text of the proposed rule change is
available on the Exchange’s Web site
(https://www.cboe.org/legal), at the
Exchange’s Office of the Secretary and
at the Commission.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, C2
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. C2 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 Exchange is proposing
amendments to its Fees Schedule to
make clear the circumstances that
trigger application of the Sales Value
Fee, and to make other clarifying
changes. Section 6 of the C2 Fees
Schedule permits the Exchange to
collect a fee from its Trading Permit
Holders for sales of securities on C2
with respect to which the Exchange is
obligated to pay a fee to the SEC
pursuant to Section 31 of the Act 3 and
Rule 31, thereunder.4 Each national
securities exchange and association is
required to calculate the aggregate dollar
amount of ‘‘covered sales’’ occurring on
the exchange or through a member of
2 17
13 15
U.S.C. 78s(b)(3)(A).
14 17 CFR 240.19b–4(f)(2).
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15 17
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
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CFR 240.19b–4.
U.S.C. 78ee.
4 17 CFR 240.31.
3 15
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sroberts on DSK5SPTVN1PROD with NOTICES
Federal Register / Vol. 76, No. 118 / Monday, June 20, 2011 / Notices
the national securities association and
to pay fees based on those covered sales
to the Commission (‘‘Section 31 fees’’).
A covered sale is a ‘‘sale of a security,
other than an exempt sale or a sale of
a security future, occurring on a
national securities exchange or by or
through any member of a national
securities association otherwise than on
a national securities exchange.’’ 5
Pursuant to Section 6 of the Fees
Schedule, the Exchange assesses a
Trading Permit Holder the Sales Value
Fee for an executed sell order entered
on C2 that results in a covered sale. The
Sales Value Fee defrays the cost of the
Section 31 fee triggered by the covered
sale. In this regard, the Sales Value Fee
assessed a Trading Permit Holder is
equal to the Section 31 fee assessed by
the Commission for the covered sale.
Further, the Exchange adjusts the Sales
Value Fee in lock step with changes to
the Section 31 fee made by the
Commission. Assessing a sales fee is
common practice among the national
securities exchanges and associations.6
As noted above, the Sales Value Fee
defrays the cost of the Section 31 fee.
The Sales Value Fee is triggered by the
fulfillment of a Trading Permit Holder’s
sell order in options securities entered
on C2 that results in a covered sale. If
the Trading Permit Holder’s sell order is
fulfilled on C2, the Exchange incurs a
Section 31 fee obligation. Sell orders in
securities entered on C2 that are routed
to another market for execution,
however, do not result in a covered sale
on C2. Execution of such routed orders
is facilitated by C2’s routing broker,7
which acts as the selling Trading Permit
Holder for a routed order on the away
market on behalf of the C2 Trading
Permit Holder that entered the sell
order. Such routed sell orders result in
a covered sale on the away market,
which incurs a Section 31 fee
obligation. Like the Exchange, the away
market assesses a sales fee on the
Trading Permit Holder that entered the
sell order, in this case the C2 routing
broker, to defray the cost of the Section
31 fee obligation. The Exchange may
reimburse its routing broker for all
Section 31-related fees (e.g., away
market sales fees) incurred by the
routing broker in connection with the
routing services it provides. In turn, the
Exchange assesses its Trading Permit
Holder, the original selling party, a
Sales Value Fee pursuant to Section 6 of
5 17
CFR 240.31(a)(6).
6 See, e.g., ISE Rule 212, NASDAQ Rule 7002,
NASDAQ OMX PHLX Rule 607 and NYSE Rule
440H.
7 C2 routes orders to other exchanges in
conjunction with one or more routing brokers
pursuant to C2 Rule 636.
VerDate Mar<15>2010
16:50 Jun 17, 2011
Jkt 223001
the Fees Schedule to defray the cost of
the Section 31 fee passed on by the
away exchange pursuant to its sales fee.
As such, the Exchange’s Sales Value Fee
offsets the sales fee its routing broker is
assessed by the away market (which the
routing broker then passes to C2), the
result of which is to place the parties
involved in the transaction in the same
position as if the covered sale had
occurred on C2.
