Exchange. Bulletin. January 13, 2012 Volume 40, Number 2 TRADING PERMIT INFORMATION FOR 01/05/2012 THROUGH 01/11/2012

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1 Exchange January 13, 2012 Volume 40, Number 2 Bulletin The Bylaws and Rules of Chicago Board Options Exchange, Incorporated ( Exchange ), in certain specific instances, require the Exchange to provide notice to Exchange Trading Permit Holders. To satisfy this requirement, a copy of the Exchange Bulletin, including the Regulatory Bulletin, is delivered by or by hard copy free of charge to all effective Trading Permit Holders on a weekly basis. Trading Permit Holders are encouraged to receive the Exchange and Regulatory Bulletin and Information Circulars via . subscriptions may be obtained by Trading Permit Holders by submitting your name, firm if applicable, address, and phone number, to registration@cboe.com. If you do sign up for delivery, please remember to inform the Registration Services Department of address changes. Subscriptions by Trading Permit Holders for hard copy delivery may be obtained by submitting your name, firm if any, mailing address and telephone number to: Chicago Board Options Exchange, Registration Services Department, 400 South LaSalle, Chicago, Illinois 60605, Attention: Bulletin Subscriptions. Copyright 2012 Chicago Board Options Exchange, Incorporated TRADING PERMIT INFORMATION FOR 01/05/2012 THROUGH 01/11/2012 TRADING PERMIT APPLICATIONS RECEIVED FOR WHICH BULLETIN PUBLICATION IS REQUIRED Individual Applicants Robert V Patel WSP Commodity Trading LLC 728 S Taylor Oak Park, IL Michael R. Moore VTrader Pro, LLC 950 W. Monroe, Unit 508 Chicago, IL Matthew S. Donovan Donovan, Schayer, & Massey Trading, LLC 440 N. Wabash, Unit 1204 Chicago, IL TPH Organization Applicants Quantum Edge Derivatives Trading, LLC 370 Lexington Ave., Suite 308 New York, NY Yee, Jimmy - Member Eisenberg, Richard A. - FINOP Trinity Capital Research, LLC - Sole Member TERMINATIONS Individuals Nominee: Everett K. Perry (EVT) 1/9/12 Group One Trading, L.P. Stanley Choung 1/11/12 Morgan Stanley & Co. LLC Termination Date EFFECTIVE TRADING PERMIT HOLDERS Individuals Nominee: Malachy G Lacy (MAL) 1/5/12 G-Bar Limited Partnership Type of Business to be Conducted: Market Maker Thomas M. Lang (TTN) 1/9/12 IMC Financial Markets Type of Business to be Conducted: Market Maker William J. Babiarz (BBB) 1/9/12 IMC Financial Markets Type of Business to be Conducted: Market Maker Effective Date

2 Page 2 January 13, 2012 Volume 40, Number 2 Chicago Board Options Exchange RESEARCH CIRCULARS The following Research Circulars were distributed between January 6 and January 12, If you wish to read the entire document, please refer to the CBOE website at and click on the Trading Tools Tab. New listings and series information is also available in the Trading Tools section of the website. For questions regarding information discussed in a Research Circular, please call The Options Clearing Corporation at OPTIONS. Research Circular #RS January 6, 2012 Hansen Natural Corporation ( HANS ) Name, Stock and Option Symbol Change to Monster Beverage Corporation ( MNST ) Effective Date: Monday, January 9, 2012 Research Circular #RS January 6, 2011 Biotech HOLDRs Trust ( BBHH ) Change in Marketplace and Underlying Symbol and Option Symbol Change to BBHYL Effective Date: January 9, 2012 Research Circular #RS January 6, 2011 Retail HOLDRs Trust ( RTHH ) Change in Marketplace and Underlying Symbol and Option Symbol Change to RTHYL Effective Date: January 9, 2012 Research Circular #RS January 9, 2012 *****UPDATE*****UPDATE*****UPDATE***** Sears Holdings Corporation ( SHLD & adj. SHLD1 ) Research Circular #C2-RS January 9, 2012 *****UPDATE*****UPDATE*****UPDATE***** Sears Holdings Corporation ( SHLD & adj. SHLD1 ) Research Circular #RS January 10, 2012 Cabot Oil & Gas Corporation ( COG ) 2-for-1 Stock Split Ex-Distribution Date: January 26, 2012 Research Circular #RS January 10, 2012 The TJX Companies, Inc. ( TJX ) 2-for-1 Stock Split Ex-Distribution Date: February 3, 2012 Research Circular #RS January 11, 2012 Telephone and Data Systems, Inc. ( TDS ) Share Consolidation Subject to Shareholder Approval Shareholder Meeting Date: January 13, 2012 Research Circular #RS January 12, 2012 *****UPDATE*****UPDATE*****UPDATE***** General Growth Properties, Inc. ( GGP & adj. GGP1 ) Distribution of Shares of Rouse Properties, Inc. ( RSE ) Ex-Distribution Date: January 13, 2012 Research Circular #C2-RS January 12, 2012 *****UPDATE*****UPDATE*****UPDATE***** General Growth Properties, Inc. ( GGP ) Distribution of Shares of Rouse Properties, Inc. ( RSE ) Ex-Distribution Date: January 13, 2012 Research Circular #RS January 12, 2012 Shanda Games Limited ( GAME ) CONTRACT ADJUSTMENT FOR SPECIAL CASH DIVIDEND Ex-Date: January 23, 2012 POSITION LIMIT CIRCULARS Pursuant to Exchange Rule 4.11, the Exchange issued the below listed Position Limit Circular on January 9, The complete circulars are available from the Department of Market Regulation, in the data information bins on the 2nd Floor of the Exchange, and on the CBOE website at cboe.com under the Market Data tab. To receive regular updates or position limit questions can be directed to Regulatory Services at (312) or (312) Position Limit Circular PL12-01 January 9, 2012 Exchange Traded Fund, HOLDRs and Equity Position and Exercise Limits will be decreased to a Lower Tier Limit Effective January 23, 2012 Position Limit Circular PL12-02 January 9, 2012 Adjusted Position and Exercise Limits for certain Equity Option Classes will revert to either their Applicable Standard or Adjusted Position and Exercise Limits effective January 23, 2012

