Document ID: SEC-2011-0975-0001
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 40965-40967]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-17381]

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SECURITIES AND EXCHANGE COMMISSION

Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated: Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to PULSe Fees

 July 6, 2011.
    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 July 1, 2011, the 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 
Exchange has designated

[[Page 40966]]

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 is proposing to amend its Fees Schedule to extend a 
fee waiver related to the PULSe workstation and to adopt a limited fee 
waiver for new users of the PULSe workstation. In addition, the 
Exchange is proposing to make a non-substantive numbering correction to 
the 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, 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
    The purpose of this proposed rule change is to extend a fee waiver 
related to the PULSe workstation and to adopt a limited fee waiver for 
new users of the PULSe workstation. In addition, the Exchange is 
proposing to make a non-substantive numbering correction to the Fees 
Schedule.
    By way of background, the PULSe workstation is a front-end order 
entry system designed for use with respect to orders that may be sent 
to the trading systems of CBOE and CBOE Stock Exchange, LLC (``CBSX''). 
In addition, the PULSe workstation provides a user with the capability 
to send options orders to other U.S. options exchanges and stock orders 
to other U.S. stock exchanges through a PULSe Routing Intermediary.\5\
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    \5\ For a more detailed description of the PULSe workstation and 
its other functionalities, see, e.g., Securities Exchange Act 
Release Nos. 62286 (June 11, 2010), 75 FR 34799 (June 18, 2010) (SR-
CBOE-2010-051) and 63721 (January 14, 2011), 76 FR 3929 (January 21, 
2011) (SR-CBOE-2011-001).
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    The first purpose of this proposed rule change is to extend the 
waiver of the PULSe Routing Intermediary fee. Currently the Exchange 
has waived the Routing Intermediary fee through June 30, 2011. The 
Exchange is proposing to extend this waiver through September 30, 2011. 
Thus this fee will be assessed beginning October 1, 2011.
    The second purpose of this proposed rule change is to adopt a 
limited waiver for new users of the PULSe workstation. The Exchange 
currently charges a fee of $350 per month for the first 10 users of a 
Trading Permit Holder (``TPH'') and $100 per month for all subsequent 
users. TPHs may also make the workstation available to their customers, 
which may include non-broker dealer public customers and non-TPH broker 
dealers (referred to herein as ``non-TPHs''). For such non-TPH 
workstations, the Exchange currently charges a fee of $350 per month 
per workstation.\6\ In addition, the Exchange has a PULSe workstation 
that is configured for use on the CBOE trading floor by CBOE TPHs (the 
``PULSe On-Floor Workstation'') for which it currently charges a fee of 
$225 per month per workstation (referred to in the Fees Schedule as a 
``login ID'').
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    \6\ In instances where two or more TPHs wish to make a PULSe 
workstation available to the same non-TPH customer, a fee reduction 
applies. Under the reduction, if two or more TPHs make the PULSe 
workstation available to the same non-TPH customer, then the monthly 
fee is reduced from $350 to $250 per workstation per TPH.
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    In order to give new users time to become familiar with and fully 
acclimated to the PULSe workstation functionality, the Exchange is 
proposing to adopt a fee waiver applicable to new PULSe workstation 
users. Specifically, the Exchange is proposing to waive the monthly 
workstation fees for the first month for the first new user of a TPH 
using the PULSe workstation. Similarly the Exchange is proposing to 
waive the monthly workstation fees for the first new user of a non-TPH 
using the PULSe workstation and the first new user of a TPH using the 
PULSe On-Floor Workstation. The proposed fee waivers are based on 
CBOE's billing period, which is based on a calendar month (i.e., begins 
on the first day of each month and ends on the last day of each month). 
So, for example, if a new user begins using the PULSe workstation on 
July 15th, the user's workstation fees would be waived from July 15th-
July 31st. This new user fee waiver will be operative July 1, 2011.
    Finally, the third purpose of this proposed rule change is to make 
a non-substantive numbering correction to the Fees Schedule. In 
particular, the Exchange is proposing to renumber Section 8(F)(10)(c) 
through (e) to (d) through (f) in order to correct a numbering error 
(there are currently two paragraphs numbered with (c)).
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\7\ in general, and furthers the objectives of Section 6(b)(4) of 
the Act,\8\ in particular, in that it is designed to provide for the 
equitable allocation of reasonable dues, fees, and other charges among 
Trading Permit Holders in that the same fees and fee waivers are 
applicable to all Trading Permit Holders that use the PULSe 
workstation. The Exchange also believes that the fee waivers will serve 
as an incentive for TPHs and their sponsored user customers to use the 
PULSe workstation as an additional trading tool on their trading desks.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
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    The Exchange also believes the proposed correction to the section 
numbering of the Fees Schedule is consistent with the Section 6(b)(5) 
\9\ requirements that the rules of an exchange be designed to promote 
just and equitable principles of trade, to prevent fraudulent and 
manipulative acts, to remove impediments to and to perfect the 
mechanism for a free and open market and a national market system, and, 
in general, to protect investors and the public interest. The Exchange 
believes the proposed correction would protect investors and the public 
interest by eliminating any potential confusion.
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    \9\ 15 U.S.C. 78f(b)(5).
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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.

[[Page 40967]]

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) of the Act \10\ and subparagraph (f)(2) of Rule 19b-4 
\11\ thereunder.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
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    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.

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-2011-063 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-2011-063. 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 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-2011-063 and should be 
submitted on or before August 2, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-17381 Filed 7-11-11; 8:45 am]
BILLING CODE 8011-01-P