Document ID: SEC-2010-1435-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2010-09-20T04:00Z

[Federal Register: September 20, 2010 (Volume 75, Number 181)]
[Notices]               
[Page 57313-57314]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20se10-90]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62902; File No. SR-CBOE-2010-081]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to Waiver of Transaction Fee for Public Customer 
Orders in SPDR Options Executed in Open Outcry or in the Automated 
Improvement Mechanism

September 14, 2010.
    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 September 3, 
2010, 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 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.

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 to waive the 
transaction fee for public customer orders in options on Standard & 
Poor's Depositary Receipts that are executed in open outcry or in the 
Automated Improvement Mechanism. 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Public customer (``C'' origin code) orders in options on Standard & 
Poor's Depositary Receipts (``SPDR options'') are charged a transaction 
fee of $.18 per contract, except for orders of 99 contracts or less.\1\ 
The Exchange proposes to amend its Fees Schedule to waive the 
transaction fee for public customer orders in SPDR options that are 
executed in open outcry or in the Automated Improvement Mechanism 
(``AIM'') \2\, effective September 7, 2010 through November 30, 2010. 
The proposed fee waiver is intended to attract more customer volume on 
the Exchange in this product.
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    \1\ Transaction fees are currently waived for customer orders of 
99 contracts or less in ETF, ETN and HOLDRs options. See CBOE Fees 
Schedule, footnote 9.
    \2\ AIM is an electronic auction system that exposes certain 
orders electronically in an auction to provide such orders with the 
opportunity to receive an execution at an improved price. AIM is 
governed by CBOE Rule 6.74A.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Securities Exchange Act of 1934 (``Act'') \3\, in 
general, and furthers the objectives of Section 6(b)(4) \4\ of the Act 
in particular, in that it is designed to provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and other persons using its facilities. The Exchange believes 
the proposed fee waiver is reasonable because it would result in cost 
savings during the waiver period for public customers trading SPDR 
options and is consistent with other fees assessed by the Exchange. The 
Exchange assesses manually executed broker-dealer orders a different 
rate ($.25 per contract) as compared to electronically executed broker-
dealer orders ($.45 per contract), and a different rate ($.20 per 
contract) for broker-dealer orders executed on AIM as compared to other 
electronic executions and manual executions of broker-dealer orders.\5\ 
Other exchange fee schedules also distinguish between electronically 
and non-electronically executed orders.\6\ The Exchange believes the 
proposed fee waiver is equitable because it would apply uniformly to 
all public customers trading SPDR options.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(4).
    \5\ See CBOE Fees Schedule, Section 1.
    \6\ NASDAQ OMX PHLX, Inc. categorizes its equity options 
transaction fees for Specialists, ROTs, SQTs, RSQTs and Broker-
Dealers as either electronic or non-electronic. See NASDAQ OMX PHLX 
Fees Schedule, Equity Options Fees. NYSE Amex, Inc. categorizes its 
options transaction fees for Non-NYSE Amex Options Market Makers, 
Broker-Dealers, Professional Customers, Non BD Customers and Firms 
as either electronic or manual. See NYSE Amex Fees Schedule, Trade 
Related Charges. NYSE Arca, Inc. categorizes its options transaction 
fees for Customers, Firms and Broker-Dealers as either electronic or 
manual. See NYSE Arca Fees Schedule, Trade Related Charges.
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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.

[[Page 57314]]

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 \7\ and subparagraph (f)(2) of Rule 19b-4 \8\ 
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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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 C.F.R. 240.19b-4(f)(2) [sic].
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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-2010-081 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-2010-081. 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 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-
CBOE-2010-081 and should be submitted on or before October 12, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-23384 Filed 9-17-10; 8:45 am]
BILLING CODE 8010-01-P