12386 Federal Register / Vol. 76, No. 44 / Monday, March 7, 2011 / Notices 

13 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3A ‘‘Customer’’ is any entity that receives the BBO 

Data Feed directly from MDX’s system and then 

distributes it either internally or externally to 

Subscribers. A ‘‘Subscriber’’ is a person (other than 

an employee of a Customer) that receives the BBO 

Data Feed from a Customer for its own internal use. 

4The Exchange notes that MDX makes available 

to Customers the BBO data and last sale data that 

is included in the BBO Data Feed no earlier than 

the time at which the Exchange sends that data to 

OPRA. The Exchange also notes that it also makes 

the BBO data and last sale data that is included in 

the BBO Data Feed available directly to its Trading 

Permit Holders, and permits them to redistribute 

the data to their customers. 

5 15 U.S.C. 78f(b). 

6 15 U.S.C. 78f(b)(4). 

7 15 U.S.C. 78f(b)(5). 

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 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 offices 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–2011–018, and 

should be submitted on or before March 

28, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–5063 Filed 3–4–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63996; File No. SR–C2– 

2011–007] 

Self-Regulatory Organizations; C2 

Options Exchange, Incorporated; 

Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change to Codify a Fee Schedule for 

the Sale by Market Data Express, LLC, 

of a BBO Data Feed for C2 Listed 

Options 

March 1, 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 February 

17, 2011, C2 Options Exchange, 

Incorporated (‘‘C2’’ or the ‘‘Exchange’’) 

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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

This proposal submitted by C2 

Options Exchange, Incorporated (‘‘C2’’ or 

‘‘Exchange’’) is to codify a fee schedule 

for the sale by Market Data Express, LLC 

(‘‘MDX’’), an affiliate of C2, of a data 

product that includes C2 best bid and 

offer and trade data and certain related 

market data. The text of the proposed 

rule change is available on the 

Exchange’s website. (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, 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, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to establish fees that MDX will 

charge for the sale of certain market data 

with respect to the trading of options on 

C2’s market. 

C2 currently collects and processes 

market data with respect to options 

quotes and orders and the prices of 

trades that are executed on the 

Exchange. This market data includes the 

‘‘best bid and offer,’’ or ‘‘BBO’’, 

consisting of all outstanding quotes and 

standing orders at the best available 

price level on each side of the market, 

with aggregate size (‘‘BBO data,’’ 

sometimes referred to as ‘‘top of book 

data’’). Data with respect to executed 

trades is referred to as ‘‘last sale’’ data. 

C2 formats its BBO data and last sale 

data according to Options Price 

Reporting Authority (‘‘OPRA’’) 

specifications and sends the data to 

OPRA for redistribution to the public. 

MDX provides to ‘‘Customers’’ 3 a realtime, low latency data feed that includes 

the C2 BBO data and last sale data. (This 

data feed is sometimes referred to in this 

filing as the ‘‘BBO Data Feed’’). The BBO 

and last sale data contained in the BBO 

Data Feed is identical to the data that C2 

sends to OPRA.4 In addition, the BBO 

Data Feed includes certain data that is 

not included in the data sent to OPRA, 

namely, totals of customer versus noncustomer contracts at the BBO, All-orNone contingency orders priced better 

than or equal to the BBO, and BBO data 

and last sale data for complex strategies 

(e.g., spreads, straddles, buy-writes, 

etc.). The purpose of this proposed rule 

change is to establish the fees MDX will 

charge for the sale of the BBO Data 

Feed. 

MDX would charge Customers a 

‘‘direct connect fee’’ of $1,000 per 

connection per month. MDX would also 

charge Customers a ‘‘per user fee’’ of $25 

per month per ‘‘Authorized User’’ or 

‘‘Device’’ for receipt of the BBO Data 

Feed by Subscribers. An ‘‘Authorized 

User’’ is defined as an individual user 

(an individual human being) who is 

uniquely identified (by user ID and 

confidential password or other 

unambiguous method reasonably 

acceptable to MDX) and authorized by 

a Customer to access the BBO Data Feed 

supplied by the Customer. A ‘‘Device’’ is 

defined as any computer, workstation or 

other item of equipment, fixed or 

portable, that receives, accesses and/or 

displays data in visual, audible or other 

form. Either a C2 Trading Permit Holder 

or a non-C2 Trading Permit Holder may 

be a Customer. All Customers would be 

assessed the same fees. 

The proposed fees would be 

implemented on March 1, 2011. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the requirements of Section 6(b) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 5 in general, and, in particular, 

with Section 6(b)(4) of the Act 6 in that 

it provides for the equitable allocation 

of reasonable dues, fees and other 

charges among C2 Trading Permit 

Holders and other persons using its 

facilities, and with Section 6(b)(5) 7 of 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 76, No. 44 / Monday, March 7, 2011 / Notices 12387 

8 15 U.S.C. 78f(b)(8). 

