Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend Its Fees Schedule Regarding Automated Improvement Mechanism Fees, 41842-41844 [2011-17794]
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41842
Federal Register / Vol. 76, No. 136 / Friday, July 15, 2011 / Notices
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
2011–057 and should be submitted on
or before August 5, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–17791 Filed 7–14–11; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–64851; File No. SR–CBOE–
2011–062]
• 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–2011–057 on the
subject line.
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change to Amend Its Fees
Schedule Regarding Automated
Improvement Mechanism Fees
Paper Comments
July 11, 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 June 30,
2011, the Chicago Board Options
Exchange, Incorporated (the ‘‘Exchange’’
or ‘‘CBOE’’) filed with the Securities
All submissions should refer to File
and Exchange Commission (the
Number SR–CBOE–2011–057. This file
‘‘Commission’’) the proposed rule
number should be included on the
subject line if e-mail is used. To help the change, as described in Items I, II, and
III below, which items have been
Commission process and review your
prepared by the Exchange. The
comments more efficiently, please use
only one method. The Commission will Commission is publishing this notice to
post all comments on the Commission’s solicit comments on the proposed rule
change from interested persons.
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
I. Self-Regulatory Organization’s
submission, all subsequent
Statement of the Terms of the Substance
amendments, all written statements
of the Proposed Rule Change
with respect to the proposed rule
The Exchange proposes to amend its
change that are filed with the
Fees Schedule regarding Automated
Commission, and all written
Improvement Mechanism (‘‘AIM’’) fees.
communications relating to the
The text of the proposed rule change is
proposed rule change between the
Commission and any person, other than available on the Exchange’s Web site
(https://www.cboe.org/legal), at the
those that may be withheld from the
Exchange’s Office of the Secretary, and
public in accordance with the
at the Commission’s Public Reference
provisions of 5 U.S.C. 552, will be
Room.
available for Web site viewing and
printing in the Commission’s Public
II. Self-Regulatory Organization’s
Reference Room, 100 F Street, NE.,
Statement of the Purpose of, and
Washington, DC 20549, on official
Statutory Basis for, the Proposed Rule
business days between the hours of
Change
10 a.m. and 3 p.m. Copies of the filing
In its filing with the Commission, the
also will be available for inspection and
self-regulatory organization included
copying at the principal office of the
statements concerning the purpose of
Exchange. All comments received will
and basis for the proposed rule change
be posted without change; the
and discussed any comments it received
Commission does not edit personal
on the proposed rule change. The text
identifying information from
of those statements may be examined at
submissions. You should submit only
information that you wish to make
13 17 CFR 200.30–3(a)(12).
available publicly. All submissions
1 15 U.S.C. 78s(b)(1).
should refer to File Number SR–CBOE–
2 17 CFR 240.19b–4.
mstockstill on DSK4VPTVN1PROD with NOTICES
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
16:55 Jul 14, 2011
Jkt 223001
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
VerDate Mar<15>2010
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.
PO 00000
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Sfmt 4703
The Exchange proposes to amend its
Fees Schedule regarding broker-dealer
Automated Improvement Mechanism
orders. Specifically, the Exchange
proposes to adopt a $0.20 per contract
fee to be applied to broker-dealer orders
entered as the agency/primary side of an
AIM transaction (the ‘‘Broker-Dealer
AIM Agency Fee’’) and make related
clarifying changes to the Fees
Schedule.3
On June 13, 2011, the Commission
approved a proposed rule change to
allow the Exchange to establish the
Qualified Contingent Cross (‘‘QCC’’)
order type.4 In conjunction with that
approval, on June 29, 2011, the
Exchange filed, for immediate
effectiveness, a proposed rule change to
adopt fees related to the QCC order
type.5 Included in that proposed rule
change is a proposal to adopt a $0.20
per contract transaction fee for the
execution of broker-dealer QCC orders
(the ‘‘Broker-Dealer QCC Fee’’). The
Exchange intends to make available the
QCC order type and make effective the
related fees, including the Broker-Dealer
QCC Fee, on July 1, 2011.