3 January 13, 2012 Volume RB23, Number 2 The Bylaws and Rules of Chicago Board Options Exchange, Incorporated ( Exchange ), in certain specific instances, require the Exchange to provide notice to Trading Permit Holders. The weekly Regulatory Bulletin is delivered to all effective Trading Permit Holders to satisfy this requirement. Copyright 2012 Chicago Board Options Exchange, Incorporated. Regulatory Circular RG REGULATORY CIRCULARS To: Trading Permit Holders From: Market Quality and Allocation Department Date: January 6, 2012 Re: Relocation of ETF Option Classes from Post 6, Station 4 to Post 6, Station 6 The Exchange has received a request from Timber Hill, LLC to relocate the following option classes from P6S4 to P6S6: UNDLY NAME 1 XLE ENERGY SECTOR SPDR 2 XRT SPDR S&P RETAIL ETF 3 XLB SELECT SECTOR SPDR FD-MATERIALS 4 XLK TECHNOLOGY SECTOR SPDR 5 XLU UTILITIES SECTOR SPDR 6 XLV SELECT SECTOR SPDR FUND-HEALTH CARE 7 XLP CONSUMER STAPLES SECTOR SPDR January 13, 2012 Volume RB23, Number 2 1

4 8 MDY S&P MIDCAP SPDR (ETF) 9 IBB ISHARES NASDAQ BIOTECH INDX FD 10 DVY ISHARES DOW JONES SELECT DIVIDEND I 11 FXC CURRENCYSHARES CANADIAN DOLLAR TR S 12 IWR ISHARES RUSSELL MIDCAP INDEX FUND 13 ICF ISHARE COHEN&STEERS RLTY MAJOR 14 IYZ ISHARES DJ US TELECOM INDEX 15 FCG 1 st TRUST ISE-REVERE NATURAL GAS 16 IEO ISHARES DOW JONES US OIL & GAS EXPLORATION & PRODUCTION INDEX FUND Pursuant to Rule 8.95, the Exchange is responsible for determining the location on the Exchange s trading floor of each trading crowd, DPM, and security traded on CBOE. Therefore, CBOE has determined to relocate the above classes from Post 6S4 to P6S6. Timber Hill, LLC will continue to act as the DPM in these option classes numbered 1 through 14 above. Citadel Securities, LLC will continue to operate as the Off-Floor DPM in FCG and IEO. Timber Hill, LLC will continue to act as the On-Floor LMM in FCG and IEO. The relocation will become effective on Tuesday, January 10, Please contact Allison Kile at (312) or via at kilea@cboe.com with any questions. (Updates Regulatory Circular RG11-166) Regulatory Circular RG DATE: January 6, 2012 TO: FROM: RE: Trading Permit Holders Market Operations Department Restrictions on Transactions in Retail HOLDRs Trust (RTHH) Effective January 9, 2012, trading in Retail HOLDRs Trust (RTHH) will commence on the Other OTC market under the symbol RTHYL. Trading on the CBOE in existing series of RTHYL options will be subject to the following restrictions. Only closing transactions may be affected in any series of RTHYL options except for (i) opening transactions by Market-Makers executed to accommodate closing transactions of other market January 13, 2012 Volume RB23, Number 2 2

5 participants and (ii) opening transactions by CBOE TPH organizations to facilitate the closing transactions of public customers executed as crosses pursuant to and in accordance with CBOE Rule 6.74(b) or (d). The execution of opening transactions in RTHYL options, except as permitted above, and/or the misrepresentation as to whether an order is opening or closing, will constitute a violation of CBOE rules, and may result in disciplinary action. TPH organizations should ensure that they have appropriate procedures in place to prevent their customers from entering opening orders in this restricted option class. In addition, transactions in contravention of this restriction may be subject to nullification pursuant to Exchange Rule There are no restrictions in place with respect to the exercise of RTHYL options. The provisions of this circular apply to any options on RTHYL traded on CBOE. Any questions regarding this circular may be directed to Kerry Winters at (312) or Regulatory Services Division at (312) or (312) CBOE restricted class memos can be accessed from CBOE.org at the following web address: Regulatory Circular RG DATE: January 6, 2012 TO: FROM: RE: Trading Permit Holders Market Operations Department Restrictions on Transactions in Biotech HOLDRs Trust Deposit Receipts (BBHH) Effective January 9, 2012, trading in Biotech HOLDRs Trust Deposit Receipts (BBHH) will commence on the Other OTC market under the symbol BBHYL. Trading on the CBOE in existing series of BBHYL options will be subject to the following restrictions. Only closing transactions may be affected in any series of BBHYL options except for (i) opening transactions by Market-Makers executed to accommodate closing transactions of other market participants and (ii) opening transactions by CBOE TPH organizations to facilitate the closing transactions of public customers executed as crosses pursuant to and in accordance with CBOE Rule 6.74(b) or (d). The execution of opening transactions in BBHYL options, except as permitted above, and/or the misrepresentation as to whether an order is opening or closing, will constitute a violation of CBOE rules, and may result in disciplinary action. TPH organizations should ensure that they have appropriate procedures in place to prevent their customers from entering opening orders in this restricted option class. In addition, transactions in contravention of this restriction may be subject to nullification pursuant to Exchange Rule There are no restrictions in place with respect to the exercise of BBHYL options. The provisions of this circular apply to any options on BBHYL traded on CBOE. January 13, 2012 Volume RB23, Number 2 3