9See, NASDAQ OMX PHLX LLC Fee Schedule, 

Section X, Proprietary Data Feed Fees. 

10See, ISE Schedule of Fees, Market Data Fees. 

The Exchange believes that ISE does not market a 

separate data product that includes only its top of 

book prices, but top of book prices are an important 

element of the ISE Depth of Market Feed. 

11The Commission has previously made a finding 

that the options industry is subject to significant 

competitive forces. See e.g., Securities Exchange 

Act Release No. 59949 (May 20, 2009), 74 FR 25593 

(May 28, 2009) (SR–ISE–2009–97) [sic] (order 

approving ISE’s proposal to establish fees for a realtime depth of market data offering). 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(2). 

the Act in that there will be no unfair 

discrimination between customers, 

issuers, brokers, or dealers in the 

distribution of the data. In addition, the 

Exchange believes that the proposed 

rule change is consistent with the 

requirements of Section 6(b)(8) 8 of the 

Act in that it does not impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. The fees charged 

would be the same for all market 

participants, and therefore do not 

unreasonably discriminate among 

market participants. 

The Exchange believes that the 

proposed market data fees are consistent 

with the requirements of the Act for 

several reasons. First, they compare 

favorably to fees that other markets 

charge for similar products. The 

proposed direct connect fee of $1,000 

per connection per month and per user 

fee of $25 per month compares 

favorably to the fees NASDAQ OMX 

PHLX and ISE charge for similar market 

data products. NASDAQ OMX PHLX 

charges Internal Distributors a monthly 

fee of $4,000 per organization, External 

Distributors a monthly fee of $5,000 per 

organization and monthly subscriber 

fees of $20 per Professional Subscriber 

and $1 per Non-Professional Subscriber 

for its ‘‘TOPO Plus Orders’’ data feed, 

which like the BBO Data Feed includes 

top-of-book data (including orders, 

quotes and trades) and other market 

data.9 ISE charges distributors of its ISE 

Depth of Market Feed a monthly fee of 

$5,000 plus $50 per month per 

controlled device for Professionals and 

$5 per month per controlled device for 

Non-Professionals.10

The Exchange also believes that the 

proposed fees for the BBO Data Feed are 

consistent with the requirements of the 

Act because competition provides an 

effective constraint on the market data 

fees that the Exchange, through MDX, 

has the ability and the incentive to 

charge. C2 has a compelling need to 

attract order flow from market 

participants in order to maintain its 

share of trading volume. This 

compelling need to attract order flow 

imposes significant pressure on C2 to 

act reasonably in setting its fees for 

market data, particularly given that the 

market participants that will pay such 

fees often will be the same market 

participants from whom C2 must attract 

order flow. These market participants 

include broker-dealers that control the 

handling of a large volume of customer 

and proprietary order flow. Given the 

portability of order flow from one 

exchange to another, any exchange that 

sought to charge unreasonably high data 

fees would risk alienating many of the 

same customers on whose orders it 

depends for competitive survival. C2 

currently competes with eight options 

exchanges (including C2’s affiliate, 

Chicago Board Options Exchange) for 

order flow.11

C2 is constrained in pricing the BBO 

Data Feed by the availability to market 

participants of alternatives to 

purchasing the BBO Data Feed. C2 must 

consider the extent to which market 

participants would choose one or more 

alternatives instead of purchasing the 

exchange’s data. For example, the BBO 

data and last sale data available in the 

BBO Data Feed is included in the OPRA 

data feed. The OPRA data is widely 

distributed and relatively inexpensive, 

thus constraining C2’s ability to price 

the BBO Data Feed. In this respect, the 

OPRA data feed, which includes the 

exchange’s transaction information, is a 

significant alternative to the BBO Data 

Feed product. 

Further, other options exchanges can 

and have produced their own top-ofbook products, and thus are sources of 

potential competition for MDX. As 

noted above, NASDAQ OMX PHLX and 

ISE offer market data products that 

compete with the BBO Data Feed. In 

addition, the Exchange believes other 

options exchanges may currently offer 

top-of-book market data products for a 

fee or for free. 

For the reasons cited above, the 

Exchange believes that the BBO Data 

Feed offering, including the proposed 

fees, is equitable, fair, reasonable and 

not unreasonably discriminatory. In 

addition, the Exchange believes that no 

substantial countervailing basis exists to 

support a finding that the proposed 

terms and fees for the BBO Data Feed 

fails to meet the requirements of the 

Act. 

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. The Exchange believes that 

the BBO Data Feed offered by MDX will 

help attract new users and new order 

flow to the Exchange, thereby improving 

the Exchange’s ability to compete in the 

market for options order flow and 

executions. 

