Document ID: SEC-2012-0093-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: C2 Options Exchange, Inc.
Posted Date: 2012-01-20T05:00Z

[Federal Register Volume 77, Number 13 (Friday, January 20, 2012)]
[Notices]
[Pages 3017-3018]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-1025]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66148; File No. SR-C2-2012-001]

Self-Regulatory Organizations; C2 Options Exchange, Incorporated; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Amend the Fees Schedule

January 13, 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 January 5, 2012, the 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, 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.
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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

    The Exchange proposes to amend the Fees Schedule. 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 Exchange proposes to amend its Fees Schedule to state that CMI 
and FIX connectivity charges will be charged on a per-Login ID basis. 
Firms may access C2 via either a CMI Client Application

[[Page 3018]]

Server or a FIX Port, depending on how their systems are configured. 
Currently, the Exchange assesses a fee for each CMI Client Application 
Server or FIX Port. However, a firm may have many users, using 
different Login IDs, accessing the same CMI Client Application Server 
or FIX Port, allowing the firm to only pay the monthly fee once. 
Alternatively, a firm may use the same Login ID to access different CMI 
Client Application Servers or FIX Ports, thereby paying multiple times 
for the same Login ID.
    On December 20, 2011, the Exchange filed to amend its connectivity 
fees (among other fees) in order to recoup some of the costs from 
recent investments made to upgrade the CMI Client Application Servers 
and FIX Ports.\3\ In that filing, the Exchange amended such 
connectivity fees to amounts that kept them equivalent to those offered 
on the Chicago Board Options Exchange, Incorporated (``CBOE''). CBOE, 
however, assesses CMI and FIX fees on a per-Login ID basis.\4\ The 
Exchange had intended to ensure that C2's CMI and FIX fees were to be 
assessed on a per-Login ID basis as well, but inadvertently failed to 
make such modifications. Without assessing such fees on a per-Login ID 
basis, the situations described above, wherein a firm may have many 
users, using different Login IDs, accessing the same CMI Client 
Application Server or FIX Port, allowing the firm to only pay the 
monthly fee once, and another firm may use the same Login ID to access 
different CMI Client Application Servers or FIX Ports, thereby paying 
multiple times for the same Login ID, may occur. Further, without 
assessing such fees on a per-Login ID basis, the Exchange will not be 
able to recoup the costs of the investments to upgrade the CMI Client 
Application Servers and FIX Ports. As such, the Exchange now proposes 
to assess CMI Client Application Server and FIX Port costs on a per-
Login ID basis.
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    \3\ See Securities Exchange Act Release No. 66082 (January 3, 
2012) (SR-C2-2011-041).
    \4\ See CBOE Fees Schedule, Section 16.
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
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 Trading Permit Holders and other persons using Exchange facilities. 
Amending the connectivity fees so that they are assessed on a per-Login 
ID basis is reasonable because this will allow the Exchange to recoup 
expenditures to upgrade the connectivity equipment, and because this 
eliminates circumstances wherein a firm may have many users, using 
different Login IDs, accessing the same CMI Client Application Server 
or FIX Port, allowing the firm to only pay the monthly fee once, and 
another firm may use the same Login ID to access different CMI Client 
Application Servers or FIX Ports, thereby paying multiple times for the 
same Login ID. Amending the connectivity fees so that they are assessed 
on a per-Login ID basis is equitable and not unfairly discriminatory 
because such fees will be assessed equally to all who use the CMI 
Client Application Servers or FIX Ports, and because CBOE currently 
assesses such connectivity fees on a per-Login ID basis, and in the 
same amounts as the C2 connectivity fees.\7\
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
    \7\ See CBOE Fees Schedule, Section 16.
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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) 
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 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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    \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 email to rule-comments@sec.gov. Please include 
File Number SR-C2-2012-001 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-C2-2012-001. 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-C2-2012-001 and should be 
submitted on or before February 10, 2012.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-1025 Filed 1-19-12; 8:45 am]
BILLING CODE 8011-01-P