Document ID: SEC-2012-0611-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2012-04-17T04:00Z

[Federal Register Volume 77, Number 74 (Tuesday, April 17, 2012)]
[Notices]
[Pages 22824-22825]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-9141]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66784; File No. SR-CBOE-2012-035]

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

April 11, 2012.
    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 April 2, 2012, the Chicago Board Options Exchange, Incorporated 
(the ``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 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

    The Exchange proposes to amend its Fees Schedule. The text of the 
proposed rule change is available on the Exchange's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), 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 Exchange 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. The Exchange 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 proposes to amend its Fees Schedule. Specifically, the 
Exchange proposes to increase voluntary professional and professional 
transaction fees for equity options and index, ETF, ETN and HOLDRs 
options (aside from OEX, XEO, SPXW and Volatility Indexes) from $0.20 
per contract to $0.25 per contract (with the exception of transactions 
executed as Qualified Contingent Cross (``QCC'') trades or transactions 
executed through the Exchange's Automated Improvement Mechanism 
(``AIM'') when the professional or voluntary professional is on the 
Agency/Primary side). The fees for QCC and AIM Agency/Primary 
transactions will remain $0.20 per contract, (the same amount assessed 
to broker-dealers for such transactions). This change is proposed due 
to competitive reasons and to better reflect the costs associated with 
supporting a larger number of option classes, option series, and 
overall transaction volumes that have grown over time. Moreover, 
professional and voluntary professional trading volume has increased 
heavily over the past three years,\3\ and the Exchange has therefore 
had to continually invest in software, hardware and personnel. Also, 
this $0.25 per contract fee is in line with similar fees offered on 
other exchanges,\4\ and the Exchange believes professional and 
voluntary professional customers can bear this increased fee.
---------------------------------------------------------------------------

    \3\ Exchange professional and voluntary professional trading 
volume has increased from 49,313 contract sides in February 2009 to 
3,420,160 contract sides in February 2012.
    \4\ See NYSE Amex LLC (``Amex'') Fee Schedule, which assesses 
professional customers a $0.25 per contract fee for manual 
executions and a $0.23 per contract fee for electronic executions.
---------------------------------------------------------------------------

    Because the regular voluntary professional and professional 
transaction fees discussed herein will be different from those for AIM 
Agency/Primary transactions, the Exchange also proposes to amend 
footnote (19) of the Fees Schedule to reflect the fact that the AIM 
Agency/Primary fee applies to voluntary professional and professional 
transactions.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of

[[Page 22825]]

Section 6(b) of the Act.\5\ Specifically, the Exchange believes the 
proposed rule change is consistent with Section 6(b)(4) of the Act \6\, 
which provides that Exchange rules may provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
Trading Permit Holders and other persons using its facilities. The 
proposed increases in voluntary professional and professional fees are 
reasonable because of the growth in professional and voluntary 
professional trading volume.\7\ This growth requires the Exchange to 
continually invest in software, hardware and personnel, the cost of 
which can reasonably be expected to be borne by these professional and 
voluntary professional market participants that cause these 
investments.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
    \7\ See Note 3.
---------------------------------------------------------------------------

    The Exchange believes the proposed increases in voluntary 
professional and professional fees are equitable and not unfairly 
discriminatory because the fees as noted are generally tied to an 
overall increase in activity on the Exchange. This heightened activity 
results in greater costs to the Exchange, which in turn is being passed 
back through to those participants who utilize the resources of the 
Exchange. Further, these increased fees will be applied equally to all 
market participants to whom they apply, and are in line with similar 
fees offered on other exchanges.\8\ Maintaining $0.20 per contract 
voluntary professional and professional fees for contracts executed 
through QCC transactions or AIM is equitable and not unfairly 
discriminatory because this is the same amount as is being assessed to 
broker-dealers for QCC or AIM transactions (broker-dealers being 
similarly-situated as voluntary professionals and professionals for 
these purposes).
---------------------------------------------------------------------------

    \8\ See Note 4.
---------------------------------------------------------------------------

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

    The Exchange neither solicited nor received comments on 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) \9\ of the Act and paragraph (f) of Rule 19b-4 \10\ 
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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 C.F.R. 240.19b-4(f).
---------------------------------------------------------------------------

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 email to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2012-035 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-2012-035. This file 
number should be included on the subject line if email 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 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-CBOE-2012-035 and should be 
submitted on or before May 8, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-9141 Filed 4-16-12; 8:45 am]
BILLING CODE 8011-01-P