[Federal Register Volume 76, Number 199 (Friday, October 14, 2011)]
[Notices]
[Pages 63974-63976]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-26533]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65519; File No. SR-CBOE-2011-094]


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

October 7, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on October 3, 2011, the Chicago Board Options Exchange, 
Incorporated (the ``Exchange'' or ``CBOE'') filed with the Securities 
and Exchange Commission (the ``Commission'') the proposed rule change 
as described in Items I, II, and III 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.
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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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend its 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 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, 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
    The Exchange proposes to amend the Fees Schedule related to monthly 
facility fees and CBOEdirect connectivity charges.
    The Exchange proposes to amend CBOEdirect connectivity charges to 
clarify that charges assessed for access to a Network Access Port are 
per gigabyte, for both regular access and Sponsored Users. Currently, 
access to such Network Access Ports is only available in one-gigabyte 
increments. However, in the future, the Exchange may offer faster 
access at a higher gigabyte level, and may elect to charge a higher 
rate for such access (as the infrastructure and equipment involved 
would be costlier). To the extent the Exchange does offer faster access 
at a higher gigabyte level, and assesses a higher rate, the Exchange 
will submit a rule filing prior to doing so. The Exchange therefore 
proposes to clarify that the current rates assessed are for one-
gigabyte access.
    The Exchange also proposes to increase the fees charged for such 
access to a Network Access Port $250 per month for regular access and 
$500 per month for Sponsored User access. The Exchange recently made a 
sizable investment to upgrade the equipment involved in the Network 
Access Port, and thereby proposes to increase the fees in order to 
recoup such costs and maintain such equipment in the future. The 
Exchange currently charges a different rate for regular access and 
Sponsored User access, and merely proposes to increase the rates in 
equal proportion. Moreover, this change in Network Access Port fees is 
in line with the amounts assessed for similar access at other 
exchanges. The International Securities Exchange, Inc. (``ISE'') 
assesses a fee of $500 for network access up to and including 1 
gigabyte.\3\
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    \3\ See ISE Schedule of Fees, page 9.
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    The Exchange also proposes to amend the Fees Schedule related to 
CBOEdirect connectivity charges to assess a fee for each CMI Login ID. 
Firms may access CBOEdirect via either a CMI Client Application Server 
or a FIX Port, depending on how their systems are configured. 
Currently, the Exchange assesses a fee for each CMI Client Application 
Server. However, a firm may have many users, using different Login IDs, 
accessing the same CMI Client Application Server, allowing the firm to 
only pay the monthly fee once. Alternatively, a firm may use the same 
Login ID to access different CMI Client Application Servers, thereby 
paying multiple times for the same Login ID. At the same time, FIX 
Ports are shared, and firms pay the monthly fee for access to FIX Ports 
on a per Login ID basis (though this is not currently clear on the Fees 
Schedule). As such, those firms who have many Login IDs but are

[[Page 63975]]

accessing the same CMI Client Application Server are avoiding paying a 
fee for each Login ID. The Exchange proposes to rectify this issue by 
charging for each CMI Login ID, and to clarify that access via a FIX 
Port is also per Login ID. The amounts of the rates are the same, so 
there would be no preference for firms using either access point. This 
change, too, would allow the Exchange to recoup some of the costs 
related to the investment in upgrading the connectivity equipment, as 
well as maintain this new equipment in the future.
    The Exchange also proposes to increase co-location fees to $50 per 
month per ``U'', or $100 per month per ``U'' for Sponsored Users (the 
term ``U'' is used to indicate an equipment unit 1.75'' high with a 
maximum power of 125 watts per U space). The Exchange recently upgraded 
this equipment as well, and the increased co-location fees would allow 
the Exchange to recoup some of the costs associated with this 
investment and maintain this upgraded equipment in the future. The 
amount of these fees is still lower than those assessed on a number of 
other exchanges. For example, NASDAQ OMX PHLX LLC (``Phlx'') charges a 
fee of $150 per U.\4\
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    \4\ See Phlx Fee Schedule, Section 6.
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    Finally, the Exchange proposes to add the CBOE Trading Floor 
Terminal fee to the Fees Schedule. The Exchange provides a physical 
computer terminal for brokers to access the CBOE trading systems. The 
purpose of the $250 per month fee for use of the terminals is to recoup 
the costs associated with purchasing and maintaining the terminals.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the Act 
\5\ in general, and furthers the objectives of Section 6(b)(4) \6\ 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 Exchange 
facilities.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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    The proposed change to increase co-location fees is reasonable 
because the new fees are still lower than those assessed on other 
exchanges \7\ and is equitable and not unfairly discriminatory because 
the fees, as before, will be assessed to all market participants.
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    \7\ See Note 4.
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    The proposed change to increase the Network Access Port fees and 
clarify that such fees are for 1 gigabyte access is reasonable because 
the fees are within the same range as those assessed on other 
exchanges.\8\ This proposed change is equitable and not unfairly 
discriminatory because the fees, as before, will be assessed to all 
market participants.
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    \8\ See Note 3.
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    The proposed change to assess CMI CBOEdirect connectivity charges 
based on Login ID, as opposed to Client Application Server, is 
reasonable because the fees for such connectivity, on a per Login ID 
basis, will be the same as those for FIX connectivity, and is equitable 
and not unfairly discriminatory because market participants desiring 
connectivity will now be paying the same amount for a connection via 
either FIX or CMI.
    Assessing higher fees for Sponsored Users is equitable and not 
unfairly discriminatory because Sponsored Users are able to access the 
Exchange and use the equipment provided without purchasing a trading 
permit. As such, Trading Permit Holders who have purchased a trading 
permit will have a higher level of commitment to transacting business 
on the Exchange and using Exchange facilities than Sponsored Users.
    The proposed change to add the CBOE Trading Floor Terminal fee to 
the Fees Schedule is reasonable because the amount is within the range 
of other fees assessed for trading floor terminal rental \9\ and is 
equitable and not unfairly discriminatory because the fee will be 
assessed to all market participants.
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    \9\ See Exchange Fees Schedule, Section 8(F)(10).
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    Finally, the proposed change to clarify that the Exchange fees for 
FIX connectivity are assessed on a per Login ID basis furthers the 
objectives of Section 6(b)(5) \10\ of the Act in particular, in that it 
is designed to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest, by eliminating any confusion 
regarding the basis on which such fees are assessed.
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    \10\ 15 U.S.C. 78f(b)(5).
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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 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 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) 
of the Act \11\ and subparagraph (f)(2) of Rule 19b-4 \12\ 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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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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-2011-094 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-2011-094. 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

[[Page 63976]]

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 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 offices 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-2011-094, and should be submitted on or before November 4, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-26533 Filed 10-13-11; 8:45 am]
BILLING CODE 8011-01-P