[Federal Register Volume 77, Number 5 (Monday, January 9, 2012)]
[Notices]
[Pages 1101-1103]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-97]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66082; File No. SR-C2-2011-041]


Self-Regulatory Organizations; C2 Options Exchange, Incorporated; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Amend the Fees Schedule With Respect to Public Customer Maker/Taker 
Fee (Rebate) and Connectivity Charges

January 3, 2012.
    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 20, 2011, the C2 Options Exchange, Incorporated 
(``Exchange'' or ``C2'') 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 
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 Substance 
of the Proposed Rule Change

    C2 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'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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Fees Schedule. First, the 
Exchange proposes to amend its Maker and Taker fees and rebates with 
regards to Public Customer complex orders. Currently, the Exchange 
provides a Maker rebate of $0.25 per contract for such orders, and 
assesses no Taker fee. However, for competitive reasons, the Exchange 
desires to offer improved pricing for Public Customer complex orders. 
The International Securities Exchange, LLC (``ISE'') provides rebates 
of $0.30 per contract for both Makers and Takers for complex orders 
that trade with non-customer orders in select high-volume, competitive 
classes.\3\ The Exchange hereby proposes to provide a rebate of $0.35 
per contract for both Makers and Takers for complex orders, regardless 
of with whom such orders trade. By providing a higher rebate, and not 
limiting with whom such orders can trade nor in which classes the new 
rebates apply, the Exchange intends to attract a higher volume of 
customer trades and thereby provide other market participants with 
higher liquidity and greater trading opportunities.
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    \3\ See ISE Fee Schedule, page 18 (footnote 3).
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    The Exchange also proposes to increase the fees charged for access 
to a Network Access Port (1 Gigabyte) to $500 per month for regular 
access and $1000 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. ISE assesses a fee of $500 for network access up to and 
including 1 gigabyte.\4\ Chicago Board Options Exchange, Incorporated 
(``CBOE'') also recently submitted a proposed rule change to increase 
the fees charged for access to a Network Access Port (1 Gigabyte) to 
$500 per

[[Page 1102]]

month for regular access and $1000 per month for Sponsored User 
access.\5\
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    \4\ See ISE Schedule of Fees, page 9.
    \5\ See SR-CBOE-2011-121.
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    The Exchange also proposes to increase the fees charged for a CMI 
Login ID and FIX Login ID to $500 per month for regular access and 
$1000 per month for Sponsored User access. Firms may access C2 via 
either a CMI Client Application Server or a FIX Port, depending on how 
their systems are configured. As with the Network Access Port, the 
Exchange recently made a sizable investment to upgrade the equipment 
involved in the CMI Client Application Servers and FIX Ports, and 
thereby proposes to increase the fees in order to recoup such costs and 
maintain such equipment in the future. Moreover, these changes are in 
line with amounts assessed for connectivity at other exchanges. 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\ CBOE also recently submitted a 
proposed rule change proposes to increase the fees charged for a CMI 
Login ID and FIX Login ID to $500 per month for regular access and 
$1000 per month for Sponsored User access.\8\ 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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    \6\ See ISE Schedule of Fees, page 8 and SR-CBOE-2011-121.
    \7\ See NOM Rule 7053.
    \8\ See SR-CBOE-2011-121.
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    The proposed changes are to take effect January 1, 2012.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\9\ in general, and furthers the objectives of Section 6(b)(4) \10\ 
of the Act in particular, in that it is designed to provide for the 
equitable allocation of reasonable dues, fees, and other charges among 
Trading Permit Holders and other persons using Exchange facilities. The 
proposed change to increase the Maker and Taker rebates for Public 
Customer complex orders is reasonable because Public Customers will now 
be receiving a higher rebate than previously. This proposed change is 
equitable and not unfairly discriminatory because offering a greater 
rebate for such orders will attract more customer trading volume to the 
Exchange, and this greater volume and liquidity will benefit all market 
participants, including those non-Public Customer market participants 
who will now have more opportunities to trade with Public Customer 
orders. Further, this proposed change is in line with, and even more 
competitive than, the proposed fees on ISE for similar 
transactions.\11\
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4).
    \11\ See ISE Schedule of Fees, page 18.
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    The proposed change to increase the Network Access Port fees is 
reasonable because the fees are within the same range as those assessed 
on other exchanges,\12\ and because such increase will assist in 
recouping expenditures recently made by the Exchange to upgrade the 
connectivity equipment. This proposed change is equitable and not 
unfairly discriminatory because the fees, as before, will be assessed 
to all market participants. The proposed changes to increase the fees 
assessed for CMI Login IDs and FIX Login IDs are also reasonable 
because such fees are within the same range as those assessed on other 
exchanges,\13\ and because such increases will assist in recouping 
expenditures recently made by the Exchange to upgrade the 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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    \12\ See ISE Schedule of Fees, page 9.
    \13\ 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

    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 \14\ and subparagraph (f)(2) of Rule 19b-4 \15\ 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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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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-C2-2011-041 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-C2-2011-041. 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

[[Page 1103]]

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 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-C2-2011-041 and should be 
submitted on or before January 30, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-97 Filed 1-6-12; 8:45 am]
BILLING CODE 8011-01-P