Document ID: SEC-2011-0976-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2011-07-12T04:00Z

[Federal Register Volume 76, Number 133 (Tuesday, July 12, 2011)]
[Notices]
[Pages 40948-40950]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-17425]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64817; File No. SR-CBOE-2011-059]

Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to an Extension of the Waiver of the Transaction 
Fee for Public Customer Orders in SPY Options Executed in Open Outcry 
or in the Automated Improvement Mechanism

 July 6, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\

[[Page 40949]]

notice is hereby given that on June 29, 2011, the Chicago Board Options 
Exchange, Incorporated (the ``Exchange'' or ``CBOE'') 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 Exchange has designated this proposal as 
one establishing or changing a due, fee, or other charge imposed by 
CBOE under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) 
thereunder,\4\ which renders the proposal effective upon filing with 
the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its Fees Schedule to extend through 
September 30, 2011, a waiver of the transaction fee for public customer 
orders in options on Standard & Poor's Depositary Receipts that are 
executed in open outcry or in the Automated Improvement Mechanism. 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, 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 currently waives the $.18 per contract transaction fee 
for public customer (``C'' origin code) orders in options on Standard & 
Poor's Depositary Receipts (``SPY options'') that are executed in open 
outcry or in the Automated Improvement Mechanism (``AIM'').\5\ This fee 
waiver is due to expire on June 30, 2011. The Exchange proposes to 
extend the fee waiver through September 30, 2011.\6\ The proposed fee 
waiver is intended to attract more customer volume on the Exchange in 
this product.
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    \5\ See Securities Exchange Act Release No. 34-62902 (September 
14, 2010), 75 FR 57313 (September 20, 2010), Securities Exchange Act 
Release No. 34-63422 (December 3, 2010), 75 FR 76770 (December 9, 
2010), Securities Exchange Act Release No. 34-64197 (April 6, 2011), 
76 FR 20390 (April 12, 2011) and CBOE Fees Schedule, footnote 8. AIM 
is an electronic auction system that exposes certain orders 
electronically in an auction to provide such orders with the 
opportunity to receive an execution at an improved price. AIM is 
governed by CBOE Rule 6.74A.
    \6\ The Exchange notes that transaction fees are also currently 
waived for customer orders of 99 contracts or less in ETF (including 
SPY options), ETN and HOLDRs options. See CBOE Fees Schedule, 
footnote 9.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act,\7\ in general, and furthers the objectives of Section 6(b)(4) 
\8\ 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 Trading Permit Holders and other persons using its facilities. The 
Exchange believes the proposed extension of the fee waiver is equitable 
because the fee waiver would apply uniformly to all public customers 
trading SPY options. The Exchange believes the proposed extension of 
the fee waiver is reasonable because it would continue to provide cost 
savings during the extended waiver period for public customers trading 
SPY options. Further, the Exchange believes the proposed fee waiver is 
consistent with other fees assessed [sic] by the Exchange. 
Specifically, the Exchange assesses manually executed broker-dealer 
orders a different rate ($.25 per contract) as compared to 
electronically executed broker-dealer orders ($.45 per contract).\9\ 
Other exchange fee schedules also distinguish between electronically 
and non-electronically executed orders.\10\
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
    \9\ See CBOE Fees Schedule, Section 1.
    \10\ NASDAQ OMX PHLX, Inc. categorizes its equity options 
transaction fees for Specialists, ROTs, SQTs, RSQTs and Broker-
Dealers as either electronic or non-electronic. See NASDAQ OMX PHLX 
Fees Schedule, Equity Options Fees. NYSE Amex, Inc. categorizes its 
options transaction fees for Non-NYSE Amex Options Market Makers, 
Broker-Dealers, Professional Customers, Non BD Customers and Firms 
as either electronic or manual. See NYSE Amex Options Fees Schedule, 
Trade Related Charges. NYSE Arca, Inc. categorizes its options 
transaction fees for Customers, Firms and Broker-Dealers as either 
electronic or manual. See NYSE Arca Options Fees Schedule, Trade 
Related Charges.
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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 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) 
of the Act \11\ and subparagraph (f)(2) of Rule 19b-4 \12\ 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.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(2).
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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 rule-comments@sec.gov. Please include 
File Number SR-CBOE-2011-059 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-2011-059. This file 
number should be included on the subject line if e-mail is used. To 
help the

[[Page 40950]]

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 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-2011-059 and should be submitted on or before August 2, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-17425 Filed 7-11-11; 8:45 am]
BILLING CODE 8011-01-P