In light of the varying means by
which a Sales Value Fee is incurred by
Trading Permit Holders, as described
above, the Exchange believes that a
more detailed description of the
circumstances that trigger the Sales
Value Fee is warranted. Accordingly,
the new Fees Schedule language
proposed by the Exchange expressly
discusses covered sales in option
securities. In addition, the proposed
new Fees Schedule language includes a
description of sell orders entered on C2
that result in a covered sale on another
exchange, expressly discussing the fee
incurred by the Exchange and the
application of the Sales Value Fee in
that circumstance.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with Section
6(b) of the Securities Exchange Act of
1934 (‘‘Act’’),8 in general, and furthers
the objectives of Section 6(b)(4) 9 of the
Act in particular, in that it is designed
to provide for the equitable allocation of
reasonable dues, fees, and other charges
among C2 Trading Permit Holders and
other persons using its facilities and it
does not unfairly discriminate between
customers, issuers, brokers or dealers.
The proposed clarifying language does
not change the application and
assessment of the Sales Value Fee under
the Fees Schedule, but rather provides
greater detail on the transactions that
trigger the fee and the process by which
the fee is collected. The Exchange
applies Section 6 of its Fees Schedule
uniformly to all Trading Permit Holders’
sell orders entered on C2 resulting in
covered sales. The Exchange also
believes the proposed rule change is
consistent with the provisions of
Section 6 of the Act,10 in general and
with Section 6(b)(5) of the Act,11 in
particular, which requires that the rules
of an exchange be designed to prevent
fraudulent and manipulative acts and
practices, promote just and equitable
principles of trade, foster cooperation
and coordination with persons engaged
8 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
10 15 U.S.C. 78f.
11 15 U.S.C. 78f(b)(5).
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general, protect
investors and the public interest. The
Exchange believes that the proposed
rule change is consistent with these
requirements because the proposed
amended Fees Schedule text provides
Trading Permit Holders with more
detail regarding the circumstances
under which the Exchange assesses a
Sales Value Fee, and the process by
which the fee is collected. As such, the
proposed changes will help avoid
Trading Permit Holder confusion and
foster better understanding of the
application of the fee. Accordingly, the
Exchange believes the proposed rule
change will promote just and equitable
principles of trade, remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and
protect investors and the public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
C2 does not believe that the proposed
rule change will impose any burden on
competition that is not necessary or
appropriate in furtherance of 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 foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 12 and subparagraph (f)(2) of
Rule 19b–4 13 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,
9 15
PO 00000
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Fmt 4703
12 15
13 17
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35929
E:\FR\FM\20JNN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
20JNN1
35930
Federal Register / Vol. 76, No. 118 / Monday, June 20, 2011 / Notices
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–C2–2011–013 on the
subject line.
sroberts on DSK5SPTVN1PROD with NOTICES
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–C2–2011–013. 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 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–C2–2011–
013 and should be submitted on or
before July 11, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–15280 Filed 6–17–11; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64667; File No. SR–
NASDAQ–2011–080]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Adopt a
Market Order Spread Protection
Feature
June 14, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 8,
2011, The NASDAQ Stock Market LLC
(the ‘‘Exchange’’ or ‘‘NASDAQ’’) filed
with the Securities and Exchange
Commission ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASDAQ is filing with the
Commission a proposal for the
NASDAQ Options Market (‘‘NOM’’) to
amend Chapter VI, Trading Systems,
Section 1, Definitions, to adopt a Market
Order Spread Protection feature, as
described further below.
This change is scheduled to be
implemented on NOM on or about
August 1, 2011; the Exchange will
announce the implementation schedule
by Options Trader Alert, once the
rollout schedule is finalized.
The text of the proposed rule change
is available at https://
nasdaq.cchwallstreet.com/, at
NASDAQ’s principal office, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
BILLING CODE 8011–01–P
1 15
14 17
CFR 200.30–3(a)(12).
VerDate Mar<15>2010
16:50 Jun 17, 2011
2 17
Jkt 223001
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00099
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Sfmt 4703
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to add an enhancement to
NOM’s System to protect Market Orders
from being executed in very wide
markets. Specifically, the Market Order
Spread Protection feature will validate
the NBBO when such order is received.
