Document ID: SEC-2010-0796-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2010-06-01T04:00Z

[Federal Register: June 1, 2010 (Volume 75, Number 104)]
[Notices]               
[Page 30452-30453]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01jn10-122]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62148; File No. SR-CBOE-2010-045]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to the Establishment of a Post-Demutualization 
Trading Permit Application Fee

May 21, 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 May 14, 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, II, and III 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

    CBOE proposes to amend the CBOE and CBOE Stock Exchange (``CBSX'') 
Fees Schedules to establish a Post-Demutualization Trading Permit 
Application 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, at the Commission's Public Reference Room, and 
on the Commission's Web site at http://www.sec.gov.

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 purpose of this proposed rule change is to amend the CBOE and 
CBSX Fees Schedules to establish a Post-Demutualization Trading Permit 
Application Fee. Following CBOE's proposed demutualization,\3\ access 
to CBOE and CBSX will be provided through the issuance of Trading 
Permits. Issuance of these Trading Permits will require an application 
process for all current members with trading privileges and related 
functions on the Exchange (including member organizations, individual 
members, temporary members, interim trading permit holders and CBSX 
trading permit holders). To apply for trading permits, all such CBOE 
members will be required to submit a Post-Demutualization Trading 
Permit Application to request the type of access desired following 
demutualization. The Post-Demutualization Trading Permit Application 
will need to be submitted prior to the effectiveness of the 
demutualization for trading access to CBOE and CBSX to continue without 
interruption at demutualization. The Exchange will administer the 
application process in the manner that has already been proposed to the 
Commission, contingent upon the approval of that process by the 
Commission.\4\
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    \3\ See Securities Exchange Act Release No. 58425 (August 26, 
2008), 73 FR 51652 (September 4, 2008) (noticing for comment SR-
CBOE-2008-88), which sets forth a description of CBOE's proposed 
demutualization.
    \4\ See Securities Exchange Act Release No. 58425 (August 26, 
2008), 73 FR 51652 (September 4, 2008) (noticing for comment SR-
CBOE-2008-88), which sets forth a description of the post-
demutualization trading permit application process.
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    Due to the significant amount of time required to process all of 
the Post-Demutualization Trading Permit Applications, CBOE proposes to 
establish a $1,000 Post-Demutualization Trading Permit Application Fee 
that would be assessed to any member organization or individual member 
that is not associated with a member organization that submits a Post-
Demutualization Trading Permit Application after May 21, 2010. 
Specifically, the fee would only be assessed for Post-Demutualization 
Trading Permit Applications received after the close of business on May 
21, 2010 and prior to the close of business on the effective date of 
demutualization.\5\
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    \5\ The effective date of demutualization is the date that CBOE 
completes its restructuring of the Exchange from a non-stock 
corporation to a stock corporation and wholly-owned subsidiary of 
CBOE Holdings, Inc. This should be distinguished from the date of 
approval by the SEC of SR-CBOE-2008-088, as the filing may be 
approved some period of time prior to the actual effectiveness of 
the demutualization.
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    The Post-Demutualization Trading Permit Application Fee would not 
be assessed for Post-Demutualization Trading Permit Applications 
received on or prior to May 21, 2010. The Post-Demutualization Trading 
Permit Application Fee would also not be assessed to new CBOE members 
that are not approved and active until after May 21, 2010. In addition, 
the Post-Demutualization Trading Permit Application Fee would not be 
assessed for any amendments submitted after May 21, 2010 to Post-
Demutualization

[[Page 30453]]

Trading Permit Applications where the initial application was submitted 
prior to the close of business on May 21, 2010.
    The existing CBOE Membership application fees are set forth in 
Section 11 of the CBOE Fees Schedule as well as in a regulatory 
circular (``Membership Fees Circular''). The Exchange proposes to add 
the Post-Demutualization Trading Permit Application Fee to Section 11 
of the CBOE Fees Schedule and to revise the Membership Fees Circular. 
The proposed changes to the CBOE Fees Schedule are included as part of 
Exhibit 5 to the 19b-4. The proposed changes to the Membership Fees 
Circular are included as Exhibit 2 to the 19b-4.
    CBOE proposes to add a new Section 8 to the CBSX Fees Schedule for 
Membership Fees that includes the Post-Demutualization Trading Permit 
Application Fee. The proposed changes to the CBSX Fees Schedule are 
included as part of Exhibit 5 to the 19b-4.
2. Statutory Basis
    The Exchange believes 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 its 
members and other persons using its facilities. In particular, the 
proposed fee would be assessed to all members in a consistent manner 
and encourage the submission of Post-Demutualization Trading Permit 
Applications with sufficient time to allow for the efficient processing 
of these applications. CBOE believes this fee is reasonable as compared 
to other application fees assessed by the Exchange and is reflective of 
the amount of work necessary to process the applications.
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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 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

    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-2010-045 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-2010-045. 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-2010-045 and should be 
submitted on or before June 22, 2010.

    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,
Deputy Secretary.
[FR Doc. 2010-13038 Filed 5-28-10; 8:45 am]
BILLING CODE 8010-01-P