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Notice

Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Chicago Board Options Exchange Stock Exchange Fees Schedule

 

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January 6, 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 December 30, 2009, the Chicago Board Options Exchange, Incorporated (“Exchange” or “CBOE”) 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 the Exchange. 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 Back to Top

The Exchange proposes to amend its CBOE Stock Exchange (“CBSX”) Fees Schedule. The text of the proposed rule change is available on the Exchange's Web site (http://www.cboe.org/legal), at the Exchange's principal office, on the Commission's Web site (http://www.sec.gov), 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 Back to Top

In its filing with the Commission, the self-regulatory organization 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 those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change

1. Purpose

CBSX proposes to make fee modifications in order to better attract business to the exchange. Specifically, CBSX proposes to change to $0.0030 per share its Taker Fee and Routing Fee applicable to transactions of securities priced at $1 or greater. CBSX proposes to change to 0.30% (of the dollar value of the transaction) its Taker Fee and Routing Fee for transactions in securities priced less than $1. CBSX proposes to change to $0.0025 per share the rebate for Makers, applicable to transactions in securities priced at $1 or greater.

CBSX also proposes to change the fee rates applicable to stock executions effected pursuant to Rules 6.53C, 6.74A.07 and 6.74B.01. Rule 6.53C is CBOE's complex order auction (COA) and book (COB) rule. The COA system facilitates the handling and execution of complex orders by allowing for complex orders to rest in the system and allowing for inbound complex orders to trigger an auction where auction participants may submit complex order responses to trade with the order that is being auctioned. Some complex orders contain a stock component (e.g. a buy-write order), and the stock component of a stock-option complex order handled by the system is executed on CBSX. This filing changes the rate applicable to the stock executions that result from stock-option orders trading pursuant to Rule 6.53C as follows: the order that triggered a COA auction or that triggered a trade with a resting COB order shall be charged $0.0020 per share subject to a $2.00 minimum charge (the $25.00 maximum charge will remain unchanged).

Rule 6.74A.07 is CBOE's Automated Improvement Mechanism (AIM) rule for complex orders. It allows complex orders (including stock-option orders) to be crossed after an electronic auction. Rule 6.74B.01 is the Solicitation Auction Mechanism. It allows for the execution of large size complex orders against solicited orders. Any stock executions resulting from orders processed through these mechanisms are handled on CBSX. This filing changes the rate applicable to the stock executions that result from stock-option orders trading pursuant to Rule 6.74A.07 and 6.74B.01 as follows: $0.0020 per share subject to a $2.00 minimum charge and $25.00 maximum charge (the $25.00 maximum charge will remain unchanged).

Lastly, this filing eliminates the CBSX market data rebate program. CBSX will cease issuing tape credits.

The fee changes will take effect on January 4, 2010.

2. Statutory Basis

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 members and other persons using its facilities.

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 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 Back to Top

The proposed rule change is designated by the Exchange as establishing or changing a due, fee, or other charge, thereby qualifying for effectiveness on filing pursuant to Section 19(b)(3)(A)(ii) of the Act [5] and subparagraph (f)(2) of Rule 19b-4 thereunder. [6] At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate 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.

IV. Solicitation of Comments Back to Top

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

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-2009-102. 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 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 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 Number SR-CBOE-2009-102 and should be submitted on or before February 4, 2010.

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. [7]

Florence E. Harmon,

Deputy Secretary.

[FR Doc. 2010-540 Filed 1-13-10; 8:45 am]

BILLING CODE 8011-01-P

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