6 Any questions regarding this circular may be directed to Kerry Winters at (312) or Regulatory Services Division at (312) or (312) CBOE restricted class memos can be accessed from CBOE.org at the following web address: Regulatory Circular RG To: Trading Permit Holders From: Finance and Administration Date: January 6, 2012 Re: Extension of the date for Prepayment Elections under the 2012 Liquidity Provider Sliding Scale For Liquidity Provider s interested in participating in the sliding scale for all of 2012, prepayment elections and wired payments must be received by the close of business on January 20, Prepayment questions may be directed to Don Patton at (312) or patton@cboe.com, Colleen Laughlin at or Laughlin@cboe.com or John Mavindidze at (312) or mavindidze@cboe.com. Regulatory Circular RG Date: January 12, 2012 To: From: Re: Trading Permit Holders and Trading Permit Holder Applicants Registration Services Department Trading Permit Holder Application and Other Related Fees The Exchange is reissuing the 2012 Trading Permit Holder Application and Other Related Fees Circular to correct the amounts of the fees listed under the Market-Maker Trading Permit Sliding Scale (the previous version of this circular did not reflect the changes to these fees). The corrected fees are listed in the table labeled Market-Maker Trading Permit Sliding Scale on page 6 of this circular. Otherwise, the content of the 2012 Trading Permit Holder Application and Other Related Fees Circular remains unchanged. This circular replaces CBOE Regulatory Circular RG January 13, 2012 Volume RB23, Number 2 4

7 The following is a list of the Exchange's Trading Permit Holder application fees and other related fees, together with a brief explanation of each fee, revised to reflect changes to the Fees Schedule for These changes took effect on January 1, List of Fees Individual Applicant Fee (Trading Permit Holder/Nominee)... $3,000 New Trading Permit Holder Orientation & Exam Fee... $500 TPH Organization Application Fee (Corporation/Partnership/LLC)... $5,000 TPH Organization Renewal Fee (Corporation/Partnership/LLC)... $2,500 Associated Person Fee... $500 Fingerprint Processing Fee... $60 Renewal/Change of Status Fee... $500 Initial Proprietary Registration... $50 Annual Proprietary Registration... $25 Inactive Nominee Status Change (Trading Permit Swap) Fee Submission before 4:00 p.m. on date prior to effective date... $55 Submission after 4:00 p.m. on date prior to effective date or before 8:00 a.m. on effective date... $110 Submission after 8:00 a.m. on effective date... $220 Inactive Nominee Status (Parking Space) Quarterly Maintenance Fee... $900 Joint Account Application Fee... $1,000 Trading Permit Transfer Fee... $500 Non-Trading Permit Holder Customer Business Fee... $3,000 Order Service Firm Fee... $1,650 Applicant/Trading Permit Holder/Associated Person Subject to Statutory Disqualification... $5,000 Change in Status that, if Approved, Would Require Amended or Additional Rule 19h-1(c) Filing... $1,650 Market-Maker Trading Permit Fee* (monthly fee amount)... $5,500 *A Trading Permit Holder may elect to participate in the Market-Maker Trading Permit Sliding Scale set forth in the description below. Floor Broker Trading Permit Fee** (monthly fee amount)... $9,000 ** A Floor Broker Trading Permit Holder may elect to participate in the Floor Broker Trading Permit Sliding Scale set forth in the description below. Also, an additional monthly fee of $2,000 per month will be assessed to any Floor Broker Trading Permit Holder that executes more than 20,000 VIX contracts during the month, and an additional monthly fee of $3,000 per month will be assessed to any Floor Broker Trading Permit Holder that executes more than 20,000 SPX contracts during the month. Electronic Access Permit Fee (monthly fee amount)... $1,600 SPX Tier Appointment Fee (monthly fee amount).$3,000 VIX Tier Appointment Fee (monthly fee amount)... $2,000 Quoting and Order Entry Bandwidth Packet Fee (monthly fee amount)... $2,750 Order Entry Bandwidth Packet Fee See the Tables Below Order Entry Bandwidth Packet Fees for Trading Permit Holders Amount per Packet 1 st 5 th Packet $1,600 per month January 13, 2012 Volume RB23, Number 2 5

