[Federal Register Volume 75, Number 236 (Thursday, December 9, 2010)]
[Notices]
[Pages 76767-76768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-30945]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63426; File No. SR-CBOE-2010-107]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated: Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Relating to Amendment of the Hybrid Agency Liaison Step-Up
Rebate
December 3, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of
1934, 15 U.S.C. 78s(b)(1), notice is hereby given that on December 1,
2010, Chicago Board Options Exchange, Incorporated (``CBOE'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by CBOE. 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
Chicago Board Options Exchange, Incorporated (``CBOE'' or
``Exchange'') proposes to amend the Hybrid Agency Liaison (``HAL'')
step-up rebate. 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, CBOE included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. CBOE has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, Proposed Rule Change
1. Purpose
In order to incent market makers to execute orders at CBOE versus
routing orders to other exchanges pursuant to the Options Order
Protection and Locked/Crossed Plan, the Exchange provides a rebate to
market-makers that ``step-up'' and trade all or part of certain orders
on the HAL system.\1\ Specifically, the Exchange rebates to a market-
maker $.20 per contract against transaction fees generated from a
transaction on the HAL system in a penny pilot class, provided that at
least 60% of the market-maker's quotes in that class (excluding quotes
in LEAPS series) in the prior calendar month were on one side of the
national best bid or offer (``NBBO'') price. Market-makers not meeting
this 60% qualifying threshold are not eligible to receive a rebate. The
Exchange proposes to reduce the amount of the rebate from $.20 per
contract to $.15 per contract effective December 1, 2010. All other
aspects of the rebate program would remain unchanged.
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\1\ See CBOE Fees Schedule, Section 19. HAL is a system for
automated handling of electronically received orders that are not
automatically executed upon receipt by the Hybrid System. CBOE Rule
6.14A governs the operation of the HAL system under the Options
Order Protection and Locked/Crossed Plan.
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Securities Exchange Act of 1934 (``Act''),\2\ in
general, and furthers the objectives of Section 6(b)(4) \3\ of the Act
in particular, in that it is designed to provide for the equitable
allocation of reasonable dues, fees, and other charges among its
trading permit holders. The Exchange believes the proposed rebate is
reasonable because it provides an incentive for market-makers to
compete better for order flow in the penny pilot classes. The Exchange
believes the proposed rebate is equitable because it applies equally to
all market makers that trade orders in penny pilot classes on the HAL
system and that meet the qualifying quoting criteria.
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\2\ 15 U.S.C. 78f(b).
\3\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
CBOE does not believe that the proposed rule change will impose any
burden on competition that is not necessary or 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 \4\ and subparagraph (f)(2) of Rule 19b-4 \5\
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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\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ 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.
[[Page 76768]]
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 [email protected]. Please include
File Number SR-CBOE-2010-107 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.
All submissions should refer to File Number SR-CBOE-2010-107. 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 (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 Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549 on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of CBOE. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-CBOE-2010-107 and should be
submitted on or before December 30, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-30945 Filed 12-8-10; 8:45 am]
BILLING CODE 8011-01-P