Document ID: SEC-2010-1262-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Incorporated
Posted Date: 2010-08-18T04:00Z

[Federal Register: August 18, 2010 (Volume 75, Number 159)]
[Notices]               
[Page 51132-51134]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18au10-165]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62704; File No. SR-CBOE-2010-073]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Amend Its Fees Schedule and Circular Regarding Trading 
Permit Holder Application and Other Related Fees

August 12, 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 August 3, 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 and II below, which Items have been prepared by CBOE. The 
Commission is

[[Page 51133]]

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 amend its Fees Schedule and circular 
regarding Trading Permit Holder application and other related fees 
(``Trading Permit Fee Circular'') as they apply to tier appointments 
and bandwidth packets. 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'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, 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
    CBOE is proposing to amend its Fees Schedule and Trading Permit Fee 
Circular to extend the deadline for notification of termination of a 
tier appointment or bandwidth packet until the last business day of the 
prior month. Specifically, tier appointments and bandwidth packets will 
be renewed automatically for the next month unless the Trading Permit 
Holder submits written notification to the CBOE Registration Services 
Department by the last business day of the prior month to cancel the 
tier appointment or bandwidth packet effective at or prior to the end 
of the applicable month. Trading Permit Holders were previously 
required to submit this notification by the 25th day of the prior month 
(or the preceding business day if the 25th was not a business day). 
CBOE no longer believes that it requires this additional notice in the 
context of tier appointment and bandwidth packet terminations.
    CBOE is also proposing to amend its Fees Schedule and Trading 
Permit Fee Circular to establish a fee scale for the purchase of Order 
Entry Bandwidth Packets under which the cost of an Order Entry 
Bandwidth Packet would decline at certain break points as additional 
Order Entry Bandwidth Packets are purchased. Specifically, the first 
through fifth Order Entry Bandwidth Packets obtained by a Trading 
Permit Holder would cost $2,000 per packet per month, the sixth through 
eighth Order Entry Bandwidth Packets obtained by that Trading Permit 
Holder would cost $1,000 per packet per month, the ninth through 
thirteenth Order Entry Bandwidth Packets obtained by that Trading 
Permit Holder would cost $500 per packet per month, and the fourteenth 
and each additional Order Entry Bandwidth Packet obtained by that 
Trading Permit Holder would cost $250 per packet per month. As with 
CBOE's current bandwidth packet fees, the foregoing fees would be 
discounted by 20% through the end of 2010.
    CBOE also proposes to allow Trading Permit Holders to obtain and 
assign to a particular Sponsored User of the Trading Permit Holder one 
or more Order Entry Bandwidth Packets. In that event, the fees for the 
assigned bandwidth packet(s) would be assessed to the Trading Permit 
Holder and the bandwidth packet(s) could be utilized solely by the 
Sponsored User (and not by the Trading Permit Holder or any other 
Sponsored User).
    Fees for Order Entry Bandwidth Packets assigned to a particular 
Sponsored User would be subject to the same fee scale as above and to 
the 20% discount through the end of 2010 that would apply to Order 
Entry Bandwidth Packets obtained by Trading Permit Holders that are not 
assigned to a particular Sponsored User, with one difference. 
Specifically, each break point in the fee scale would be one numeral 
higher than in the fee scale for Order Entry Bandwidth Packets not 
assigned to a particular Sponsored User. Thus, for example, the first 
tier of the fee scale for Order Entry Bandwidth Packets assigned to a 
particular Sponsored User would be for the first four Order Entry 
Bandwidth Packets instead of for the first three Order Entry Bandwidth 
Packets. The reason for this difference is that each Trading Permit 
Holder has already paid for the order entry bandwidth allocation that 
is provided by the Trading Permit by paying for the Trading Permit so 
the fee scale is structured so that the fee for the first Order Entry 
Bandwidth Packet that is assigned to a Sponsored User is paid before 
the sliding scale becomes applicable.
    Thus, the full fee scale for Order Entry Bandwidth Packets assigned 
by a Trading Permit Holder to a Sponsored User would be that the first 
through sixth Order Entry Bandwidth Packets assigned to the Sponsored 
User would cost $2,000 per packet per month, the seventh through ninth 
Order Entry Bandwidth Packets assigned to that Sponsored User would 
cost $1,000 per packet per month, the tenth through fourteenth Order 
Entry Bandwidth Packets assigned to that Sponsored User would cost $500 
per packet per month, and the fifteenth and each additional Order Entry 
Bandwidth Packet assigned to that Sponsored User would cost $250 per 
packet per month.
    CBOE is proposing to implement the foregoing changes effective for 
the month of August 2010.
2. Statutory Basis
    The proposed rule change will treat all Trading Permit Holders in a 
consistent manner and apply the same fees with respect to all Sponsored 
Users. The difference in the fee scale applicable with respect to 
Sponsored Users is reasonable in that Sponsored Users are not CBOE 
Trading Permit Holders and have not already obtained an order entry 
bandwidth allowance through the purchase of a Trading Permit. 
Accordingly, the Exchange believes that the proposed rule change is 
consistent with Section 6(b) of the Act,\3\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act \4\ in particular, in that 
it is designed to provide for the equitable allocation of reasonable 
dues, fees, and other charges among persons using its facilities for 
the reasons described above.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 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

    The foregoing rule has become effective pursuant to Section 
19(b)(3)(A)

[[Page 51134]]

of the Act \5\ and subparagraph (f)(2) of Rule 19b-4\6\ 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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    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 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-2010-073 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-2010-073. 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-2010-073 and should be 
submitted on or before September 8, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-20407 Filed 8-17-10; 8:45 am]
BILLING CODE 8010-01-P