Document ID: SEC-2008-1692-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2008-12-17T05:00Z

[Federal Register: December 17, 2008 (Volume 73, Number 243)]
[Notices]               
[Page 76686-76688]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17de08-119]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59073; File No. SR-CBOE-2008-122]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by Chicago Board Options 
Exchange, Incorporated Regarding Fees for the CBOE Stock Exchange

December 10, 2008.
    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 November 28, 2008, the Chicago Board Options Exchange, Incorporated 
(``CBOE'' or ``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 the 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 modify its fees applicable to the CBOE Stock 
Exchange (``CBSX''). 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.

[[Page 76687]]

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 CBSX Fees Schedule lists the fees applicable to trading on 
CBSX. Those fees include transaction fees, which are based on whether 
the executing member is ``taking'' liquidity or ``making'' liquidity in 
connection with the transaction. The CBSX Fees Schedule also sets forth 
market quality bid/ask standards called Liquidity Provider Guidelines 
(``LPGs''). If the LPGs are met 90% of the time each day, then all CBSX 
Designated Primary Market-Makers \3\ (``CBSX DPMs'') and CBSX Remote 
Market-Makers \4\ (``CBSX RMMs'') receive enhanced maker rebates as set 
forth in the CBSX Fees Schedule. Specifically, CBSX RMMs that meet LPGs 
receive a maker rebate of $0.0027 per share, while CBSX DPMs that meet 
LPGs receive a maker rebate of $0.0029 per share. This filing proposes 
to make four changes to the CBSX fee schedule.
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    \3\ See CBOE Rule 50.3(4).
    \4\ See CBOE Rule 50.3(2).
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    First, the filing establishes a uniform qualifying Market-Maker 
maker rebate of $0.0027 per share that would apply to all CBSX Market-
Makers \5\ when the LPGs are met. Second, the filing proposes to lower 
the general maker rebate from $0.0026 to $0.0025 per share. Third, the 
filing proposes to adopt fees for stock orders that are executed 
pursuant to CBOE's Automated Improvement Mechanism and Solicitation 
Auction Mechanism (Rules 6.74A.07 and 6.74B.01). These CBOE rules 
govern crossing orders pursuant to electronic auctions. Recently, CBOE 
adopted changes to those rules to allow those mechanisms to process 
complex orders (including stock-option orders). This filing proposes to 
establish a $0.0005 per share fee for these stock executions subject to 
a $1 minimum and $25 maximum charge. Fourth, the filing proposes to 
establish a fee for shares routed to other markets in connection with 
the execution of a CBSX Cross and Sweep order. The fee would be $0.0040 
per share. Cross and Sweep orders (See CBSX Rule 51.8(r)) allow users 
to cross orders on CBSX at prices outside of the NBBO while the CBSX 
system contemporaneously sweeps all protected quotes on other markets 
and all better priced interest on CBSX in connection with the cross.
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    \5\ See CBOE Rule 50.3(1).
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    The proposed changes will take effect on December 1, 2008.
2. Statutory Basis
    The proposed rule change is consistent with section 6(b) of the 
Securities Exchange Act of 1934 (``Act''),\6\ in general, and furthers 
the objectives of section 6(b)(4) \7\ 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.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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 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

    Because the foregoing 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 \8\ and subparagraph (f)(2) 
of Rule 19b-4 \9\ 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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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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-2008-122 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-CBOE-2008-122. 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 inspection and 
copying in the Commission's Public Reference Room, 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-2008-122 and should be submitted on or before January 7, 2009.

[[Page 76688]]

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-29903 Filed 12-16-08; 8:45 am]

BILLING CODE 8011-01-P