Document ID: SEC-2011-0714-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2011-05-18T04:00Z

[Federal Register Volume 76, Number 96 (Wednesday, May 18, 2011)]
[Notices]
[Pages 28834-28836]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-12240]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64485; File No. SR-CBOE-2011-046]

Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to Orders Qualifying for Certain Quantity-Based 
Fee Waivers

May 13, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934, 15 U.S.C. 78s(b)(1), notice is hereby given that on April 29, 
2011, 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 CBOE. The Commission 
is publishing this notice to solicit comments on the proposed rule 
change from interested persons.

[[Page 28835]]

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 regarding the waiver 
of customer transaction fees for orders of a certain size in options on 
exchange-traded funds (``ETFs''), exchange-traded notes (``ETNs'') and 
Holding Company Depositary Receipts (``HOLDRs'') and customer 
transaction fees for orders of a certain size that are routed in whole 
or in part, to one or more exchanges in connection with the Options 
Order Protection and Locked/Crossed Market Plan referenced in Rule CBOE 
6.80 (``Linkage Fees''). 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, Proposed Rule Change

1. Purpose
    The Exchange proposes to institute the following fee changes 
effective May 2, 2011:
    The Exchange currently waives transaction fees for customer orders 
of 99 contracts or less in ETF, ETN and HOLDRs options.\1\ For the 
purpose of determining which orders qualify for this quantity-based fee 
waiver, the Exchange proposes to aggregate multiple orders from the 
same executing firm for itself or for a CMTA or correspondent firm in 
the same series on the same side of the market that are received by the 
Exchange within 500 milliseconds. This change is intended to discourage 
firms from dividing orders into multiple orders of less than 100 
contracts for purposes of qualifying for the fee waiver and avoiding 
transaction fees.
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    \1\ See CBOE Fees Schedule, Footnote 9.
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    Additionally, under Section 20 of the CBOE Fees Schedule, for each 
customer order with an original size of 100 or more contracts that is 
routed, in whole or in part, to one or more exchanges in connection 
with the Options Order Protection and Locked/Crossed Market Plan 
referenced in Rule 6.80, the Exchange passes through the actual 
transaction fee assessed by the exchange(s) to which the order was 
routed, minus $0.05 per contract. For the same reason stated above, the 
Exchange proposes to aggregate multiple orders from the same executing 
firm for itself or for a CMTA or correspondent firm in the same series 
on the same side of the market that are received by the Exchange within 
500 milliseconds for the purpose of determining the order quantity.
    The proposed aggregation of orders is similar to a provision in the 
Exchange's Order Handling System (``OHS'') Order Cancellation Fee that 
enables the Exchange to aggregate certain orders and count them as one 
executed order for purposes of the Cancellation Fee.\2\
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    \2\ See CBOE Fees Schedule, Section 14 and Securities Exchange 
Act Release No. 59690 (April 2, 2009), 74 FR 16243 (April 9, 2009).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Securities Exchange Act of 1934 (``Act''), \3\ in 
general, and furthers the objectives of Section 6(b)(4) \4\ 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 
Trading Permit Holders and other persons using its facilities. In 
particular, the Exchange believes the proposed rule change is equitable 
and reasonable in that it is designed to discourage firms from dividing 
orders into multiple smaller size orders for purposes of qualifying for 
quantity-based fee waivers and avoiding fees. In addition, the proposed 
aggregation of orders is similar to a provision in the Exchange's OHS 
Order Cancellation Fee that enables the Exchange to aggregate certain 
orders and count them as one executed order for purposes of the 
Cancellation Fee.
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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 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 change has become effective pursuant to Section 
19(b)(3)(A) 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-2011-046 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.

All submissions should refer to File Number SR-CBOE-2011-046. 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

[[Page 28836]]

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 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-2011-046 and should be submitted on or before June 8, 2011.

    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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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-12240 Filed 5-17-11; 8:45 am]
BILLING CODE 8011-01-P