Federal Register / Vol. 75, No. 209 / Friday, October 29, 2010 / Notices 66813 

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

2 17 CFR 240.19b–4. 

3The Exchange also notes that a $0.00 rebate for 

public customers is not unprecedented (See 

International Securities Exchange, Inc. Fee 

schedule). 

4C2 notes that CBOE also adds its ‘‘applicable 

transaction fee amount’’ to its routing fee (See CBOE 

Fees Schedule). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63175; File No. SR–C2– 

2010–006] 

Self-Regulatory Organizations; C2 

Options Exchange, Incorporated; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend the C2 Fees 

Schedule 

October 25, 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 October 

22, 2010, C2 Options Exchange, 

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

filed with the Securities and Exchange 

Commission (the ‘‘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 

C2 proposes to amend its Fees 

Schedule. 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, 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. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

C2 proposes to amend its Fees 

Schedule in preparation for the 

Exchange’s expected launch on October 

29, 2010. In connection with the 

commencement of trading, C2 proposes 

to add a number of fees relating to 

activities on the Exchange. Most of the 

proposed fees are identical to fees in 

place at the Chicago Board Options 

Exchange, Incorporated (‘‘CBOE’’). 

Regarding transactions, C2 proposes 

to impose per contract taker fees and 

maker rebates. The amounts of the fees/ 

rebates are based on order origin code. 

More specifically, the fee for taking 

liquidity will be $0.25 per contract for 

C2 Market-Makers, $0.15 for public 

customer orders, and $0.40 for all other 

users (including Professional 

Customers). The maker rebate will be 

$0.15 per contract for C2 MarketMakers, $0.00 for public customers, and 

$0.10 for all other users. The Exchange 

believes that it is appropriate and not 

unfairly discriminatory to set a higher 

rebate level for C2 Market-Makers than 

other participants in light of the 

commitments C2 Market-Makers 

undertake for market quality and 

liquidity. Further, C2 notes that while 

public customers do not receive a maker 

rebate, they are assessed a significantly 

lower taker charge than other user 

types.3 These fees will apply to all 

multiply-listed, non-proprietary, penny 

pilot equity and ETF options classes. 

Separate fees may be established, 

pursuant to a rule filing with the 

Commission, for other classes 

eventually traded on C2. Initially, there 

will be no fees or rebates for any users 

for trades that occur as part of the 

opening process. 

The Exchange also proposes to 

impose a Linkage Routing Fee of $0.50 

per routed contract in addition to the 

applicable taker fee rate. The $0.50 

portion of the Routing Fee offsets costs 

incurred by the Exchange in connection 

with using an unaffiliated broker-dealer 

to access other exchanges and with 

transaction charges assessed by other 

exchanges. The applicable C2 taker fee 

rate component of the Routing Fee 

accounts for the C2 ‘‘execution’’ that 

occurs as part of the linkage process 

whereby an away execution obtained by 

C2’s routing broker is put to the 

underlying C2 customer on C2 (we note 

that there is no second print in 

connection with this process). C2 

further notes that users can route 

directly to exchanges posting the best 

market if desired (or to specify that C2 

not route orders away on their behalf) 

and that this routing function is an 

‘‘extra’’ service provided by C2 to its 

Permit Holders.4

C2 proposes to impose access fees for 

the two types of access permits initially 

available for use on C2. The proposed 

permit fees would only be applicable for 

access to non-proprietary classes (if 

proprietary classes are added at a later 

date, access fees for such classes would 

be filed with the Commission). C2 will 

not assess these fees for the month of 

October 2010. The cost will be $5,000 

per month for a Market-Maker Permit. 

