[Federal Register Volume 76, Number 216 (Tuesday, November 8, 2011)]
[Notices]
[Pages 69313-69314]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-28830]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65668; File No. SR-C2-2011-032]


Self-Regulatory Organizations; C2 Options Exchange, Incorporated; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
to Amend Transaction Fees

November 2, 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 26, 2011, C2 Options Exchange, Incorporated (the 
``Exchange'' or ``C2'') 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 transaction fee. 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 its fees and rebates for straight 
one-sided orders in all multiply-listed, equity and ETF options 
classes. Specifically, the Exchange proposes to increase the Maker 
rebate to $0.37 per contract and the Taker fee to $.44 per contract for 
orders originating from public customers. The Exchange also proposes to 
increase the Maker rebate to $0.40 per contract and the Taker fee to 
$.45 per contract for orders originating from C2 Market-Makers, and 
increase the Maker rebate to $0.35 per contract and the Taker fee to 
$.45 per contract for orders originating from all other market 
participants.
    The purpose of the proposed change is to increase the Exchange's 
competitive position relative to other exchanges and attract order 
flow. The Exchange believes that the proposed changes to the Fees 
Schedule compare favorably to the pricing offered at other exchanges 
\3\ and will allow C2 to better compete for order flow.
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    \3\ See NYSE Arca, Inc. (``Arca'') Options Fee Schedule, page 3, 
BATS Exchange, Inc. (``BATS'') Fee Schedule, pages 2-3, and NASDAQ 
Options Market (``NOM'') Fees, page 1.
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    The proposed change is to take effect on November 1, 2011.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\4\ in general, and furthers the objectives of Section 6(b)(4) \5\ 
of the Act in particular, in that it is designed to provide for the 
equitable allocation of reasonable dues, fees, and other charges among 
C2 Trading Permit Holders and other persons using Exchange facilities. 
The amounts of the proposed fees and rebates for orders originating 
from public customers, C2 Market-Makers and all other market 
participants are reasonable because they are comparable to the amounts 
of such fees for similar executions on other exchanges.\6\
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
    \6\ See Note 3.
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    Offering a slightly higher Maker rebate for orders originating from 
C2

[[Page 69314]]

Market-Makers than those originating from other market participants 
(including public customers) is equitable and not unfairly 
discriminatory because C2 Market-Makers take on certain obligations to 
the Exchange (such as providing two-sided markets) that other market 
participants to not undertake. Offering a slightly higher Maker rebate 
for orders originating from public customers than those originating 
from other market participants (not including C2 Market-Makers) is 
equitable and not unfairly discriminatory because the Exchange believes 
this will attract public customer order flow to the Exchange and 
incentivize broker-dealers and firms to execute public customer orders 
on the Exchange. To the extent that this purpose is achieved, all of 
the Exchange's market participants should benefit from the improved 
market liquidity and the greater number of public customer orders with 
which to trade. Further, the Exchange believes that the proposed public 
customer Maker rebate is not unfairly discriminatory because the same 
rebate would be assessed uniformly to all public customers.
    Offering a slightly lower Taker fee for orders originating from 
public customers than for orders originating from other market 
participants is equitable and not unfairly discriminatory because the 
Exchange believes this will attract public customer order flow to the 
Exchange and incentivize broker-dealers and firms to execute public 
customer orders on the Exchange. To the extent that this purpose is 
achieved, all of the Exchange's market participants should benefit from 
the improved market liquidity and the greater number of public customer 
orders with which to trade. Further, the Exchange believes that the 
proposed public customer Taker fee is not unfairly discriminatory 
because the same fee would be assessed uniformly to all public 
customers. Also, a number of other exchanges offer different pricing 
for executions based on the type of market participant from which an 
order originates.\7\
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    \7\ See Note 3.
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    The Exchange operates in a highly competitive market in which 
sophisticated and knowledgeable market participants readily can, and 
do, send order flow to competing exchanges based on fee levels. The 
Exchange believes that the fees it assesses must be competitive with 
fees assessed on other options exchanges. The Exchange believes that 
this competitive marketplace impacts the fees present on the Exchange 
today and influences the proposals set forth above.

B. Self-Regulatory Organization's Statement on Burden on Competition

    C2 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 \8\ and subparagraph (f)(2) of Rule 19b-4 \9\ 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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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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 email to [email protected]. Please include 
File Number SR-C2-2011-032 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-C2-2011-032. This file 
number should be included on the subject line if email 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 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-C2-2011-032, and should be submitted on or before 
November 29, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-28830 Filed 11-7-11; 8:45 am]
BILLING CODE 8011-01-P