Document ID: SEC-2010-1447-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: C2 Options Exchange, Inc.
Posted Date: 2010-09-22T04:00Z

[Federal Register: September 22, 2010 (Volume 75, Number 183)]
[Notices]               
[Page 57821-57822]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22se10-111]                         

=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62910; File No. SR-C2-2010-003]

 
Self-Regulatory Organizations; C2 Options Exchange, Incorporated; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Adopt Certain Application-Related Fees

September 14, 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 September 10, 2010, C2 Options Exchange, Incorporated (the 
``Exchange'' or ``C2'') 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 Commission is publishing this notice to solicit comments 
on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    C2 proposes to adopt application fees. 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to adopt application-
related fees for C2 Options Exchange, Inc. C2 anticipates launching in 
mid/late October, 2010. In connection with the commencement of trading 
on C2, the Exchange intends to begin accepting applications for C2 
trading permits in the very near future. As part of the application 
process, C2 intends to charge applicant organizations a $4,000 
application fee, and sole-proprietor applicants a $2,500 application 
fee. Existing Chicago Board Options Exchange, Incorporated (``CBOE'') 
permit holders applying for C2 trading permits will not be charged an 
application fee since nearly all of the necessary application 
processing required by the Exchange has already been conducted with 
respect to those CBOE permit holders. In fact, existing CBOE permit 
holders, pursuant to C2 Rule 3.1(c)(1) are not required to complete and 
submit an Exchange application. C2 notes that costs associated with 
utilizing a C2 trading permit (e.g. a market-maker permit) would apply 
equally to CBOE permit holder [sic] and non-CBOE permit holders.
    In connection with the application process, certain application-
related fees that are in place at CBOE will also be adopted by C2. 
Specifically, fees for applicants seeking to conduct a public customer 
business ($2,500), fees for associated persons ($350), joint account 
applicant fees ($1,000) \3\, permit renewal fees ($2,000 for 
organizations and $500 for sole proprietors), fees associated with 
statutory disqualification and Rule 19h-1 processing ($2,750 and $1,650

[[Page 57822]]

respectively) \4\, exam fees ($500), permit transfer fees ($500), and 
fingerprint fees ($50) are all being adopted. The proposed fee levels 
are comparable to those in place at CBOE. For the reasons stated above, 
these fees, with the exception of renewal fees (which are applicable on 
subsequent one-year anniversaries of C2 ``membership''), statutory 
disqualification fees, Rule 19h-1 change in status fees, exam fees, 
permit transfer fees, and fingerprint fees will not be charged to CBOE 
permit holders seeking to trade on C2.
---------------------------------------------------------------------------

    \3\ This fee is payable for each application to establish a new 
joint account.
    \4\ The statutory disqualification fee is payable whenever a 
person or entity is subject to a statutory disqualification under 
the Securities Exchange Act of 1934 and: (i) Is an applicant for 
Exchange membership, (ii) is seeking to be an associated person of 
an Exchange member (except where the Exchange is merely asked to 
concur in an SEC Rule 19h-1 filing by another self regulatory 
organization), or (iii) is an existing Exchange member or associated 
person who makes an application in accordance with Rule 3.5 or with 
respect to whom a proceeding is initiated pursuant to Rule 3.5. This 
fee is in addition to any other membership fees that might be 
applicable. The Rule 19h-1 Change in Status Fee is payable whenever 
a person or entity, on whose behalf the Exchange has filed a Rule 
19h-1 filing that has been approved by the SEC, applies for a change 
in status that requires the Exchange to file an amended or 
additional Rule 19h-1 filing, if the Exchange approves the requested 
change in status. This fee is in addition to any other membership 
fees that might be applicable.
---------------------------------------------------------------------------

    The changes will take effect on September 13, 2010.
2. Statutory Basis
    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 C2 members and other persons using 
its facilities. C2 notes that applicants, depending on whether they are 
organizations or sole-proprietors, will all be charged fixed fees which 
is [sic] intended to offset the Exchange's costs of processing the 
permit holder applications and application-related matters, and that 
the proposed fee amounts are comparable to those charged by CBOE.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    C2 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)(ii) \7\ of the Act and subparagraph (f)(2) of Rule 19b-4 
\8\ thereunder. At any time within 60 days of the filing of such 
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.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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-C2-2010-003 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-C2-2010-003. 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 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 the 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 Number SR-C2-2010-003 and should be 
submitted on or before October 13, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-23595 Filed 9-21-10; 8:45 am]
BILLING CODE 8010-01-P