This permit gives the holder the ability 

to stream quotes and submit orders into 

the C2 trade engine. This permit also 

provides an appointment credit of 1.0, 

a quoting and order entry bandwidth 

allowance, up to three logins and 

Trading Permit Holder status. The 

quoting bandwidth allowance for a 

Market-Maker Permit is equivalent to a 

maximum of 156,000,000 quotes over 

the course of a trading day. The 

Electronic Access Permit, with a cost of 

$1,000 per month, gives the holder the 

ability to submit agency and qualifying 

proprietary orders into the C2 trade 

engine (but not stream quotes) as well 

as an order entry bandwidth allowance, 

up to three logins and Trading Permit 

Holder status. The higher cost of the 

Market-Maker Permit is equitable in that 

it reflects the ability to continuously 

stream quotations. 

C2 will offer two kinds of bandwidth 

packets for use to supplement the 

standard bandwidth allocation 

contained in each access permit. The 

Quoting and Order Entry Bandwidth 

Packet (available to Market-Makers) 

provides bandwidth equivalent to 1/5th 

of a C2 Market-Maker Permit. The Order 

Entry Bandwidth Packet (available to 

Electronic Access Permit holders) 

provides bandwidth equivalent to one 

C2 Electronic Access Permit. C2 

proposes a fee of $1,000 per month for 

each supplemental bandwidth packet. 

The Exchange also proposes to 

impose Sponsored User fees. The onetime Registration Fee of $2,500 will be 

payable by a Trading Permit Holder for 

the registration of each of its Sponsored 

users. This fee is identical to the CBOE 

sponsored user fee, and offsets the cost 

of processing and registering Sponsored 

User applications. A Sponsored User is 

a person or entity that has entered into 

a sponsorship arrangement for purposes 

of receiving access to the Exchange 

system. The Sponsored User Program is 

governed by C2 Rule 3.15. 

The Exchange proposes to assess the 

Sales Value Fee to each Trading Permit 

WReier-Aviles on DSKGBLS3C1PROD with NOTICES

66814 Federal Register / Vol. 75, No. 209 / Friday, October 29, 2010 / Notices 

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

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

7 15 U.S.C. 78s(b)(3)(A)(ii). 

8 17 CFR 240.19b–4(f)(2). 

Holder for sales of securities on C2 with 

respect to which C2 is obligated to pay 

a fee to the SEC under Section 31 of the 

Exchange Act. To the extent there may 

be any excess monies collected for the 

Sales Value Fee, C2 may retain those 

monies to help fund its general 

operating expenses. The Sales Value Fee 

is collected indirectly from Trading 

Permit Holders through their clearing 

firms by OCC on behalf of C2 with 

respect to options sales and options 

exercises. The amount of the Sales 

Value Fee for options sales and options 

exercises is equal to (i) the Section 31 

fee rate multiplied by (ii) the Trading 

Permit Holder’s aggregate dollar amount 

of covered sales resulting from options 

transactions occurring on the Exchange 

during any computational period. This 

fee is identical to the Sales Value Fee in 

place at CBOE. 

The Exchange proposes to impose a 

number of regulatory fees. The Firm 

Designated Examining Authority Fee of 

$0.40 per $1,000 of gross revenue (as 

reported on the quarterly FOCUS 

Report, Form X–17A–5) excludes 

commodity commission revenue. This 

fee is also subject to a monthly 

minimum fee of $1,000 for clearing 

firms and $275 for non-clearing firms. 

This fee is identical to a related fee on 

CBOE. 

The Exchange proposes a number of 

fees to be collected and retained by 

FINRA via the Web CRD SM registration 

system for the registration of associated 

persons of Exchange Trading Permit 

Holders that are not also FINRA 

members. The FINRA Non-Member 

Processing Fee ($85.00) is for all Initial, 

Transfer, Relicense, and Dual 

Registration Form U–4 filings. This fee 

will also be generated upon refiling to 

Web CRD SM of C2-only registered 

individuals. The FINRA Disclosure 

Processing Fee (U–4, U–5, and 

amendments) ($95.00) is for all 

registration, transfer, or termination 

filings with new or amended disclosure 

information or that require certification 

as well as any amendment to disclosure 

information. The FINRA Annual System 

Processing Fee ($30.00) will be assessed 

only during renewals. There will also be 

fingerprint processing fees of $30.25 per 

card (initial submission), $13.00 per 

card (second submission), $30.25 per 

card (third submission) and $13.00 per 

card submitted by Trading Permit 

Holders on behalf of their associated 

person who have had their prints 

processed through a SRO other than 

FINRA. These fees are identical to fees 

in place at CBOE. 

