22790 Federal Register / Vol. 74, No. 92 / Thursday, May 14, 2009 / Notices 

1Customer complex orders in QQQQ options that 

take liquidity from the complex order book are 

assessed $.18 per contract. See CBOE Fees 

Schedule, Section 1 and Footnote 12. 

2The Exchange notes that the transaction fee 

waiver is based on the size of the order that is 

entered and not on the number of contracts that are 

executed, i.e., the fee waiver would apply only if 

the size of the order entered is 99 contracts or less. 

For example, if a member enters an order for 200 

contracts in an ETF option and only 50 contracts 

are executed, the Exchange would charge the 

member the standard ETF option customer 

transaction fee ($.18/contract) for the 50 contracts 

that were executed. The fee waiver would not apply 

in that case. If, for example, a member enters an 

order for 90 contracts in an ETF option and all or 

a portion of the order is executed, the member 

would not be charged any transaction fee. See email 

from Jaime Galvan, Assistant Secretary, CBOE, to 

Sara Hawkins, Special Counsel, Commission, dated 

May 6, 2009. 

3Member dues are $450 per month. See CBOE 

Fees Schedule, Section 10. 

4The ITP program is a program pursuant to which 

the Exchange has the authority to issue up to 50 

ITPs. The ITP program is governed by CBOE Rule 

3.27. The lessor compensation component of the 

ITP program is described in CBOE Rule 3.27(d). An 

‘‘open lease’’ is defined in Rule 3.27(d) as a 

transferable Exchange membership available for 

lease. 

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

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

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59892; File No. SR–CBOE– 

2009–027] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to Fee Changes 

May 8, 2009. 

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

Securities Exchange Act of 1934, 15 

U.S.C. 78s(b)(1), notice is hereby given 

that on April 30, 2009, 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 

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 

Chicago Board Options Exchange, 

Incorporated (‘‘CBOE’’ or ‘‘Exchange’’) 

proposes to amend its Fees Schedule to 

(i) waive the customer transaction fee 

for orders of a certain size in options on 

exchange-traded funds (‘‘ETFs’’) and 

Holding Company Depositary Receipts 

(‘‘HOLDRs’’), (ii) reduce the fee for use 

of a Floor Broker Workstation, and (iii) 

waive member dues for certain 

members. 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 proposes to institute 

the following fee changes effective May 

1, 2009: 

Waiver of Customer Transaction Fee in 

ETF and HOLDRs Options 

Customer orders in ETF and HOLDRs 

options are charged a transaction fee of 

$.18 per contract, except that only 

certain customer complex orders in 

QQQQ options are assessed a 

transaction fee.1 The Exchange proposes 

to waive the transaction fee on all 

customer orders of 99 contracts or less 

in ETF and HOLDRs options. The 

Exchange would charge any leg of a 

complex order in ETF and HOLDRs 

options that exceeds 99 contracts, even 

if the leg is only partially executed 

below the 99 contract threshold.2 For 

example, if a member enters a spread 

order in an ETF or HOLDRs option to 

buy 50 contracts and sell 100 contracts, 

and 90 contracts of the 100 contract leg 

are executed, the Exchange would 

charge the member $.18 per contract for 

the 90 contracts that were executed. 

Reduction of Floor Broker Workstation 

Fee 

The Floor Broker Workstation (FBW) 

is a system for electronically entering 

and electronically managing orders on 

the Exchange floor. The Exchange 

currently assesses a fee of $355 per 

month per login ID for use of an FBW. 

The Exchange proposes to reduce this 

fee to $200 per month per login ID. 

Waiver of Member Dues for Certain 

Members 

CBOE assesses dues with respect to 

every membership (unless a member is 

assessed the Hybrid Electronic Quoting 

Fee, in which case the member does not 

pay member dues).3 Under Rule 3.17(c), 

the membership lease agreement 

between a lessor member and a lessee 

member designates who is responsible 

for Exchange dues, fees and other 

charges. Typically, leases provide that 

the lessee is responsible for dues and 

therefore lessors do not pay dues. 

Under the lessor compensation 

component of the Interim Trading 

Permit (‘‘ITP’’) program, the Exchange 

compensates a lessor for an ‘‘open 

lease’’ while the ITP program is active 

and ITPs are outstanding.4 The goal of 

this component of the ITP program is to 

put such a lessor in a similar position 

to if the lessor’s membership was 

leased. This goal would be frustrated if 

the lessor is charged dues because the 

lessor would be subject to an obligation 

the lessor would not otherwise be 

subject to if the lessor’s membership 

was leased. 

Consistent with this goal, the 

Exchange proposes to waive member 

dues for a lessor member for any month 

in which the lessor receives a payment 

from the Exchange for an open lease 

under the ITP program. The Exchange 

would not waive member dues for any 

lessor with an open lease who has not 

notified the Exchange of the open lease 

or otherwise complied with Exchange 

Rule 3.27. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with Section 

6(b) of the Securities Exchange Act of 

1934 (‘‘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 CBOE members and other 

persons using its facilities. The 

Exchange believes the fee changes 

proposed by this filing are equitable and 

reasonable in that, with regard to the 

customer transaction fee waiver in ETF 

and HOLDRs options, the fee waiver 

would help the Exchange maintain its 

competitiveness for retail order flow in 

these products; with regard to the 

reduction in the FBW fee, the Exchange 

would be providing a cost savings to all 

users of FBWs; and with regard to the 


pwalker on PROD1PC71 with NOTICES
Federal Register / Vol. 74, No. 92 / Thursday, May 14, 2009 / Notices 22791 

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

8 17 CFR 240.19b–4(f)(2). 

9 17 CFR 200.30–3(a)(12). 

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). 

5The Exchange’s CYCLE strategy is the best 

execution routing strategy through which the 

Exchange routes to venues other than dark liquidity 

venues. The current fee schedule states that the 

charge applies to ‘‘orders routed to and executed at 

Continued 

waiver of member dues for certain lessor 

members with open leases, the waiver 

would help the Exchange place such a 

lessor in a similar position to if the 

lessor’s membership was leased, 

consistent with Exchange Rule 3.27(d). 

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 foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 7 and subparagraph (f)(2) of 

Rule 19b–4 8 thereunder. At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

may summarily abrogate 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–2009–027 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–2009–027. 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 inspection and copying 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 

Number SR–CBOE–2009–027 and 

should be submitted on or before June 

4, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–11232 Filed 5–13–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59889; File No. SR–BATS– 

2009–011] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Related to Fees for Use 

of BATS Exchange, Inc. 

May 7, 2009. 

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 May 1, 

2009, BATS Exchange, Inc. (‘‘BATS’’ 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. BATS has designated 

the proposed rule change as one 

establishing or changing a member due, 

fee, or other charge imposed by the 

Exchange under Section 19(b)(3)(A)(ii) 

of the Act 3 and Rule 19b–4(f)(2) 

thereunder,4 which renders the 

proposed rule change effective upon 

filing with the Commission. 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 modify its 

fee schedule applicable to use of the 

Exchange effective as of May 1, 2009. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at http://www.batstrading.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 

Exchange 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 

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 

Under the Exchange’s fee schedule 

effective May 1, 2009, the Exchange 

charges 0.25% of the total dollar value 

of the execution for any security priced 

under $1.00 per share that is routed 

away from the Exchange. The Exchange 

is filing this proposed rule change to 

clarify that this charge only applies to 

orders routed through its ‘‘CYCLE’’ 

strategy,5 and thus, does not apply to 


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