Federal Register / Vol. 76, No. 153 / Tuesday, August 9, 2011 / Notices 48933 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(2). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Options classes subject to maker/taker fees are 

identified by their ticker symbol on the Exchange’s 

Schedule of Fees. See Securities Exchange Act 

Release Nos. 61869 (April 7, 2010), 75 FR 19449 

(April 14, 2010) (SR–ISE–2010–25), 62048 (May 6, 

2010), 75 FR 26830 (May 12, 2010) (SR–ISE–2010– 

43), 62282 (June 11, 2010), 75 FR 34499 (June 17, 

2010) (SR–ISE–2010–54), 62319 (June 17, 2010), 75 

FR 36134 (June 24, 2010) (SR–ISE–2010–57), 62508 

(July 15, 2010), 75 FR 42809 (July 22, 2010) (SR– 

ISE–2010–65), 62507 (July 15, 2010), 75 FR 42802 

(July 22, 2010) (SR–ISE–2010–68), 62665 (August 9, 

2010), 75 FR 50015 (August 16, 2010) (SR–ISE– 

2010–82), 62805 (August 31, 2010), 75 FR 54682 

(September 8, 2010) (SR–ISE–2010–90), 63283 

(November 9, 2010), 75 FR 70059 (November 16, 

2010) (SR–ISE–2010–106), 63534 (December 13, 

2010), 75 FR 79433 (December 20, 2010) (SR–ISE– 

2010–114); 63664 (January 6, 2011), 76 FR 2170 

(January 12, 2011) (SR–ISE–2010–120); and 64303 

(April 15, 2011), 76 FR 22425 (April 21, 2011) (SR– 

ISE–2011–18). 

4Market Makers who remove liquidity in the 

Select Symbols from the Complex Order Book by 

trading with orders preferenced to them are charged 

$0.28 per contract. 

5A Market Maker Plus is a market maker who is 

on the National Best Bid or National Best Offer 80% 

of the time for series trading between $0.03 and 

$5.00 (for options whose underlying stock’s 

previous trading day’s last sale price was less than 

or equal to $100) and between $0.10 and $5.00 (for 

options whose underlying stock’s previous trading 

day’s last sale price was greater than $100) in 

Continued 

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 8 and subparagraph (f)(2) of 

Rule 19b–4 9 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–CBOE–2011–073 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–2011–073. 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 No. 

SR–CBOE–2011–073 and should be 

submitted on or before August 30, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–20066 Filed 8–8–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–65021; File No. SR–ISE– 

2011–45] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to Fees for Complex 

Orders 

August 3, 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 August 1, 

2011, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or 

‘‘ISE’’) filed with the Securities and 

Exchange 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 ISE is proposing to amend fees 

for certain complex orders executed on 

the Exchange. The text of the proposed 

rule change is available on the 

Exchange’s Web site (http:// 

www.ise.com), at the principal office of 

the Exchange, 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 these statements may be examined at 

the places specified in Item IV below. 

The self-regulatory organization 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 currently assesses per 

contract transaction charges and credits 

to market participants that add or 

remove liquidity from the Exchange 

(‘‘maker/taker fees’’) in a number of 

options classes (the ‘‘Select Symbols’’).3

For complex orders in the Select 

Symbols, the Exchange currently 

charges a ‘‘take’’ fee of: (i) $0.30 per 

contract for Market Maker,4 Market 

Maker Plus,5 Firm Proprietary and 


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48934 Federal Register / Vol. 76, No. 153 / Tuesday, August 9, 2011 / Notices 

premium in each of the front two expiration months 

and 80% of the time for series trading between 

$0.03 and $5.00 (for options whose underlying 

stock’s previous trading day’s last sale price was 

less than or equal to $100) and between $0.10 and 

$5.00 (for options whose underlying stock’s 

previous trading day’s last sale price was greater 

than $100) in premium across all expiration months 

in order to receive the rebate. The Exchange 

determines whether a market maker qualifies as a 

Market Maker Plus at the end of each month by 

looking back at each market maker’s quoting 

statistics during that month. If at the end of the 

month, a market maker meets the Exchange’s stated 

criteria, the Exchange rebates $0.10 per contract for 

transactions executed by that market maker during 

that month. The Exchange provides market makers 

a report on a daily basis with quoting statistics so 

that market makers can determine whether or not 

they are meeting the Exchange’s stated criteria. 