The Exchange proposes to assess a 

number of Communication Review Fees. 

For printed material reviewed, the 

proposed fee would be $150 per 

submission for regular review and 

$1,000 for expedited review, with a $25 

per page surcharge for each page 

reviewed in excess of five pages ($50 

per page for expedited review). For 

video and audio media reviewed, the 

proposed fee would be $150 per 

submission for regular review and 

$1,000 for expedited review, with a $25 

per minute surcharge for each minute of 

tape reviewed in excess of five minutes 

($50 per minute for expedited review). 

Expedited review will be completed 

within five business days, not including 

the date the item is received by the 

Exchange, unless a shorter or longer 

period is agreed to by the Exchange. The 

Exchange may, in its sole discretion, 

refuse requests for expedited review. 

These fees are identical to fees in place 

at CBOE. 

C2 proposes a Continuing Education 

Fee of $100 per session assessed as to 

each individual who is required to 

complete the Regulatory Element of the 

Continuing Education Requirements 

pursuant to Rule 9.3A. For Ad Hoc 

Information Services Requests, the 

Exchange will assess a fee equal to the 

costs of production of such information. 

The Exchange also proposes 

Connectivity Fees of $40.00 per month 

for each of a network access port charge, 

a CMI Client application server, and a 

FIX port, with the charge going up to 

$80.00 per month for Sponsored Users. 

The Exchange believes it is equitable 

and reasonable to charge higher 

connectivity fees to Sponsored Users 

than it charges to Permit Holders 

because Permit Holders are subject to 

dues and other fees through their 

membership to help offset the 

Exchange’s systems expenses. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the Act,5

in general, and furthers the objectives of 

Section 6(b)(4) 6 of the Act in particular, 

in that it is designed to provide for the 

equitable allocation of reasonable dues, 

fees, and other charges among C2 

Trading Permit Holders and other 

persons using Exchange facilities. 

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 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 

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) 7 of the Act and 

subparagraph (f)(2) of Rule 19b–4 8

thereunder. 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. 

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–C2–2010–006 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–C2–2010–006. 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 

WReier-Aviles on DSKGBLS3C1PROD with NOTICES

Federal Register / Vol. 75, No. 209 / Friday, October 29, 2010 / Notices 66815 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Commission has previously approved 

listing and trading of ICUs based on certain fixed 

income indexes. See, e.g., Securities Exchange Act 

Release No. 48662 (October 20, 2003), 68 FR 61535 

(October 28, 2003) (SR–PCX–2003–41) (approving 

listing and trading pursuant to unlisted trading 

privileges (‘‘UTP’’) of fixed income funds and the 

UTP trading of certain iShares® fixed income 

funds). In addition, the Commission has approved 

NYSE Arca generic listing rules for Investment 

Company Units based on a fixed income index in 

Securities Exchange Act Release No. 55783 (May 

17, 2007), 72 FR 29194 (May 24, 2007) (SR– 

NYSEArca–2007–36). The Commission has 

approved pursuant to Section 19(b)(2) of the 

Exchange Act the listing on the American Stock 

Exchange of exchange traded funds based on fixed 

income indexes. See, e.g., Securities Exchange Act 

Release No. 48534 (September 24, 2003), 68 FR 

56353 (September 30, 2003) (SR–Amex–2003–75) 

(order approving listing on Amex of eight series of 

iShares Lehman Bond Funds). In addition, the 

Commission recently has approved for listing on 

NYSE Arca under NYSE Arca Equities Rule 8.600 

(‘‘Managed Fund Shares’’) two actively managed 

ETFs of the PIMCO ETF Trust that hold municipal 

bonds. See Securities Exchange Act Release No. 

