[Federal Register Volume 76, Number 49 (Monday, March 14, 2011)]
[Notices]
[Pages 13692-13694]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-5719]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64051; File No. SR-CBOE-2011-023]
Self-Regulatory Organizations; Chicago Board 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.
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 March 1, 2011, Chicago Board Options Exchange, Incorporated
(``CBOE'' or the ``Exchange'') filed with the Securities and Exchange
Commission
[[Page 13693]]
(``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.
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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
Chicago Board Options Exchange, Incorporated (``CBOE'' or
``Exchange'') proposes to establish a revenue sharing program with
Correlix, Inc. 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, the Proposed Rule Change
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 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
Exchange-generated 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.
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\3\ The product measures latency of orders whether the orders
are rejected, executed or partially executed.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of the Securities Exchange Act of 1934
(``Act''),\4\ in general, and with Section 6(b)(5) \5\ of the Act in
particular, in that the proposal 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 regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, 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. In particular, the proposal
will provide greater transparency into trade and information processing
and thus allow market participants to make better informed and more
efficient trading decisions.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78(f)(b)(5).
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In addition, the Exchange believes that the proposed rule change is
consistent with the provisions of Section 6 of the Act in general, and
with Section 6(b)(4)\6\ of the Act in particular, in that it provides
for the equitable allocation of reasonable dues, fees and other charges
among CBOE Trading Permit Holders and other persons using any facility
or system which the Exchange operates or controls. In particular, the
Exchange notes that the use of Correlix latency measurement services is
entirely voluntary and made available on a non-discriminatory basis. In
addition, the Exchange believes the proposed fees are equitable and
reasonable in that they are charged uniformly to all market
participants and are comparable to the fees charged by Correlix in
connection with its revenue sharing programs with other exchanges.
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\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 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 Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
[[Page 13694]]
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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\7\ 15 U.S.C. 78s(b)(3)(A)(iii).
\8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Commission notes that the Exchange satisfied this five-day pre-
filing requirement.
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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-2011-023 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-2011-023. 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 the 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-2011-023 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. 2011-5719 Filed 3-11-11; 8:45 am]
BILLING CODE 8011-01-P