[Federal Register Volume 75, Number 241 (Thursday, December 16, 2010)]
[Notices]
[Pages 78792-78794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-31634]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63525; File No. SR-CBOE-2010-104]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Relating to Professional and Voluntary Professional Fees
December 10, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 2, 2010, the Chicago Board Options Exchange,
Incorporated (``CBOE'' or the ``Exchange'') filed with the Securities
and Exchange Commission (``Commission'') the proposed rule change as
described in Items I, II and III below, which Items have been prepared
by CBOE. The Exchange has designated this proposal as one establishing
or changing a due, fee, or other charge imposed by CBOE under Section
19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) thereunder.\4\ The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to amend its Fees Schedule as it relates
to fees for certain orders. 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.
[[Page 78793]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this rule change is to adopt fees for Professional
and Voluntary Professional transactions in S&P 500 Index option series
(``SPX'') that trade on the Hybrid Trading System. The fees, which are
described in more detail below, will be effective December 2, 2010.
By way of background, the Exchange currently operates the Hybrid
Trading System and the Hybrid 3.0 Platform.\5\ For the Hybrid Trading
System, the Exchange has Professional and Voluntary Professional
designations for non-broker-dealer customer orders.\6\ However, these
two designations are not available for non-broker-dealer customer
orders in option classes trading on the Hybrid 3.0 Platform (which
currently is only SPX).\7\ Also by way of background, the particular
trading platform on which index options trade is designated by the
Exchange on a class-by-class basis pursuant to Rule 8.14, Index Hybrid
Trading System Classes: Market-Maker Participants. However, CBOE
recently amended Rule 8.14 to provide that, for each Hybrid 3.0 class,
the Exchange may determine to authorize a group of series of the class
for trading on the Hybrid Trading System.\8\
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\5\ The ``Hybrid Trading System'' refers to the Exchange's
trading platform that allows Market-Makers to submit electronic
quotes in their appointed classes. The ``Hybrid 3.0 Platform'' is an
electronic trading platform on the Hybrid Trading System that allows
one or more quoters to submit electronic quotes, which represent the
aggregate Market-Maker quoting interest in the series for the
trading crowd. See Rule 1.1(aaa).
\6\ The term ``Professional'' means any person or entity that
(i) is not a broker or dealer in securities, and (ii) places more
than 390 orders in listed options per day on average during a
calendar month for its own beneficial account. A Professional will
be treated in the same manner as a broker or dealer in securities
for purposes of various CBOE Rules. The term ``Voluntary
Professional'' means any person or entity that is not a broker or
dealer in securities that elects, in writing, to be treated in the
same manner as a broker or dealer in securities for purposes of
various CBOE Rules. The Professional and Voluntary Professional
designations are not available in Hybrid 3.0 classes. See CBOE Rules
1.1(fff) and (ggg).
\7\ Id.
\8\ See Securities Exchange Act Release No. 63186 (October 27,
2010), 75 FR 67417 (November 2, 2010) (SR-CBOE-2010-095).
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Currently, all series of the SPX option class trade on the Hybrid
3.0 Platform. Therefore, at this time there are no Professional or
Voluntary Professional designations for SPX. Pursuant to Rule 8.14, as
amended, however, the Exchange may determine to designate a group of
series in the SPX index option class for trading on the Hybrid Trading
System. As a result, the Professional and Voluntary Professional
designations would be applicable to any such SPX series trading on the
Hybrid Trading System.
In anticipation of the Exchange designating a group of SPX series
for trading on the Hybrid Trading System, the Exchange is proposing to
adopt fees for Professional and Voluntary Professional transactions in
SPX that trade on the Hybrid Trading System. The Exchange proposes to
charge such Professional and Voluntary Professional orders in the same
manner that it charges broker-dealer orders. Specifically, the Exchange
is proposing to amend the text of its Fees Schedule to assess a fee of
$0.40 per contract for Professional and Voluntary Professional
transactions in SPX option series that trade on the Hybrid Trading
System. The Exchange notes that, in accordance with footnote 14 of its
Fees Schedule, the index option surcharge fee would also apply to
Professional and Voluntary Professional transactions in such SPX
series. The Exchange also notes that the Options Regulatory Fee
(``ORF'') contained in section 12 of the Fees Schedule will apply to
Professional and Voluntary Professional transactions in such SPX
series. In addition, the Exchange notes that Professional and Voluntary
Professional orders in such SPX series will not be subject to the order
handling system order cancellation fee contained in section 14 of the
Fees Schedule. No changes to the text are needed to reflect the
applicability of these surcharge, ORF and cancellation fee provisions.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\9\ in general, and furthers the objectives of Section 6(b)(4) of
the Act,\10\ 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. The proposed fee changes would provide
clarity on how the Exchange intends to implement the Professional and
Voluntary Professional designation for SPX series trading the Hybrid
Trading System.
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\9\ 15 U.S.C. 78f(b).
\10\ 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 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) of the Act \11\ and subparagraph (f)(2) of Rule 19b-4
\12\ thereunder.
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\11\ 15 U.S.C. 78s(b)(3)(A)(ii).
\12\ 17 CFR 240.19b-4(f)(2).
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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 (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-CBOE-2010-104 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-CBOE-2010-104. 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
[[Page 78794]]
submission,\13\ 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 the 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-2010-104 and should be submitted on
or before January 6, 2011.
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\13\ The text of the proposed rule change is available on CBOE's
Web site at http://www.cboe.org/Legal, on the Commission's Web site
at http://www.sec.gov, at CBOE, and at the Commission's Public
Reference Room.
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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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-31634 Filed 12-15-10; 8:45 am]
BILLING CODE 8011-01-P