60981 (August 27 [sic], 2009) (SR–NYSEArca– 

2009–79) (order approving [sic] PIMCO Short-Term 

Municipal Bond Strategy Fund and PIMCO 

Intermediate Municipal Bond Strategy Fund, among 

others). 

4See Registration Statement on Form N–1A for 

the Trust filed with the Securities and Exchange 

Commission on September 30, 2010 (File Nos. 333– 

92935 and 811–09729) (the ‘‘Registration 

Statement’’). The descriptions of the Fund and the 

Shares contained herein are based on information 

in the Registration Statement. 

5Commentary .02(a)(2) to NYSE Arca Equities 

Rule 5.2(j)(3) provides components of an index or 

portfolio underlying a series of ICUs that in the 

aggregate account for at least 75% of the weight of 

the index or portfolio each must have a minimum 

original principal amount outstanding of $100 

million or more. 

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–C2– 

2010–006 and should be submitted on 

or before November 19, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–27360 Filed 10–28–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63176; File No. SR– 

NYSEArca–2010–94] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to the Listing of 

the iShares® Taxable Municipal Bond 

Fund 

October 25, 2010. 

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

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that, 

on October 21, 2010, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ or ‘‘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 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 

The Exchange proposes to list and 

trade under NYSE Arca Equities Rule 

5.2(j)(3), Commentary .02, the following 

series of the iShares® Trust: iShares®

Taxable Municipal Bond Fund. The text 

of the proposed rule change is available 

at the Exchange, the Commission’s 

Public Reference Room, and the 

Exchange’s Web site at http:// 

www.nyse.com. 

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. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to list and 

trade shares (‘‘Shares’’) of the following 

series of the iShares® Trust (‘‘Trust’’) 

under NYSE Arca Equities Rule 5.2(j)(3), 

Commentary .02, which governs the 

listing and trading of Investment 

Company Units (‘‘ICUs’’): iShares®

Taxable Municipal Bond Fund 

(‘‘Fund’’).3

The Trust is registered with the 

Commission as an investment company 

under the Investment Company Act of 

1940 (‘‘1940 Act’’) (15 U.S.C. 80a).4

Blackrock Fund Advisors serves as the 

investment adviser (‘‘Adviser’’) to the 

Fund. 

Description of the Shares and the Fund 

According to the Registration 

Statement, the Fund seeks investment 

results that correspond generally to the 

price and yield performance, before fees 

and expenses, of The BofA Merrill 

Lynch Broad U.S. Taxable Municipal 

Securities Index (the ‘‘Underlying 

Index’’). 

The Underlying Index measures the 

performance of investment-grade 

taxable debt securities of the U.S. 

municipal bond market. As of October 

1, 2010, there were 1,779 issues in the 

Underlying Index. 

The Underlying Index includes fixedrate municipal bonds issued publicly in 

the U.S. market by U.S. States and 

territories and their political 

subdivisions. The interest payments on 

the bonds in the Underlying Index are 

generally subject to U.S. Federal income 

taxes. Each bond must have an 

investment grade rating based on the 

average rating by Moody’s Investors 

Service, Inc. (‘‘Moody’s’’), Standard & 

Poor’s Financial Services LLC (a 

subsidiary of The McGraw-Hill 

Companies, Inc.) (‘‘S&P’’), and Fitch, Inc. 

(‘‘Fitch’’). Each bond must be 

denominated in U.S. dollars. 

The Exchange is submitting this 

proposed rule change because the 

Underlying Index for the Fund does not 

meet all of the ‘‘generic’’ listing 

requirements of Commentary .02(a) to 

NYSE Arca Equities Rule 5.2(j)(3) 

applicable to listing of ICUs based on 

fixed income indexes. The Underlying 

Index meets all such requirements 

except for those set forth in 

Commentary .02(a)(2).5 Specifically, as 

of October 1, 2010, 70.85% of the 

weight of the Underlying Index 

WReier-Aviles on DSKGBLS3C1PROD with NOTICES