8 6 th 8 th Packet $ 800 per month 9 th 13 th Packet $ 400 per month 14 th Packet and Each Additional Packet $ 200 per month Fees for Order Entry Bandwidth Assigned to Sponsored User Packet(s) Amount per Packet 1 st 6 th Packet $1,600 per month 7 th 9 th Packet $ 800 per month 10 th 14 th Packet $ 400 per month 15 th Packet and Each Additional Packet $ 200 per month ALL FEES ARE NON-REFUNDABLE Individual Applicant Fee (Trading Permit Holder/Nominee) - This fee is payable by a new individual applicant for Trading Permit Holder status on the Exchange. The applicant s Fingerprint Processing Fee is included as part of this fee. New Trading Permit Holder Orientation & Exam Fee - This fee is payable by each applicant seeking Trading Permit Holder status, which requires a trading function. TPH Organization Application Fee (Corporation/Partnership/LLC) - This fee is payable by an applicant that desires to be a TPH organization on the Exchange. This fee encompasses the TPH Organization Application and related documentation, one Nominee Individual Application Fee associated with the TPH Organization Application, and Associated Person(s) Fees that are part of this TPH Organization Application. TPH Organization Renewal Fee (Corporation/Partnership/LLC) - This fee is payable by a former trading firm member or TPH organization that reapplies for Trading Permit Holder status within 9 months of their membership or Trading Permit Status termination date and becomes an effective TPH organization within 1 year of their membership or Trading Permit Status termination date. This fee encompasses the TPH Organization Application and related documentation and one Nominee who is either (i) an existing individual Trading Permit Holder desiring to change Trading Permit Holder status or (ii) a former individual member or Trading Permit Holder who reapplies for Trading Permit Holder status within 9 months of their membership or Trading Permit Status termination date and becomes an effective Trading Permit Holder within 1 year of their membership termination date. January 13, 2012 Volume RB23, Number 2 6

9 Associated Person Fee - The Associated Person Fee is payable for the addition of certain individuals on a TPH organization s Form BD. This fee includes the related Fingerprint Processing Fee. This Fee is payable by each executive officer, general partner, or LLC Manager. Additionally, this Fee is payable by each principal shareholder that has 5% or more direct ownership of a class of a voting security of a TPH organization corporation, limited partner who has the right to receive upon dissolution, or has contributed, 5% or more of the partnership's capital, and LLC member who has the right to receive upon dissolution, or has contributed, 5% or more of the LLC's capital. This Fee is also payable by any person classified as a Control Person of the TPH organization. Fingerprint Processing Fee - This Fee will be assessed for employees of Trading Permit Holders and any other individual requesting the Exchange to process a fingerprint, electronically or otherwise, excluding fingerprint requirements for Individual Applicants, individuals applying for Renewal/Change of Status, and Associated Persons subject to the Associated Person Fee set forth above. Renewal/Change of Status Fee - This fee is payable (i) by an existing individual Trading Permit Holder desiring to change Trading Permit Holder status or (ii) by a former individual Trading Permit Holder or former individual member who reapplies for Trading Permit Holder status within 9 months of their membership or Trading Permit Holder status termination date and becomes an effective Trading Permit Holder within 1 year of their membership or Trading Permit Holder status termination date. A former individual Trading Permit Holder or former individual member who reapplies for Trading Permit Holder status within 9 months of termination from membership or Trading Permit Holder status will be assessed the Renewal/Change of Status fee at the time of submission of the application. If that person becomes an effective Trading Permit Holder more than 1 year after their membership or Trading Permit Holder status termination date, the person will then be charged an additional fee equal to the difference between the Individual Application Fee and the Renewal/Change of Status fee. This Fee includes the related Fingerprint Processing Fee, if applicable. Initial Proprietary Registration Fee This fee is payable by any TPH organization to register any associated person on WebCRD with the Proprietary Trader registration. Annual Proprietary Registration Fee This fee is payable annually by any TPH organization for each associated person that the TPH organization maintains registered on WebCRD with the Proprietary Trader registration. Inactive Nominee Status Change (Trading Permit Swap) Fee - This fee is payable whenever an inactive nominee moves to active status. The amount of this fee varies in accordance with when the Registration Services Department receives notice of the status change via the submission of a Notification of Change in Nominee Status Form. If the Notification Form is submitted before 4:00 p.m. on the date prior to the effective date of the status change, the fee is $55. If the Notification Form is submitted after 4:00 p.m. on the date prior to the effective date of the status change or before 8:00 a.m. on the effective date of the status change, the fee is $110. If the Notification Form is submitted after 8:00 a.m. on the effective date of the status change, the fee is $220. No fee applies to moves from active to inactive status. Inactive Nominee Status (Parking Space) Quarterly Maintenance Fee - This fee is payable quarterly by a TPH organization for each inactive nominee status that the TPH organization wishes to maintain. (E.g., a January 13, 2012 Volume RB23, Number 2 7