6A Customer (Professional) is a person who is not 

a broker/dealer and is not a Priority Customer. 

7A Non-ISE Market Maker, or Far Away Market 

Maker (‘‘FARMM’’), is a market maker as defined 

in Section 3(a)(38) of the Securities Exchange Act 

of 1934, as amended (‘‘Exchange Act’’), registered 

in the same options class on another options 

exchange. 

8A Priority Customer is defined in ISE Rule 

100(a)(37A) as a person or entity that is not a 

broker/dealer in securities, and does not place more 

than 390 orders in listed options per day on average 

during a calendar month for its own beneficial 

account(s). 

9The Penny Pilot Program, which commenced on 

January 26, 2007, permits ISE and all of the other 

options exchanges to quote certain option classes in 

pennies. The current pilot is scheduled to expire on 

December 31, 2011. The following options classes 

are currently in the Penny Pilot Program: A, AA, 

AAPL, ABK, ABT, ABX, ACAS, ACI, ADBE, ADM, 

ADSK, AEM, AET, AFL, AGO, AIG, AKAM, AKS, 

ALL, AMAT, AMD, AMED, AMGN, AMLN, AMR, 

AMZN, ANF, ANR, APA, APC, APOL, APWR, 

ARNA, ATPG, ATVI, AUY, AXP, BA, BAC, BAX, 

BBBY, BBD, BBT, BBY, BCRX, BHI, BHP, BIDU, BK, 

BMY, BP, BPOP, BRCD, BRCM, BRKB, BSX, BTU, 

BUCY, BX, C, CAT, CB, CELG, CENX, CF, CHK, CI, 

CIEN, CIT, CL, CLF, CMA, CMCSA, CNX, COF, 

COP, COST, CREE, CRM, CSCO, CSX, CTIC, CVS, 

CVX, CX, DAL, DCTH, DD, DE, DELL, DHI, DIA, 

DIS, DNDN, DO, DOW, DRYS, DTV, DVN, EBAY, 

EEM, EFA, EK, EMC, ENER, EOG, EP, ERTS, ESI, 

ESRX, ETFC, EWJ, EWT, EWW, EWY, EWZ, F, FAS, 

FAZ, FCX, FDX, FFIV, FIS, FITB, FLEX, FNM, FRE, 

FSLR, FWLT, FXE, FXI, FXP, GDX, GE, GFI, GG, 

GGP, GILD, GIS, GLD, GLW, GM, GMCR, GME, 

GNW, GPS, GRMN, GS, HAL, HBAN, HBC, HD, 

HES, HGSI, HIG, HK, HL, HOG, HON, HOT, HPQ, 

HSY, IBM, IBN, INTC, IOC, IP, ITMN, IWM, IYR, 

JCP, JDSU, JNJ, JNPR, JOYG, JPM, JWN, KBH, KEY, 

KFT, KGC, KMP, KO, KRE, LCC, LDK, LEAP, LEN, 

LLY, LNC, LO, LOW, LVS, M, MA, MBI, MCD, 

MCO, MCP, MDT, MDVN, MEE, MET, MGM, MJN, 

MMM, MMR, MNKD, MNX, MO, MON, MOS, 

MRK, MRO, MRVL, MS, MSFT, MSI, MT, MTG, 

MU, MYL, NBR, NE, NEM, NFLX, NKE, NLY, NOK, 

NOV, NTAP, NUE, NVDA, NYX, OIH, ORCL, OXY, 

PARD, PBR, PCL, PCX, PEP, PFE, PG, PHM, PM, 

PNC, POT, PRU, PXP, QCOM, QID, QLD, QQQ, 

RCL, RF, RIG, RIMM, RMBS, RSH, RTN, RVBD, S, 

SBUX, SD, SDS, SEED, SHLD, SIRI, SKF, SLB, SLM, 

SLV, SLW, SMH, SNDK, SO, SPG, SPWRA, SPY, 

SQNM, SRS, SSO, STEC, STI, STP, STT, STX, SU, 

SUN, SVNT, SWN, SYMC, T, TBT, TCK, TEVA, 

TGT, TIF, TIVO, TLB, TLT, TM, TSL, TSO, TWX, 

TXN, TXT, TYC, TZA, UAL, UNG, UNH, UNP, 

UPS, URE, USB, USO, UTX, UUP, UYG, V, VALE, 

VLO, VRSN, VVUS, VXX, VZ, WAG, WDC, WFC, 

WFM, WFR, WFT, WHR, WIN, WLP, WLT, WMB, 

WMT, WYNN, X, XHB, XL, XLB, XLE, XLF, XLI, 

XLK, XLNX, XLP, XLU, XLV, XLY, XME, XOM, 