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, 

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 rulecomments@sec.gov. Please include File 

Number SR–C2–2011–007 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–C2–2011–007. 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). 


srobinson on DSKHWCL6B1PROD with NOTICES
12388 Federal Register / Vol. 76, No. 44 / Monday, March 7, 2011 / Notices 

14 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3A ‘‘Customer’’ is any entity that receives the BBO 

Data Feed directly from MDX’s system and then 

distributes it either internally or externally to 

Subscribers. A ‘‘Subscriber’’ is a person (other than 

an employee of a Customer) that receives the BBO 

Data Feed from a Customer for its own internal use. 

4The Exchange notes that MDX makes available 

to Customers the BBO data and last sale data that 

is included in the BBO Data Feed no earlier than 

the time at which the Exchange sends that data to 

OPRA. The Exchange also notes that it also makes 

the BBO data and last sale data that is included in 

the BBO Data Feed available directly to its Trading 

Permit Holders, and permits them to redistribute 

the data to their customers. 

5 15 U.S.C. 78f(b). 

6 15 U.S.C. 78f(b)(4). 

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 website viewing and 

printing in the Commission’s Public 

Reference Room 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 offices 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–C2–2011–007, and should 

be submitted on or before March 28, 

2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–5060 Filed 3–4–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63997; File No. SR–CBOE– 

2011–014] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Codify a Fee Schedule 

for the Sale by Market Data Express, 

LLC, of a BBO Data Feed for CBOE 

Listed Options 

March 1, 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 February 

17, 2011, 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 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 the Substance 

of the Proposed Rule Change 

This proposal submitted by Chicago 

Board Options Exchange, Incorporated 

(‘‘CBOE’’ or ‘‘Exchange’’) is to codify a fee 

schedule for the sale by Market Data 

Express, LLC (‘‘MDX’’), an affiliate of 

CBOE, of a data product that includes 

CBOE best bid and offer and trade data 

and certain related market data. 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’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, 

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 purpose of the proposed rule 

change is to establish fees that MDX will 

charge for the sale of certain market data 

with respect to the trading of options on 

CBOE’s market. 

CBOE currently collects and processes 

market data with respect to options 

quotes and orders and the prices of 

trades that are executed on the 

Exchange. This market data includes the 

‘‘best bid and offer,’’ or ‘‘BBO’’, 

consisting of all outstanding quotes and 

standing orders at the best available 

price level on each side of the market, 

with aggregate size (‘‘BBO data,’’ 

sometimes referred to as ‘‘top of book 

data’’). Data with respect to executed 

trades is referred to as ‘‘last sale’’ data. 

CBOE formats its BBO data and last sale 

data according to Options Price 

Reporting Authority (‘‘OPRA’’) 

specifications and sends the data to 

OPRA for redistribution to the public. 

MDX provides to ‘‘Customers’’ 3 a realtime, low latency data feed that includes 

the CBOE BBO data and last sale data. 

(This data feed is sometimes referred to 

in this filing as the ‘‘BBO Data Feed’’). 

The BBO and last sale data contained in 

the BBO Data Feed is identical to the 

data that CBOE sends to OPRA.4 In 

addition, the BBO Data Feed includes 

certain data that is not included in the 

data sent to OPRA, namely, totals of 

customer versus non-customer contracts 

at the BBO, All-or-None contingency 

orders priced better than or equal to the 

BBO, and BBO data and last sale data 

for complex strategies (e.g., spreads, 

straddles, buy-writes, etc.). The purpose 

of this proposed rule change is to 

establish the fees MDX will charge for 

the sale of the BBO Data Feed. 

MDX would charge Customers a 

‘‘direct connect fee’’ of $3,500 per 

connection per month. MDX would also 

charge Customers a ‘‘per user fee’’ of $25 

per month per ‘‘Authorized User’’ or 

‘‘Device’’ for receipt of the BBO Data 

Feed by Subscribers. An ‘‘Authorized 

User’’ is defined as an individual user 

(an individual human being) who is 

uniquely identified (by user ID and 

confidential password or other 

unambiguous method reasonably 

acceptable to MDX) and authorized by 

a Customer to access the BBO Data Feed 

supplied by the Customer. A ‘‘Device’’ is 

defined as any computer, workstation or 

other item of equipment, fixed or 

portable, that receives, accesses and/or 

displays data in visual, audible or other 

form. Either a CBOE Trading Permit 

Holder or a non-CBOE Trading Permit 

Holder may be a Customer. All 

Customers would be assessed the same 

fees. 

The proposed fees would be 

implemented on March 1, 2011. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the requirements of Section 6(b) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 5 in general, and, in particular, 

with Section 6(b)(4) of the Act 6 in that 

it provides for the equitable allocation 

of reasonable dues, fees and other 

charges among CBOE Trading Permit 


srobinson on DSKHWCL6B1PROD with NOTICES