If the NBBO is wider than a preset
threshold at the time the order is
received, the Market Order will be
rejected. For example, if the Market
Order Spread Protection is set to $20.00,
and a Market Order to buy is received
while the NBBO is $1.00–$50.00, such
Market Order will be rejected.
The Exchange will establish the
threshold at a number and notify
Participants in an Options Trader Alert,
with sufficient advanced notice,
including if the threshold changes. The
Exchange believes that this flexibility is
important and similar to other
configurable features.3 The Market
Order Spread Protection, which is not
optional, will be the same for all options
traded on NOM and is applicable to all
Participants submitting Market Orders.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 4 in general, and furthers the
objectives of Section 6(b)(5) of the Act 5
in particular, in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, and to remove
impediments to and perfect the
mechanisms of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest, by mitigating risks to
market participants. The Exchange
believes that the proposal is appropriate
and reasonable, because it offers a
protection for Market Orders that may
encourage price continuity, which
should, in turn, protect investors and
the public interest by reducing
executions occurring at dislocated
prices.
3 See e.g., PHLX Rule 1017(l)(iii)(A) regarding the
Opening Quote Range, which is also a configurable
feature.
4 15 U.S.C. 78f(b).
5 15 U.S.C. 78f(b)(5).
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]]>Agencies
[Federal Register Volume 76, Number 118 (Monday, June 20, 2011)]
[Notices]
[Pages 35928-35930]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-15280]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64673; File No. SR-C2-2011-013]
Self-Regulatory Organizations; C2 Options Exchange, Incorporated;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to the Sales Value Fee
June 15, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\
notice is hereby given that on June 3, 2011, C2 Options Exchange,
Incorporated (``C2'' or ``Exchange'') filed with the Securities and
Exchange Commission (``Commission'' or ``SEC'') the proposed rule
change as described in Items I, II, and III below, which Items have
been prepared by C2. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
C2 Options Exchange, Incorporated (``C2'' or ``Exchange'') proposes
to make clarifying changes to its Fees Schedule concerning the
application and collection of the Sales Value Fee. The text of the
proposed rule change is available on the Exchange's Web site (https://www.cboe.org/legal), at the Exchange's Office of the Secretary and at
the Commission.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, C2 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. C2 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 Exchange is proposing amendments to its Fees Schedule to make
clear the circumstances that trigger application of the Sales Value
Fee, and to make other clarifying changes. Section 6 of the C2 Fees
Schedule permits the Exchange to collect a fee from its Trading Permit
Holders for sales of securities on C2 with respect to which the
Exchange is obligated to pay a fee to the SEC pursuant to Section 31 of
the Act \3\ and Rule 31, thereunder.\4\ Each national securities
exchange and association is required to calculate the aggregate dollar
amount of ``covered sales'' occurring on the exchange or through a
member of
[[Page 35929]]
the national securities association and to pay fees based on those
covered sales to the Commission (``Section 31 fees''). A covered sale
is a ``sale of a security, other than an exempt sale or a sale of a
security future, occurring on a national securities exchange or by or
through any member of a national securities association otherwise than
on a national securities exchange.'' \5\ Pursuant to Section 6 of the
Fees Schedule, the Exchange assesses a Trading Permit Holder the Sales
Value Fee for an executed sell order entered on C2 that results in a
covered sale. The Sales Value Fee defrays the cost of the Section 31
fee triggered by the covered sale. In this regard, the Sales Value Fee
assessed a Trading Permit Holder is equal to the Section 31 fee
assessed by the Commission for the covered sale. Further, the Exchange
adjusts the Sales Value Fee in lock step with changes to the Section 31
fee made by the Commission. Assessing a sales fee is common practice
among the national securities exchanges and associations.\6\
---------------------------------------------------------------------------
\3\ 15 U.S.C. 78ee.
\4\ 17 CFR 240.31.
\5\ 17 CFR 240.31(a)(6).
\6\ See, e.g., ISE Rule 212, NASDAQ Rule 7002, NASDAQ OMX PHLX
Rule 607 and NYSE Rule 440H.