XOP, XRT, XRX, YHOO, YRCW, YUM and ZION 

(the ‘‘Penny Pilot Symbols’’). 

10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(4). 

Customer (Professional) 6 orders; and (ii) 

$0.35 per contract for Non-ISE Market 

Maker 7 orders. Priority Customer 8

orders are not charged a take fee for 

complex orders. For complex orders, the 

Exchange currently charges a ‘‘make’’ 

fee of: (i) $0.10 per contract for Market 

Maker, Market Maker Plus, Firm 

Proprietary and Customer (Professional) 

orders; and (ii) $0.20 per contract for 

Non-ISE Market Maker orders. Priority 

Customer orders are not charged a make 

fee for complex orders. 

Additionally, the Exchange provides a 

rebate of $0.25 per contract to Priority 

Customer complex orders that trade 

with non-customer orders in the 

Complex Order Book. 

The Exchange now proposes to extend 

the fees and credits for complex orders 

applicable to the Select Symbols to all 

symbols that are in the Penny Pilot 

Program.9 Thus, pursuant to this 

proposed rule change, for complex 

orders in the Penny Pilot Symbols, the 

Exchange will charge a ‘‘take’’ fee of: (i) 

$0.30 per contract for Market Maker, 

Market Maker Plus, Firm Proprietary 

and Customer (Professional) orders; and 

(ii) $0.35 per contract for Non-ISE 

Market Maker orders. Priority Customer 

orders will not be charged a take fee for 

complex orders. For complex orders in 

the Penny Pilot Symbols, the Exchange 

will charge a ‘‘make’’ fee of: (i) $0.10 per 

contract for Market Maker, Market 

Maker Plus, Firm Proprietary and 

Customer (Professional) orders; and (ii) 

$0.20 per contract for Non-ISE Market 

Maker orders. Priority Customer orders 

will not be charged a make fee for 

complex orders. 

Additionally, the Exchange currently 

provides a rebate of $0.25 per contract 

to Priority Customer complex orders 

that trade with non-customer orders in 

the Complex Order Book and proposes 

to extend this rebate to the Penny Pilot 

Symbols. Finally, the Exchange 

currently charges a Payment for Order 

Flow (PFOF) fee of $0.25 per contract 

for each customer order executed in the 

Penny Pilot Symbols, including 

complex orders. As part of this 

proposed rule change, the Exchange 

proposes not to charge a PFOF fee for 

customer complex orders transacted in 

the Penny Pilot Symbols. 

The Exchange has designated this 

proposal to be operative on August 1, 

2011. 

2. Statutory Basis 

The Exchange believes that its 

proposal to amend its Schedule of Fees 

is consistent with Section 6(b) of the 

Act 10 in general, and furthers the 

objectives of Section 6(b)(4) of the Act 11

in particular, in that it is an equitable 

allocation of reasonable dues, fees and 

other charges among Exchange members 

and other persons using its facilities. 