10 TPH organization firm desiring the ability to have 3 parking spaces within which to designate inactive nominees would pay this fee at the beginning of each quarter for each of the 3 parking spaces.) Joint Account Application Fee - This fee is payable for each application to establish a new joint account. Trading Permit Transfer Fee - This Fee is assessed to a Trading Permit Holder for each Trading Permit for which the Registration Services Department has received a request for transfer under CBOE Rule 3.1(d)(ii). There is a $2,000 Fee cap for a request covering multiple Trading Permits per transfer. Non-Trading Permit Holder Customer Business Fee - This fee is payable by applicant TPH organizations that plan to conduct a public customer business. Order Service Firm Fee - This fee is payable by applicant firms that plan to conduct an order service business pursuant to CBOE Rule Applicant/Trading Permit Holder/Associated Person Subject to Statutory Disqualification - This fee is payable whenever a person or entity is subject to a statutory disqualification under the Securities Exchange Act of 1934 and: (i) is an applicant for Exchange Trading Permit Holder status, (ii) is seeking to be an associated person of an Exchange Trading Permit Holder (except where the Exchange is merely asked to concur in an SEC Rule 19h-1 filing by another self regulatory organization), or (iii) is an existing Exchange Trading Permit Holder or associated person who makes an application in accordance with Rule 3.18(b) or with respect to whom a proceeding is initiated pursuant to Rule This fee is in addition to any other Trading Permit-related fees that might be applicable. Change in Status that, if Approved, Would Require Amended or Additional SEC Rule 19h-1(c) Filing - This fee is payable whenever a person or entity, on whose behalf the Exchange has filed a Rule 19h-1(c) filing that has been approved by the SEC, applies for a change in status that requires the Exchange to file an amended or additional Rule 19h-1(c) filing, if the Exchange approves the requested change in status. This fee is in addition to any other Trading Permit-related fees that might be applicable. Cap on Trading Permit-Related Fees for Organizational Restructuring Trading Permit application fees and other Trading Permit-related fees related solely to a TPH organization structural change (e.g., related to a change from a limited partnership to a limited liability company and not to use of additional Trading Permits) are capped at $10,000. Market-Maker Trading Permit Fee This fee will be assessed monthly to each Market-Maker Trading Permit Holder. The Market-Maker Trading Permit entitles the holder to act as a Market-Maker (including a Market-Maker trading remotely), DPM, edpm or LMM. This Permit provides an appointment credit of 1.0, a quoting and order entry bandwidth allowance, up to three logins, trading floor access and Trading Permit Holder status (including access to CBSX). If a Market-Maker Trading Permit is issued during a calendar month after the first trading day of the month, the access fee for the Market-Maker Trading Permit for that calendar month is prorated based on the remaining trading days in the calendar month. Market-Maker Trading Permits will be renewed automatically for the next month unless the Trading Permit Holder submits written notification to the Registration Services Department by the 25 th day of the prior month (or the preceding business day if the 25 th is not a business day) to cancel the Market-Maker Trading Permit effective at or prior to the end of the applicable month. January 13, 2012 Volume RB23, Number 2 8

11 To the extent a Market-Maker is able to submit electronic quotes in a Hybrid 3.0 class (such as an LMM that streams quotes in the class or a Market-Maker or LMM that streams quotes in a series of a Hybrid 3.0 class that trades on the Hybrid Trading System), the Market-Maker shall receive the quoting bandwidth allowance to quote in, and only in, that class. A Trading Permit Holder may elect to participate in the Market-Maker Trading Permit Sliding Scale set forth below. The following sliding scale will be available for all Market-Maker Trading Permits held by affiliated Trading Permit Holders and TPH organizations that are used for appointments in any options classes other than SPX, VIX, OEX and XEO. Any Market-Maker Trading Permits used for these four classes, whether in whole or in part, are excluded from this sliding scale and will be priced at $5,500/month. To qualify for the rates set forth in Tiers 1 and 2 in the sliding scale, the applicable Trading Permit Holder(s) and/or TPH organization(s) must commit in advance to a specific tier that includes a minimum number of eligible Market-Maker Trading Permits for each calendar year. To do so, a Market-Maker Trading Permit Holder must notify the Registration Services Department by December 25th (or the preceding business day if the 25 th is not a business day) of the year prior to each year in which the Market Maker Trading Permit Holder would like to commit to this sliding scale of the Tier of eligible Market-Maker Trading Permits committed to by that Market-Maker Trading Permit Holder for that year. Market-Makers are not obligated to commit to either tier. However, the discounts will apply only to those that do commit to Tier 1 or Tier 2 for the calendar year. Trading Permit Holders that are not eligible for and/or do not commit to Tier 1 or Tier 2 will pay the standard rate for each Market-Maker Trading Permit, regardless of the total number of Market-Maker Trading Permits used. Market-Maker Trading Permit Sliding Scale (as corrected in this circular) From To Amount per Month per Permit 1 permit 10 permits $5,500 Tier 1 11 permits 20 permits $4,000 Tier 2 21 or more permits $2,500 If a Trading Permit Holder chooses to commit in advance to either Tier 1 or Tier 2, that Trading Permit Holder will be responsible for the minimum number of permits in the commitment tier for the remainder of the calendar year. Even if a Trading Permit Holder does not maintain the minimum level of eligible Trading Permits in the tier, that Trading Permit Holder is still responsible for the minimum payment for that commitment tier for the remainder of the calendar year. For example, a Trading Permit Holder that commits to eleven eligible permits per month will be subject to a minimum monthly access fee of $59,000 (10 x $5,500 plus $4,000 = $59,000) for that calendar year. Any additional Permits will increase the fee by the applicable amount. January 13, 2012 Volume RB23, Number 2 9