---------------------------------------------------------------------------
As noted above, the Sales Value Fee defrays the cost of the Section
31 fee. The Sales Value Fee is triggered by the fulfillment of a
Trading Permit Holder's sell order in options securities entered on C2
that results in a covered sale. If the Trading Permit Holder's sell
order is fulfilled on C2, the Exchange incurs a Section 31 fee
obligation. Sell orders in securities entered on C2 that are routed to
another market for execution, however, do not result in a covered sale
on C2. Execution of such routed orders is facilitated by C2's routing
broker,\7\ which acts as the selling Trading Permit Holder for a routed
order on the away market on behalf of the C2 Trading Permit Holder that
entered the sell order. Such routed sell orders result in a covered
sale on the away market, which incurs a Section 31 fee obligation. Like
the Exchange, the away market assesses a sales fee on the Trading
Permit Holder that entered the sell order, in this case the C2 routing
broker, to defray the cost of the Section 31 fee obligation. The
Exchange may reimburse its routing broker for all Section 31-related
fees (e.g., away market sales fees) incurred by the routing broker in
connection with the routing services it provides. In turn, the Exchange
assesses its Trading Permit Holder, the original selling party, a Sales
Value Fee pursuant to Section 6 of the Fees Schedule to defray the cost
of the Section 31 fee passed on by the away exchange pursuant to its
sales fee. As such, the Exchange's Sales Value Fee offsets the sales
fee its routing broker is assessed by the away market (which the
routing broker then passes to C2), the result of which is to place the
parties involved in the transaction in the same position as if the
covered sale had occurred on C2.
---------------------------------------------------------------------------
\7\ C2 routes orders to other exchanges in conjunction with one
or more routing brokers pursuant to C2 Rule 636.
---------------------------------------------------------------------------
In light of the varying means by which a Sales Value Fee is
incurred by Trading Permit Holders, as described above, the Exchange
believes that a more detailed description of the circumstances that
trigger the Sales Value Fee is warranted. Accordingly, the new Fees
Schedule language proposed by the Exchange expressly discusses covered
sales in option securities. In addition, the proposed new Fees Schedule
language includes a description of sell orders entered on C2 that
result in a covered sale on another exchange, expressly discussing the
fee incurred by the Exchange and the application of the Sales Value Fee
in that circumstance.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Securities Exchange Act of 1934 (``Act''),\8\ in
general, and furthers the objectives of Section 6(b)(4) \9\ of the Act
in particular, in that it is designed to provide for the equitable
allocation of reasonable dues, fees, and other charges among C2 Trading
Permit Holders and other persons using its facilities and it does not
unfairly discriminate between customers, issuers, brokers or dealers.
The proposed clarifying language does not change the application and
assessment of the Sales Value Fee under the Fees Schedule, but rather
provides greater detail on the transactions that trigger the fee and
the process by which the fee is collected. The Exchange applies Section
6 of its Fees Schedule uniformly to all Trading Permit Holders' sell
orders entered on C2 resulting in covered sales. The Exchange also
believes the proposed rule change is consistent with the provisions of
Section 6 of the Act,\10\ in general and with Section 6(b)(5) of the
Act,\11\ in particular, which requires that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices,
promote just and equitable principles of trade, foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general,
protect investors and the public interest. The Exchange believes that
the proposed rule change is consistent with these requirements because
the proposed amended Fees Schedule text provides Trading Permit Holders
with more detail regarding the circumstances under which the Exchange
assesses a Sales Value Fee, and the process by which the fee is
collected. As such, the proposed changes will help avoid Trading Permit
Holder confusion and foster better understanding of the application of
the fee. Accordingly, the Exchange believes the proposed rule change
will promote just and equitable principles of trade, remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and protect investors and the public interest.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4).
\10\ 15 U.S.C. 78f.
\11\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
C2 does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in
furtherance of 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 foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \12\ and subparagraph (f)(2) of Rule 19b-4 \13\
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.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing,
[[Page 35930]]
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-C2-2011-013 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-C2-2011-013. 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 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-C2-2011-013 and should be
submitted on or before July 11, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-15280 Filed 6-17-11; 8:45 am]
BILLING CODE 8011-01-P