The impact of the proposal upon the net 

fees paid by a particular market 

participant will depend on a number of 

variables, most important of which will 

be its propensity to add or remove 

liquidity in options overlying the 

symbols that are subject to the 

Exchange’s maker/taker fees. 

The Exchange believes that its 

complex order fees and credits remain 

competitive with fees charged by other 

exchanges and therefore are reasonable 

and equitably allocated to those 

members that opt to direct orders to the 

Exchange rather than to a competing 

exchange. The Exchange believes that 

its proposal to extend its complex order 

pricing to all Penny Pilot Symbols is 

reasonable because doing so will attract 

additional order flow to the Exchange. 

The complex order pricing employed by 

the Exchange for the Select Symbols has 

proven to be an effective pricing 

mechanism and attractive to Exchange 

participants and their customers. The 

Exchange believes extending that 

pricing structure will attract additional 

complex order business while at the 

same time creating standardization in 

complex order pricing across symbols 

that make up the majority of daily 

volume in options trading. The 

Exchange further believes that the 

amounts of the proposed fees are 

reasonable because they are identical to 

fees assessed by the Exchange for 

execution of complex orders in the 

Select Symbols. 

The Exchange believes it is reasonable 

to eliminate the PFOF fee for customer 

complex orders in the Penny Pilot 

Symbols because the Exchange does not 

charge a PFOF fee for symbols that are 

subject to the Exchange’s maker/taker 

pricing, i.e., the Select Symbols. PFOF 

fees are pricing incentives offered by 

exchanges to attract order flow. Since 

the Exchange is proposing to adopt 

maker/taker pricing for complex orders, 

which provides incentives to attract 

order flow in the form of rebates, the 

Exchanges does not have a need to 

charge PFOF fees for these orders. 

The Exchange also believes that 

extending the maker/taker pricing to 

complex orders in the Penny Pilot 

Symbols is reasonable and equitable 

because the Exchange is not changing its 

maker/taker pricing structure; it is 

merely extending it to additional 

symbols, i.e., Penny Pilot Symbols. The 

Exchange also believes that eliminating 


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Federal Register / Vol. 76, No. 153 / Tuesday, August 9, 2011 / Notices 48935 

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

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

the PFOF fee for complex orders in the 

Penny Pilot Symbols is reasonable and 

equitable because it will benefit 

customers. The Exchange further 

believes that the Exchange’s maker/taker 

fees are not unfairly discriminatory 

because the fee structure is consistent 

with fee structures that exist today at 

other options exchanges. 

Finally, the Exchange believes that 

the proposed fees are fair, equitable and 

not unfairly discriminatory because the 

proposed fees are consistent with price 

differentiation that exists today at other 

option exchanges. Additionally, the 

Exchange believes it remains an 

attractive venue for market participants 

to trade complex orders despite its 

proposed fee change as its fees remain 

competitive with those charged by other 

exchanges for similar trading strategies. 

The Exchange operates in a highly 

competitive market in which market 

participants can readily direct order 

flow to another exchange if they deem 

fee levels at a particular exchange to be 

excessive. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

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 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

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)(ii) of the Act.12 At any time 

within 60 days of the filing of such 

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. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or disapproved. 

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–ISE–2011–45 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–ISE–2011–45. 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 filings 

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 No. SR–ISE–2011– 

45 and should be submitted on or before 

August 30, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–20099 Filed 8–8–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–65031; File No. SR–CBOE– 

2011–040] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Proposed Rule 

to Simplify the $1 Strike Price Interval 

Program 

August 4, 2011. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on July 26, 

2011, the Chicago Board Options 

Exchange, Incorporated (‘‘Exchange’’ or 

‘‘CBOE’’) filed with the Securities and 

Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

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 Substance of 

the Proposed Rule Change 

CBOE proposes to amend its rules in 

order to simplify the $1 Strike Price 

Interval Program. The text of the rule 

proposal 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, 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. 


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