12 Trading Permit Holders will be able to commit to a higher tier of the sliding scale for the remainder of a calendar year, during a commitment year, if the Trading Permit Holder obtains enough eligible Market- Maker Trading Permits and provides written notification to the Registration Services Department by the 25 th day of the month preceding the month in which the higher tier will be effective (or the preceding business day if the 25 th is not a business day). For example, a Trading Permit Holder may provide written notice to commit to Tier 1 effective July 1 for the remainder of the calendar year as long as the Trading Permit Holder obtains enough eligible Trading Permits and provides written notice by June 25 th that the Trading Permit Holder would like to participate in the sliding scale starting in July for the remainder of that calendar year. Even if that Trading Permit Holder subsequently falls below the minimum number of eligible Market-Maker Trading Permits (in the committed calendar year), for the committed tier, the Trading Permit Holder will remain responsible for paying for the tier minimum for the remainder of the calendar year. Trading Permit Holders will be responsible to pay for at least the minimum amount of eligible Market- Maker Trading Permits in the committed tier for the calendar year on a monthly basis unless the Trading Permit Holder entirely terminates as a Trading Permit Holder during the year. If a Trading Permit Holder combines, merges, or is acquired during the course of the calendar year, the surviving Trading Permit Holder will maintain responsibility for the committed number of eligible Market-Maker Trading Permits. Floor Broker Trading Permit Fee This fee will be assessed monthly to each Floor Broker Trading Permit Holder. The Floor Broker Trading Permit entitles the holder to act as a Floor Broker. This Permit provides an order entry bandwidth allowance, up to three logins, trading floor access and Trading Permit Holder Status (including access to CBSX). If a Floor Broker Trading Permit is issued during a calendar month after the first trading day of the month, the access fee for the Floor Broker Trading Permit for that calendar month is prorated based on the remaining trading days in the calendar month. Floor Broker Trading Permits will be renewed automatically for the next month unless the Trading Permit Holder submits written notification to the Registration Services Department by the 25 th day of the prior month (or the preceding business day if the 25 th is not a business day) to cancel the Floor Broker Trading Permit effective at or prior to the end of the applicable month. A Floor Broker Trading Permit Holder may elect to participate in the Floor Broker Trading Permit Sliding Scale set forth below. The following sliding scale will be available for all Floor Broker Trading Permits held by affiliated Trading Permit Holders and TPH organizations. To qualify for the rates set forth in Tiers 1 and 2 in the sliding scale, the applicable Trading Permit Holder(s) and/or TPH organization(s) must commit in advance to a specific tier that includes a minimum number of eligible Floor Broker Trading Permits for each calendar year. To do so, a Floor Broker Trading Permit Holder must notify the Registration Services Department by December 25th (or the preceding business day if the 25 th is not a business day) of the year prior to each year in which the Floor Broker Trading Permit Holder would like to commit to this sliding scale of the Tier of eligible Floor Broker Trading Permits committed to by that Floor Broker Trading Permit Holder for that year. Floor Brokers are not obligated to commit to either tier. However, the discounts will apply only to those that do commit to Tier 1 or Tier 2 for the calendar year. Trading Permit Holders that are not eligible for and/or do not commit to Tier 1 or Tier 2 January 13, 2012 Volume RB23, Number 2 10

13 will pay the standard rate of $9,000 for each Floor Broker Trading Permit, regardless of the total number of Floor Broker Trading Permits used. From To Amount per Month per Permit 1 permit 1 permit $9,000 Tier 1 2 permits 7 permits $6,000 Tier 2 8 or more permits $3,000 If a Trading Permit Holder chooses to commit to either Tier 1 or Tier 2, that Trading Permit Holder will be responsible for the minimum number of permits in the commitment tier for the remainder of the calendar year. Even if a Trading Permit Holder does not maintain the minimum level of eligible Trading Permits in the tier, that Trading Permit Holder is still responsible for the minimum payment for that commitment tier for the remainder of the calendar year. For example, a Trading Permit Holder that commits to eight eligible permits per month will be subject to a minimum monthly access fee of $48,000 (1 at $9,000 plus 6 at $6,000 plus 1 at $3,000 = $48,000) for that calendar year. Any additional Permits will increase the fee by the applicable amount. Trading Permit Holders will be able to commit to a higher tier of the sliding scale for the remainder of a calendar year, during a commitment year, if the Trading Permit Holder obtains enough eligible Floor Broker Trading Permits and provides written notification to the Registration Services Department by the 25 th day of the month preceding the month in which the higher tier will be effective (or the preceding business day if the 25 th is not a business day). For example, a Trading Permit Holder may provide written notice to commit to Tier 1 effective July 1 for the remainder of the calendar year as long as the Trading Permit Holder obtains enough eligible Trading Permits and provides written notice by June 25 th that the Trading Permit Holder would like to participate in the sliding scale starting in July for the remainder of that calendar year. Even if that Trading Permit Holder subsequently falls below the minimum number of eligible Floor Broker Trading Permits (in the committed calendar year), for the committed tier, the Trading Permit Holder will remain responsible for paying for the tier minimum for the remainder of the calendar year. Trading Permit Holders will be responsible to pay for at least the minimum amount of eligible Floor Broker Trading Permits in the committed tier for the calendar year on a monthly basis unless the Trading Permit Holder entirely terminates as a Trading Permit Holder during the year. If a Trading Permit Holder combines, merges, or is acquired during the course of the calendar year, the surviving Trading Permit Holder will maintain responsibility for the committed number of eligible Floor Broker Trading Permits. An additional monthly fee of $2,000 per month will be assessed to any Floor Broker Trading Permit Holder that executes more than 20,000 VIX contracts during the month. If and to the extent that a Trading Permit Holder or TPH organization has more than one Floor Broker Trading Permit that is January 13, 2012 Volume RB23, Number 2 11