Like QCC, AIM involves the crossing
of paired orders. AIM can be used to
cross options orders through an exposed
auction process. QCC can be used to
cross options orders in an unexposed
procedure, as long as the orders are tied
to stock in a manner consistent with
3 The Commission notes that the Exchange
proposes to add footnote 19 to the Fees Schedule
to define the AIM Agency/Primary Fee as applying
to all broker-dealer orders in all products, except
volatility indexes, executed in AIM that were
initially entered into AIM as a Primary/Agency
Order (i.e., the ‘‘AIM Agency/Primary’’ fee applies
to the original order submitted to AIM that is being
facilitated if such order is for a broker-dealer and
does not involve a volatility index). The AIM
Agency/Primary Fee will apply to such executions
instead of the applicable standard transaction fee
except in volatility indexes where standard
transaction fees will apply. As discussed below, the
‘‘AIM contra execution fee’’ applies to the contra
party’s side of the trade (i.e., the contracts
submitted by the participant that is facilitating the
order). See email from Jeff Dritz, Attorney, CBOE to
Arisa Tinaves, Special Counsel, Division of Trading
and Markets, dated July 7, 2011.
4 See Securities Exchange Act Release No. 64653
(June 13, 2011), 76 FR 35491 (June 17, 2011) (SR–
CBOE–2011–041) and CBOE Rule 6.53(u).
5 See SR–CBOE–2011–058.
E:\FR\FM\15JYN1.SGM
15JYN1
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Federal Register / Vol. 76, No. 136 / Friday, July 15, 2011 / Notices
Rule 6.53(u).6 Therefore, in the case of
options orders that are represented as
tied to a stock transaction, brokerdealers can elect to use either the QCC
or the AIM mechanism to cross orders.
Currently, the transaction fee for
broker-dealers to execute the agency/
primary side of an AIM order is $0.45
per contract (as such orders are entered
electronically). However, the BrokerDealer QCC Fee is $0.20. While there are
differences between using QCC and
AIM, they can both be used for the
execution of paired orders. Therefore,
the Exchange proposes to adopt the
Broker-Dealer AIM Agency Fee of $0.20
in order to place AIM on an equal
competitive footing with QCC regarding
the entrance of broker-dealer orders.
The Exchange does not want cost to
discourage broker-dealers from using
the exposed auction mechanism and
encourage them to use the QCC
mechanism.
Additionally, the amount of the
Broker-Dealer AIM Agency Fee of $0.20
per contract is competitive with similar
fees charged by other exchanges.7
The Exchange also proposes to make
clarifying changes to the Fees Schedule
related to AIM fees. Specifically, the
Exchange proposes to clarify that the
current AIM Execution Fee applies only
to the contra party to the AIM Agency/
Primary Order by changing the title of
the fee to the ‘‘AIM Contra Execution
Fee.’’ While the footnote describing the
AIM Execution Fee explains this fact,
the modification of the title is more
descriptive for users and will help to
distinguish this existing fee in the Fees
Schedule from the new AIM Agency/
Primary Order fee for broker-dealer
orders that is discussed above.
The Exchange also proposes to make
a non-substantive technical correction
to the Fees Schedule. Under the BrokerDealer Index Options Transaction Fees
in Section 1, the first bullet point lists
the per-contract fee for transactions in
OEX, XEO, SPX, S&P 500 Divided Index
and Volatility Indexes. It should read
‘‘S&P 500 Dividend Index’’, not ‘‘S&P
500 Divided Index.’’ The Exchange
proposes to correct this inadvertent
error by adding the letter ‘‘n’’ in the
correct place to make the word
‘‘Dividend.’’
The proposed rule change will take
effect on July 1, 2011.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the 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 CBOE
Trading Permit Holders and other
persons using Exchange facilities.
