Document ID: SEC-2010-1938-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2010-12-16T05:00Z

[Federal Register Volume 75, Number 241 (Thursday, December 16, 2010)]
[Notices]
[Pages 78780-78781]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-31625]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63524; File No. SR-CBOE-2010-110]

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

December 10, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on December 6, 2010, 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 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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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 increase its Options Regulatory Fee. 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, the Proposed Rule Change

1. Purpose
    The Exchange charges an Options Regulatory Fee (``ORF'') of $.004 
per contract to each Trading Permit Holder for all options transactions 
executed or cleared by the Trading Permit Holder that are cleared by 
The Options Clearing Corporation (``OCC'') in the customer range, 
excluding Linkage \3\ orders, regardless of the exchange on which the 
transaction occurs. The ORF is collected indirectly from Trading Permit 
Holders through their clearing firms by OCC on behalf of the 
Exchange.\4\
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    \3\ The term ``Linkage'' refers to the Options Order Protection 
and Locked/Crossed Market Plan.
    \4\ The ORF was established in October 2008 as a replacement of 
Registered Representative fees. See Securities Exchange Act Release 
No. 58817 (October 20, 2008), 73 FR 63744 (October 27, 2008). The 
ORF was to be effective January 1, 2009. In December 2008 and 
January 2009, the Exchange filed proposed rule changes waiving the 
ORF for January and February, to allow additional time for the 
Exchange, OCC and firms to put in place appropriate procedures to 
implement the fee. See Securities Exchange Act Release No. 59182 
(December 30, 2008), 74 FR 730 (January 7, 2009), and Securities 
Exchange Act Release No. 59355 (February 3, 2009), 74 FR 6677 
(February 10, 2009). The ORF was amended three additional times in 
2009. See Securities Exchange Act Release No. 59427 (February 20, 
2009), 74 FR 9013 (February 27, 2009); Securities Exchange Act 
Release No. 60093 (June 10, 2009), 74 FR 28749 (June 17, 2009); and 
Securities Exchange Act Release No. 60513 (August 17, 2009), 74 FR 
42719 (August 24, 2009). The ORF was amended in March 2010 to 
eliminate a reference to a one-cent charge per trade. See Securities 
Exchange Act Release No. 61641 (March 3, 2010), 75 FR 11220 (March 
10, 2010).
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    The Exchange has reevaluated the current amount of the ORF in 
connection with its annual budget review. In light of increased 
regulatory costs and expected volume levels for 2011, the Exchange 
proposes to increase the ORF from $.004 per contract to $.0045 per 
contract. The proposed fee change would become operative on January 3, 
2011.
    The Exchange monitors the amount of revenue collected from the ORF 
to ensure that it, in combination with its other regulatory fees and 
fines, does not exceed regulatory costs. The Exchange will continue to 
monitor regulatory costs and revenues at a minimum on an annual basis. 
If the Exchange determines regulatory revenues exceed regulatory costs, 
the Exchange would adjust the ORF by submitting a fee change filing to 
the Commission. The Exchange notifies Trading Permit Holders of 
adjustments to the ORF via regulatory circular.
2. Statutory Basis
    The Exchange believes 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 its 
Trading Permit Holders. The Exchange believes the proposed ORF is 
reasonable because revenue from the proposed ORF, in combination with 
the Exchange's other regulatory fees and fines, will not exceed 
regulatory costs. The Exchange believes the proposed ORF is equitable 
because it would apply uniformly to all Trading Permit Holders who are 
being assessed the ORF.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 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 that is 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 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.

[[Page 78781]]

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-2010-110 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-2010-110. 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-2010-110 and should be 
submitted on or before January 6, 2011.
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    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010-31625 Filed 12-15-10; 8:45 am]
BILLING CODE 8011-01-P