14 utilized to execute VIX options transactions, the VIX executions of that Trading Permit Holder or TPH organization shall be aggregated for purposes of determining this additional monthly fee and the Trading Permit Holder or TPH organization shall be charged a single $2,000 fee for the combined VIX executions through those Floor Broker Trading Permits if the executions exceed 20,000 contracts per month. An additional monthly fee of $3,000 per month will be assessed to any Floor Broker Trading Permit Holder that executes more than 20,000 SPX contracts during the month. If and to the extent that a Trading Permit Holder or TPH organization has more than one Floor Broker Trading Permit that is utilized to execute SPX options transactions, the SPX executions of that Trading Permit Holder or TPH organization shall be aggregated for purposes of determining this additional monthly fee and the Trading Permit Holder or TPH organization shall be charged a single $3,000 fee for the combined SPX executions through those Floor Broker Trading Permits if the executions exceed 20,000 contracts per month. Electronic Access Permit (EAP) Fee This fee will be assessed monthly to each EAP Holder. The EAP entitles the holder to electronic access to the Exchange. Holders must be broker-dealers registered with the Exchange in one or more of the following capacities: (a) Clearing Trading Permit Holder; (b) TPH organization approved to transact business with the public; (c) Proprietary Trading Permit Holder; and (d) order service firm. This permit does not provide access to the trading floor. A Proprietary Trading Permit Holder is a Trading Permit Holder with electronic access to the Exchange to submit proprietary orders that are not Market-Maker orders (i.e. that are not M orders for the Proprietary Trading Permit Holder s own account or an affiliated Market-Maker account). The EAP provides an order entry bandwidth allowance, up to three logins and Trading Permit Holder Status (including access to CBSX). If an EAP is issued during a calendar month after the first trading day of the month, the access fee for the EAP for that calendar month is prorated based on the remaining trading days in the calendar month. EAPs will be renewed automatically for the next month unless the Trading Permit Holder submits written notification to the Registration Services Department by the 25 th day of the prior month (or the preceding business day if the 25 th is not a business day) to cancel the EAP effective at or prior to the end of the applicable month. SPX Tier Appointment Fee This fee will be assessed monthly to any Market-Maker Trading Permit Holder that either (a) has an SPX Tier Appointment at any time during a calendar month; or (b) conducts any open outcry transactions in SPX, including SPX Weeklys, at any time during a calendar month. Each SPX Tier Appointment may only be used with one designated Market-Maker Trading Permit. SPX Tier Appointments will be renewed automatically for the next month unless the Trading Permit Holder submits written notification to the Market Quality Assurance & DPM Administration Department by the last business day of the prior month to cancel the SPX Tier Appointment effective at or prior to the end of the applicable month. VIX Tier Appointment Fee This fee will be assessed monthly to any Market-Maker Trading Permit Holder that either (a) has a VIX Tier Appointment at any time during a calendar month and trades at least 100 VIX contracts electronically while that appointment is active; or (b) trades at least 1,000 VIX options contracts in open outcry during a calendar month. Each VIX Tier Appointment may only be used with one designated Market-Maker Trading Permit. VIX Tier Appointments will be renewed automatically for the next month unless the Trading Permit Holder submits written notification to the Market Quality January 13, 2012 Volume RB23, Number 2 12

15 Assurance & DPM Administration Department by the last business day of the prior month to cancel the VIX Tier Appointment effective at or prior to the end of the applicable month. Quoting and Order Entry Bandwidth Packet Fee This fee will be assessed monthly to Market-Maker Trading Permit Holders that have registered for a Quoting and Order Entry Bandwidth Packet. A Quoting and Order Entry Bandwidth Packet is available to Market-Maker Trading Permit Holders only and entitles the holder to a quoting and order entry bandwidth allowance and up to three additional logins, which may then be added onto the total bandwidth pool for a Market-Maker s acronym(s) and Trading Permit(s). If a Quoting and Order Entry Bandwidth Packet is issued during a calendar month after the first trading day of the month, the fee for that calendar month is prorated based on the remaining trading days in the calendar month. Quoting and Order Entry Bandwidth Packets will be renewed automatically for the next month unless the Trading Permit Holder submits written notification to the Registration Services Department by the last business day of the prior month to cancel the Quoting and Order Entry Bandwidth Packet effective at or prior to the end of the applicable month. Order Entry Bandwidth Packet Fee - This fee will be assessed monthly to Trading Permit Holders that have registered for an Order Entry Bandwidth Packet. An Order Entry Bandwidth Packet is available to all Trading Permit Holders and entitles the holder to order entry bandwidth allowance and up to three additional logins. A Trading Permit Holder may also obtain and assign to a Sponsored User of the Trading Permit Holder one or more Order Entry Bandwidth Packets. In that event, the fees for the assigned bandwidth packet(s) are assessed to the Trading Permit Holder and the bandwidth packet(s) may be utilized solely by the Sponsored User (and not by the Trading Permit Holder or any other Sponsored User). If an Order Entry Bandwidth Packet is issued during a calendar month after the first trading day of the month, the fee for that calendar month is prorated based on the remaining trading days in the calendar month. Order Entry Bandwidth Packets will be renewed automatically for the next month unless the Trading Permit Holder submits written notification to the Registration Services Department by the last business day of the prior month to cancel the Order Entry Bandwidth Packet effective at or prior to the end of the applicable month. Any questions regarding this Regulatory Circular may be directed to Regina Millison at (312) or Stan Leimer at (312) in the Registration Services Department. (Regulatory Circular RG Revised). R U L E C H A N G E S EFFECTIVE-ON-FILING RULE CHANGE(S) The following rule filing(s) was submitted to the Securities and Exchange Commission ( SEC ) effective on filing, and may have taken effect pursuant to Section 19(b)(3) of the Securities Exchange Act of 1934 (the Act ). The rule filing(s) will remain in effect barring further action by the SEC within 60 days after publication in the Federal Register. Below, any additions to rule text are underlined and any deletions are [bracketed]. Copies are available on the CBOE public website at January 13, 2012 Volume RB23, Number 2 13