Adopting a fee of the same amount per
contract for broker-dealer orders entered
as the agency/primary side of an AIM
transaction as is charged for the
execution of broker-dealers QCC orders
is an equitable allocation of reasonable
fees because both AIM and QCC are
mechanisms that can be used for the
execution of paired orders and the
equivalent fee puts the two on a level
competitive footing. Further, the
amount of the proposed fee is
competitive with similar fees charged by
other exchanges.10
In amending the Fees Schedule to
change the title of the ‘‘AIM Execution
Fee’’ to the ‘‘AIM Contra Execution
Fee,’’ and making a non-substantive
technical correction, the proposed rule
change is more descriptive for users and
should help to distinguish this existing
fee from the new AIM Agency/Primary
Order Execution Fee, and avoids any
potential confusion about the
applicability of the fees. These technical
changes, which are designed to make
the Fees Schedule more descriptive and
avoid confusion, further the objectives
of Section 6(b)(5) 11 of the Act in
particular, in that they 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.
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.
6 See
CBOE Rule 6.53(u).
International Securities Exchange, LLC
(‘‘ISE’’) charges $0.20 per contract for similar orders
transacted through its Price Improvement
Mechanism. See ISE Schedule of Fees, page 16–17.
7 The
VerDate Mar<15>2010
16:55 Jul 14, 2011
Jkt 223001
PO 00000
8 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
10 See Note 7.
11 15 U.S.C. 78f(b)(5).
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) 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,
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–2011–062 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–2011–062. 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
9 15
Frm 00091
Fmt 4703
12 15
13 17
Sfmt 4703
41843
E:\FR\FM\15JYN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
15JYN1
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Federal Register / Vol. 76, No. 136 / Friday, July 15, 2011 / Notices
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 Number SR–CBOE–
2011–062, and should be submitted on
or before August 5, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–17794 Filed 7–14–11; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating To Amend NYSE
Arca Equities Rule 7.31(b) To Add Text
Describing How Limit Orders Priced a
Specified Percentage Away From the
National Best Bid or Offer Will Be
Rejected by Exchange Systems
July 12, 2011.
mstockstill on DSK4VPTVN1PROD with NOTICES
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on July 6,
2011, NYSE Arca, Inc. (the ‘‘Exchange’’
or ‘‘NYSE Arca’’) 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 self-regulatory organization. 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 amend
NYSE Arca Equities Rule 7.31(b) to add
text describing how limit orders priced
a specified percentage away from the
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
VerDate Mar<15>2010
16:55 Jul 14, 2011
Jkt 223001
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.
1. Purpose
[Release No. 34–64857; File No. SR–
NYSEArca–2011–45]
1 15
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
14 17
national best bid or offer will be rejected
by Exchange systems. The text of the
proposed rule change is available at the
Exchange, the Commission’s Public
Reference Room, https://www.nyse.com,
and https://www.sec.gov.
The Exchange proposes to amend
NYSE Arca Equities Rule 7.31(b) to add
text describing how limit orders priced
a specified percentage away from the
national best bid or national best offer
will be rejected by Exchange systems.
The Exchange believes that the
proposed treatment of limit orders
serves as an additional safeguard that
could help limit potential harm from
extreme price volatility by preventing
executions that could occur at a price
significantly away from the contra side
national best bid or national best offer.
As proposed, the Exchange will reject
limit orders that are priced a specified
percentage away from the contra side
national best bid or national best offer,
as defined in Rule 600(b)(42) of
Regulation NMS. As the Exchange
receives limit orders, Exchange systems
will check the price of the limit order
against the contra-side national best bid
(‘‘NBB’’) or national best offer (‘‘NBO’’)
at the time of the order entry to
determine whether the limit order is
within the specified percentage.
As proposed, the specified percentage
will be equal to the corresponding
‘‘numerical guideline’’ percentages set
forth in paragraph (c)(1) of Rule 7.10
(Clearly Erroneous Executions) that are
used for the Core Trading Sessions.
Accordingly, the specified percentage
will be 10% if the NBB or NBO is
$25.00 and below, 5% if the NBB or
NBO is between $25.01 and $50.00, and
3% if the NBB or NBO is greater than
$50.00. If the limit order is priced
PO 00000
Frm 00092
Fmt 4703
Sfmt 4703
outside of the specified percentage, the
limit order will be rejected. For
example, if the NBB is $26.00, a sell
order priced at or below $24.70, which
is 5% below the NBB, would be
rejected. Likewise, if the NBO is $55.00,
a buy order priced at or above $56.65,
which is 3% above the NBO, would be
rejected.
