Document ID: SEC-2010-1870-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2010-12-09T05:00Z

[Federal Register Volume 75, Number 236 (Thursday, December 9, 2010)]
[Notices]
[Pages 76770-76771]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-30941]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63422; File No. SR-CBOE-2010-105]

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

December 3, 2010.
    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 November 30, 
2010, 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 and 
II 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 extend through 
March 31, 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, 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, Proposed Rule Change

1. Purpose
    Effective September 7, 2010, the Exchange waived the $.18 per 
contract transaction fee for public customer (``C'' origin code) orders 
in options on Standard & Poor's Depositary Receipts (``SPDR options'') 
that are executed in open outcry or in the Automated Improvement 
Mechanism (``AIM'').\1\ This fee waiver is due to expire on November 
30, 2010. The Exchange proposes to extend the fee waiver through March 
31, 2011.\2\ The proposed fee waiver is intended to attract more 
customer volume on the Exchange in this product.
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    \1\ See Securities Exchange Act Release No. 34-62902 (September 
14, 2010), 75 FR 57313 (September 20, 2010), 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.
    \2\ The Exchange notes that transaction fees are also currently 
waived for customer orders of 99 contracts or less in ETF (including 
SPDR 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 
Section

[[Page 76771]]

6(b) of the Securities Exchange Act of 1934 (``Act''),\3\ in general, 
and furthers the objectives of Section 6(b)(4) \4\ of the Act in 
particular, in that it is designed to provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and other persons using its facilities. 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 SPDR options and is consistent with other fees 
assessed by the Exchange. 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), 
and a different rate ($.20 per contract) for broker-dealer orders 
executed on AIM as compared to other electronic executions and manual 
executions of broker-dealer orders.\5\ Other exchange fee schedules 
also distinguish between electronically and non-electronically executed 
orders.\6\ The Exchange believes the proposed fee waiver is equitable 
because it would apply uniformly to all public customers trading SPDR 
options.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(4).
    \5\ See CBOE Fees Schedule, Section 1.
    \6\ 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 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 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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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 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-2010-105 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.

All submissions should refer to File Number SR-CBOE-2010-105. 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 website (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 website 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 Number SR-CBOE-2010-105 and should be submitted on 
or before December 30, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-30941 Filed 12-8-10; 8:45 am]
BILLING CODE 8011-01-P