Document ID: SEC-2010-0101-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Professional Fees
Posted Date: 2010-01-19T05:00Z

[Federal Register Volume 75, Number 11 (Tuesday, January 19, 2010)]
[Notices]
[Pages 2901-2902]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-823]

[[Page 2901]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61329; File No. SR-CBOE-2009-101]

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

January 11, 2010.
    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 December 24, 2009, 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 is proposing to amend its Fees Schedule as it relates to fees 
for certain orders. 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, 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
    On December 17, 2009, the Securities and Exchange Commission 
approved a proposed rule change by the CBOE to establish a Professional 
\3\ designation.\4\ This designation provides that certain non-broker-
dealer customers will participate in CBOE's allocation process on equal 
terms with broker-dealer orders. In the aforementioned filing, the 
Exchange represented that it intends to establish, via a separate rule 
filing, transaction fees applicable to Professionals. In accordance 
with that representation, the Exchange now proposes to amend its fees 
schedule to establish the transaction fees that would be applicable to 
Professional orders. These fees will be commencing on January 4, 2010.
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    \3\ See CBOE Rule 1.1(ggg).
    \4\ See Securities Exchange Act Release No. 61198 (December 17, 
2009) (SR-CBOE-2009-078).
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    The Exchange proposes to charge Professional orders in the same 
manner that it charges Voluntary Professional orders. Specifically, 
Professional orders will be charged a $0.20 per contract transaction 
fee in all equity options and options on indexes, exchange-traded funds 
and holding company depository receipts (except those listed below). 
The Exchange proposes a $0.40 per contract transaction fee in DXL, OEX, 
XEO, and DVS options and all volatility index options, and a $0.85 per 
contract transaction fee in credit default and credit default basket 
options. The Exchange proposes to amend footnote 14 (index option 
surcharge fee) to clarify that the Surcharge Fee would apply to 
Professionals.
    The Exchange notes that the Options Regulatory Fee contained in 
section 12 will apply to Professionals as it currently does to 
Voluntary Professionals (no changes to the text are needed to reflect 
this).\5\ In addition, the Exchange notes that, as with Voluntary 
Professionals, Professional orders will not be subject to the order 
handling system order cancellation fee contained in section 14 (no 
changes to the text are needed to reflect this).
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    \5\ The Options Regulatory Fee is assessed by CBOE to each 
member for all options transactions executed or cleared by the 
member that are cleared by The Options Clearing Corporation 
(``OCC'') in the customer range, excluding Linkage orders, 
regardless of the exchange on which the transaction occurs. 
Professional orders, which will use order origin code ``W,'' are 
cleared in the customer range at OCC.
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    Lastly, the Exchange is proposing one other change to its fees 
schedule that will be applicable to both Voluntary Professional orders 
and Professional orders. Specifically, the Exchange is proposing to 
amend section 20 (non-customer linkage fees) to provide that the non-
customer linkage fees will be assessed on Voluntary Professional orders 
and Professional orders.\6\
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    \6\ Under the non-customer linkage fee, for any non-customer 
order routed to other exchanges, CBOE assesses the following costs 
to the member that submitted the non-customer order to CBOE: (i) 
Charge a $0.05 per contract routing fee, (ii) pass through all 
actual charges assessed by the away exchange(s) (these are 
calculated on an order-by-order basis since different away exchanges 
charge different amounts), and (iii) charge CBOE's customary 
execution fees applicable to the order. The routing fee helps offset 
costs incurred by the Exchange in connection with using an 
unaffiliated broker-dealer to access other exchanges. Passing 
through charges assessed by other exchanges for ``linkage'' 
executions and charging for related CBOE executions are appropriate 
because non-customer order flow can route directly to those 
exchanges if desired and the Exchange chooses not to absorb those 
costs at this time.
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\7\ in general, and furthers the objectives of Section 6(b)(4) \8\ 
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. The proposed fee 
changes would enable the Exchange to implement the Professional 
designation.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 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 proposed 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 \9\ and Rule 19b-
4(f)(2) \10\ thereunder. At any time within 60 days of the filing of 
the proposed rule change the Commission may summarily abrogate such 
proposed rule change if it appears to the Commission that such action 
is necessary or appropriate in the public interest, for the protection 
of investors,

[[Page 2902]]

or otherwise in furtherance of the purposes of the Act.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 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-2009-101 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-2009-101. 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,\11\ 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, 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 CBOE. 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-2009-101 and should be 
submitted on or before February 9, 2010.
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    \11\ The text of the proposed rule change is available on CBOE's 
Web site at http://www.cboe.org/legal, on the Commission's Web site 
at http://www.sec.gov, at CBOE, and at the Commission's Public 
Reference Room.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-823 Filed 1-15-10; 8:45 am]
BILLING CODE 8011-01-P