The Exchange believes that this
mechanism will prevent the entry of
super-marketable limit orders, i.e., limit
orders that in essence act like market
orders because they are priced so far
away from the prevailing market price
that could cause significant price
dislocation in the market. The Exchange
also believes that this mechanism will
further serve to mitigate the potential for
clearly erroneous executions to occur.
2. Statutory Basis
The statutory basis for the proposed
rule change is Section 6(b)(5) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),4 which requires the rules of an
exchange to promote just and equitable
principles of trade, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system and, in
general, to protect investors and the
public interest. The proposed rule
change also is designed to support the
principles of Section 11A(a)(1) 5 of the
Act in that it seeks to assure fair
competition among brokers and dealers
and among exchange markets. The
Exchange believes that the proposed
rule meets these requirements in that it
ensures that limit orders will not cause
the price of a security to move beyond
prices that could otherwise be
determined to be a clearly erroneous
execution, thereby protecting investors
from receiving executions away from
the prevailing prices at any given time.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is 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.
4 15
5 15
E:\FR\FM\15JYN1.SGM
U.S.C. 78f(b)(5).
U.S.C. 78k–1(a)(1).
15JYN1
]]>Agencies
[Federal Register Volume 76, Number 136 (Friday, July 15, 2011)]
[Notices]
[Pages 41842-41844]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-17794]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64851; File No. SR-CBOE-2011-062]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change to Amend Its Fees Schedule Regarding Automated
Improvement Mechanism Fees
July 11, 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 June 30, 2011, the 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, 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange proposes to amend its Fees Schedule regarding
Automated Improvement Mechanism (``AIM'') fees. The text of the
proposed rule change is available on the Exchange's Web site (https://www.cboe.org/legal), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of and basis for the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
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
The Exchange proposes to amend its Fees Schedule regarding broker-
dealer Automated Improvement Mechanism orders. Specifically, the
Exchange proposes to adopt a $0.20 per contract fee to be applied to
broker-dealer orders entered as the agency/primary side of an AIM
transaction (the ``Broker-Dealer AIM Agency Fee'') and make related
clarifying changes to the Fees Schedule.\3\
---------------------------------------------------------------------------
\3\ The Commission notes that the Exchange proposes to add
footnote 19 to the Fees Schedule to define the AIM Agency/Primary
Fee as applying to all broker-dealer orders in all products, except
volatility indexes, executed in AIM that were initially entered into
AIM as a Primary/Agency Order (i.e., the ``AIM Agency/Primary'' fee
applies to the original order submitted to AIM that is being
facilitated if such order is for a broker-dealer and does not
involve a volatility index). The AIM Agency/Primary Fee will apply
to such executions instead of the applicable standard transaction
fee except in volatility indexes where standard transaction fees
will apply. As discussed below, the ``AIM contra execution fee''
applies to the contra party's side of the trade (i.e., the contracts
submitted by the participant that is facilitating the order). See
email from Jeff Dritz, Attorney, CBOE to Arisa Tinaves, Special
Counsel, Division of Trading and Markets, dated July 7, 2011.
---------------------------------------------------------------------------
On June 13, 2011, the Commission approved a proposed rule change to
allow the Exchange to establish the Qualified Contingent Cross
(``QCC'') order type.\4\ In conjunction with that approval, on June 29,
2011, the Exchange filed, for immediate effectiveness, a proposed rule
change to adopt fees related to the QCC order type.\5\ Included in that
proposed rule change is a proposal to adopt a $0.20 per contract
transaction fee for the execution of broker-dealer QCC orders (the
``Broker-Dealer QCC Fee''). The Exchange intends to make available the
QCC order type and make effective the related fees, including the
Broker-Dealer QCC Fee, on July 1, 2011.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 64653 (June 13,
2011), 76 FR 35491 (June 17, 2011) (SR-CBOE-2011-041) and CBOE Rule
6.53(u).
\5\ See SR-CBOE-2011-058.
