Document ID: SEC-2010-0849-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Incorporated
Posted Date: 2010-06-11T04:00Z

[Federal Register: June 11, 2010 (Volume 75, Number 112)]
[Notices]               
[Page 33374-33375]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11jn10-126]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62227; File No. SR-CBOE-2010-050]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Amend the Fees Schedule

June 4, 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 May 21, 2010, the Chicago Board Options Exchange, Incorporated 
(``Exchange'' or ``CBOE'') filed with the Securities and Exchange 
Commission (the ``Commission'') the proposed rule change as described 
in Items I, II, and III 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\ 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 establish fees 
for transactions in all S&P 500 Dividend Index options, regardless of 
the specified accrual period. The text of the proposed rule change is 
available on the Exchange's Web site (http://www.cboe.org/Legal), on 
the Commission's Web site at http://www.sec.gov, 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange previously received approval to list options on the 
S&P 500 Dividend Index, which represents the accumulated ex-dividend 
amounts of all S&P 500 Index component securities over a specified 
accrual period (e.g., quarterly, semi-annually, annually), and recently 
approval to list options on the S&P 500 Annual Dividend Index with an 
applied scaling factor of 1.\5\ The Exchange currently lists S&P 500 
Dividend Index (``DVS'') options with a specified quarterly accrual 
period and will begin listing options on the S&P 500 Annual Dividend 
Index on May 25, 2010.
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    \5\ See Securities Exchange Act Release Nos. 61136 (December 10, 
2009), 74 FR 66711 (December 16, 2009) (SR-CBOE-2009-022) and 62023 
(May 3, 2010), 75 FR 25899 (May 10, 2010) (SR-CBOE-2010-039).
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    The purposes [sic] of this filing is to amend the CBOE Fees 
Schedule to extend the existing fees for transactions in DVS options to 
all options on the S&P 500 Dividend Index, regardless of the specified 
accrual period.\6\ Currently the established transaction fees for DVS 
options are as follows:
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    \6\ See Securities Exchange Act Release No. 61295 (January 6, 
2010), 75 FR 2166 (January 14, 2010) (SR-CBOE-2009-098) (filing 
establishing transaction fees for DVS options).
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     $0.20 per contract for Market-Maker and Designated Primary 
Market-Maker transactions;\7\
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    \7\ This is the standard rate that is subject to the Liquidity 
Provider Sliding Scale as set forth in Footnote 10 to the Fees 
Schedule.
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     $0.20 per contract for member firm proprietary 
transactions;
     $0.40 per contract for manually executed broker-dealer 
transactions;
     $0.40 per contract for electronically executed broker-
dealer transactions;
     $0.40 per contract for voluntary professional 
transactions;
     $0.40 per contract for professional transactions;
     $0.40 per contract for customer transactions; and
     $0.10 per contract CFLEX surcharge fee.
    The Exchange also assesses a $.10 per contract surcharge fee on all 
non-public customer transactions in DVS options to help the Exchange 
recoup license fees the Exchange pays to the reporting authority. 
Further, the Exchange's Liquidity Provider Sliding Scale applies to 
transaction fees in DVS options, but the Exchange's marketing fee \8\ 
does not apply.
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    \8\ See Footnote 6 of the Fees Schedule.
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    To affect the current proposal, the Exchange proposes to replace 
all references to ``DVS'' in the CBOE Fees Schedule with a reference to 
``S&P 500 Dividend Index.'' The transaction fees for options on the 
``S&P 500 Dividend Index'' will apply to all options on the S&P 500 
Dividend Index regardless of the specified accrual period (e.g., 
quarterly, semi-annually, annually).
    The Exchange believes the rule change will further the Exchange's 
goal of introducing new products to the marketplace that are 
competitively priced.\9\ Also, the Exchange states that the surcharge 
fee on all non-public customer transactions in options on the S&P 500 
Dividend Index is to help the

[[Page 33375]]

Exchange recoup license fees the Exchange pays to Standard & Poor's 
Financial Services LLC to list options on the S&P 500 Dividend Index.
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    \9\ Linkage order fees are inapplicable for options on CBOE's 
proprietary products.
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\10\ in general, and furthers the objectives of Section 6(b)(4) 
\11\ 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 [sic] will further the Exchange's goal of 
introducing new products to the marketplace that are competitively 
priced and will help the Exchange recoup license fees that the Exchange 
pays to the reporting authority.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
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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

    The Exchange neither solicited nor received comments on the 
proposal.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change establishes or changes a 
due, fee, or other charge imposed by the Exchange, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \12\ and 
subparagraph (f)(2) of Rule 19b-4 \13\ 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.
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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-2010-050 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-2010-050. 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 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-CBOE-2010-050 and should be 
submitted on or before July 2, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-14054 Filed 6-10-10; 8:45 am]
BILLING CODE 8011-01-P