[Federal Register Volume 77, Number 3 (Thursday, January 5, 2012)]
[Notices]
[Pages 518-520]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-33789]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66067; File No. SR-CBOE-2011-127]


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

December 29, 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 December 20, 2011, Chicago Board Options Exchange, Incorporated 
(the ``Exchange'' or ``CBOE'') 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 the self-
regulatory organization. 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 Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the 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 
Office of the Secretary, 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

    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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    CBSX proposes to amend its CBOEdirect Connectivity Charges. 
Currently, the CBSX Fees Schedule applies CBOE's CBOEdirect 
Connectivity Charges to CBSX users.\3\ However, CBOE recently filed a 
proposed rule change to increase its CBOEdirect Connectivity 
Charges.\4\ Because CBSX does not desire to adopt all of the proposed 
changes to CBOE's CBOEdirect Connectivity Charges, CBSX hereby proposes 
to amend its Fees Schedule to adopt its own CBOEdirect Connectivity 
Charges.
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    \3\ See CBSX Fees Schedule, Section 1.
    \4\ See SR-CBOE-2011-121.
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    Currently, CBSX assesses a monthly Network Access Port fee of $250 
for regular access and $500 for Sponsored User access, as those are the 
amounts of the Network Access Port fees on CBOE. In SR-CBOE-2011-121, 
CBOE proposes to increase the fees charged for access to a Network 
Access Port to $500 per month for regular access and $1000 per month 
for Sponsored User access. CBSX desires to keep the Network Access Port 
fee rates at their current levels and not

[[Page 519]]

increase them to the levels proposed by CBOE.
    CBOE also proposes to increase their monthly CMI and FIX charges 
from $80 to $500 per month for regular access and $160 to $1000 per 
month for Sponsored User access.\5\ CBSX does not desire to adopt these 
increases. Instead, CBSX proposes to adopt more moderate increases, 
from $80 to $100 for regular access and $160 to $200 for Sponsored User 
access. Sizable investment [sic] were recently made to upgrade the 
equipment involved in the CMI Client Application Servers and FIX Ports, 
and thereby increasing these fees will help recoup such costs and 
maintain such equipment in the future. Moreover, following these 
changes, CBSX connectivity costs will still be lower than those 
assessed for connectivity at other exchanges. Along with the proposed 
CBOE changes, ISE assesses a FIX fee of $1200 for a minimum of two 
monthly login IDs (so, $600 for one), or a fee of $2,400 for a higher-
volume user.\6\ The NASDAQ Stock Market LLC's Options Market (``NOM'') 
assesses a fee of $500 per FIX port per month, as well.\7\ Regarding 
the Sponsored User fees, the Exchange currently charges a different 
rate for regular access and Sponsored User access, and merely proposes 
to increase the rates in equal proportion.
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    \5\ See SR-CBOE-2011-121.
    \6\ See ISE Schedule of Fees, page 8. The Commission notes that 
the ISE fees cited by the Exchange were modified as of December 1, 
2011. As of December 23, 2011, ISE assesses a FIX fee of $1000 for a 
minimum of two monthly login IDs and does not have a separate fee 
for a higher-volume user. See Securities Exchange Act Release No. 
65916 (December 8, 2011), 76 FR 77881 (December 14, 2011) (SR-ISE-
2011-80).
    \7\ See NOM Rule 7053.
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    The proposed changes are to take effect January 1, 2012.
2. Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\8\ in general, and furthers the objectives of Section 6(b)(4) \9\ 
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. The proposed ``change'' to add the Network Access Port fees 
into the CBSX Fees Schedule is reasonable because the amounts of the 
fees are not changing. This proposed ``change'' is equitable and not 
unfairly discriminatory because the fees, as before, will be assessed 
to all market participants, and in the same amounts as previously 
assessed.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
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    The proposed changes to increase the fees assessed for CMI Login 
IDs and FIX Login IDs are also reasonable because the amounts of such 
fees are significantly lower than those assessed on other 
exchanges,\10\ and because such increases will assist in recouping 
expenditures recently made to upgrade the CBOEdirect connectivity 
equipment. This proposed change is equitable and not unfairly 
discriminatory because the fees, as before, will be assessed to all 
market participants. 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.
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    \10\ See ISE Schedule of Fees, page 8 and NOM Rule 7053 and also 
SR-CBOE-2011-121.
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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 email to [email protected]. Please include 
File Number SR-CBOE-2011-127 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-2011-127. 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, 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-2011-127 and should be 
submitted on or before January 26, 2012.
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    \13\ 17 CFR 200.30-3(a)(12).


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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-33789 Filed 1-4-12; 8:45 am]
BILLING CODE 8011-01-P