[Federal Register Volume 76, Number 96 (Wednesday, May 18, 2011)]
[Notices]
[Pages 28834-28836]
From the Federal Register Online via the Government Publishing 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 [email protected]. 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