---------------------------------------------------------------------------
Like QCC, AIM involves the crossing of paired orders. AIM can be
used to cross options orders through an exposed auction process. QCC
can be used to cross options orders in an unexposed procedure, as long
as the orders are tied to stock in a manner consistent with
[[Page 41843]]
Rule 6.53(u).\6\ Therefore, in the case of options orders that are
represented as tied to a stock transaction, broker-dealers can elect to
use either the QCC or the AIM mechanism to cross orders.
---------------------------------------------------------------------------
\6\ See CBOE Rule 6.53(u).
---------------------------------------------------------------------------
Currently, the transaction fee for broker-dealers to execute the
agency/primary side of an AIM order is $0.45 per contract (as such
orders are entered electronically). However, the Broker-Dealer QCC Fee
is $0.20. While there are differences between using QCC and AIM, they
can both be used for the execution of paired orders. Therefore, the
Exchange proposes to adopt the Broker-Dealer AIM Agency Fee of $0.20 in
order to place AIM on an equal competitive footing with QCC regarding
the entrance of broker-dealer orders. The Exchange does not want cost
to discourage broker-dealers from using the exposed auction mechanism
and encourage them to use the QCC mechanism.
Additionally, the amount of the Broker-Dealer AIM Agency Fee of
$0.20 per contract is competitive with similar fees charged by other
exchanges.\7\
---------------------------------------------------------------------------
\7\ The International Securities Exchange, LLC (``ISE'') charges
$0.20 per contract for similar orders transacted through its Price
Improvement Mechanism. See ISE Schedule of Fees, page 16-17.
---------------------------------------------------------------------------
The Exchange also proposes to make clarifying changes to the Fees
Schedule related to AIM fees. Specifically, the Exchange proposes to
clarify that the current AIM Execution Fee applies only to the contra
party to the AIM Agency/Primary Order by changing the title of the fee
to the ``AIM Contra Execution Fee.'' While the footnote describing the
AIM Execution Fee explains this fact, the modification of the title is
more descriptive for users and will help to distinguish this existing
fee in the Fees Schedule from the new AIM Agency/Primary Order fee for
broker-dealer orders that is discussed above.
The Exchange also proposes to make a non-substantive technical
correction to the Fees Schedule. Under the Broker-Dealer Index Options
Transaction Fees in Section 1, the first bullet point lists the per-
contract fee for transactions in OEX, XEO, SPX, S&P 500 Divided Index
and Volatility Indexes. It should read ``S&P 500 Dividend Index'', not
``S&P 500 Divided Index.'' The Exchange proposes to correct this
inadvertent error by adding the letter ``n'' in the correct place to
make the word ``Dividend.''
The proposed rule change will take effect on July 1, 2011.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
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
CBOE Trading Permit Holders and other persons using Exchange
facilities. Adopting a fee of the same amount per contract for broker-
dealer orders entered as the agency/primary side of an AIM transaction
as is charged for the execution of broker-dealers QCC orders is an
equitable allocation of reasonable fees because both AIM and QCC are
mechanisms that can be used for the execution of paired orders and the
equivalent fee puts the two on a level competitive footing. Further,
the amount of the proposed fee is competitive with similar fees charged
by other exchanges.\10\
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4).
\10\ See Note 7.
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In amending the Fees Schedule to change the title of the ``AIM
Execution Fee'' to the ``AIM Contra Execution Fee,'' and making a non-
substantive technical correction, the proposed rule change is more
descriptive for users and should help to distinguish this existing fee
from the new AIM Agency/Primary Order Execution Fee, and avoids any
potential confusion about the applicability of the fees. These
technical changes, which are designed to make the Fees Schedule more
descriptive and avoid confusion, further the objectives of Section
6(b)(5) \11\ of the Act in particular, in that they 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.
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\11\ 15 U.S.C. 78f(b)(5).
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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)
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, 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-2011-062 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-2011-062. 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
[[Page 41844]]
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 Number SR-CBOE-2011-062, and should be
submitted on or before August 5, 2011.
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\14\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-17794 Filed 7-14-11; 8:45 am]
BILLING CODE 8011-01-P