16 SR-CBOE Fees Schedule On January 5, 2012, the Exchange filed Rule Change File No. SR-CBOE , which filing proposes to amend the CBOE Fees Schedule to revise the Volume Incentive Program to stipulate that in the event of a CBOE System outage or other interruption of trading on CBOE, the Exchange will take into account, on a pro rata basis, the length of time of the interruption for purposes of calculating the contracts per day. Any questions regarding the rule change may be directed to Jeff Dritz, Legal Division, at The rule filing is available at CBOE pdf. SR-CBOE Complex Order Processing On January 9, 2012, the Exchange filed Rule Change File No. SR-CBOE , which filing proposes to amend the CBOE automatic execution and complex order processing rules to update existing price check parameter and order handling features and include some additional ones. Any questions regarding the rule change may be directed to Jennifer Lamie, Legal Division, at The rule text is shown below and the rule filing is available at CBOE pdf. Rule 6.13 CBOE Hybrid System Automatic Execution Feature * * * * * (b) Automatic Execution: Orders eligible for automatic execution through the CBOE Hybrid System may be automatically executed in accordance with the provisions of this Rule, Rule 6.13A, 6.14 or 6.14A, as applicable. This section governs automatic executions and split-price automatic executions. The automatic execution and allocation of orders or quotes submitted by market participants also is governed by Rules 6.45A(c) and (d) and Rules 6.45B(c) and (d). (i) Eligibility: The Exchange shall designate the eligible order size, eligible order type, eligible order origin code (i.e., public customer orders, non-market-maker broker-dealer orders, and Market-Maker broker-dealer orders), and classes in which the automatic execution feature shall be activated, subject to the following: (A) (1) Eligible Order Size: The Exchange shall establish on a class-by-class basis the maximum size of orders entitled to receive automatic execution through the CBOE Hybrid System. If the eligible order size exceeds the disseminated size, incoming eligible orders shall be entitled to receive an automatic execution up to the disseminated size. (2) Hybrid 3.0 Eligibility and Process: For Hybrid 3.0 classes, all eligible orders will receive automatic execution against public customer orders in the January 13, 2012 Volume RB23, Number 2 14

17 electronic book. Any remaining balance of the order may be represented in the electronic book provided such order is eligible for book entry pursuant to Rule 7.4. If the order is not eligible for book entry, or at the order entry firm s discretion, the order will route to PAR or the order entry firm s booth. If an order is not eligible to route to PAR, then the remaining balance will be cancelled. (B) Orders Not Eligible for Automatic Execution: Orders not eligible for automatic execution will route on a class-by-class basis to PAR or, at the order entry firm s discretion, to the order entry firm s booth. If an order is not eligible to route to PAR, then the remaining balance will be cancelled. (C) No change. (ii) No change (iii) Split Price Executions: For Hybrid classes, incoming eligible orders of a size greater than the disseminated size shall receive an automatic execution for a size up to the disseminated size. The remaining balance of the order if marketable, will automatically execute at the revised disseminated price provided the revised disseminated price represents the NBBO (if the revised price is inferior to NBBO the remaining balance of the order will route to PAR or, at the order entry firm s discretion, the order entry firm s booth or for processing pursuant to Rule 6.14 or 6.14A, as applicable; if an order is not eligible to route to PAR, then the remaining balance will be cancelled). If not marketable, the remaining balance of the order will be automatically represented in the electronic book provided such order is eligible for book entry pursuant to Rule 7.4. If the order is not eligible for book entry, it will route to PAR or, at the order entry firm s discretion to the order entry firm s booth. If an order is not eligible to route to PAR, then the remaining balance will be cancelled. Pronouncements pursuant to this provision shall be made by the Exchange and announced via Regulatory Circular. (iv) No change. (v) Price Check Parameter for HAL Classes: For classes in which HAL (Rule 6.14) is activated the CBOE Hybrid System will not automatically execute eligible orders that are marketable if the width between the Exchange s best bid and best offer is not within an acceptable price range (as determined by the Exchange on a series-[ ]by-[ ]series basis for market orders and/or marketable limit orders and announced to the Trading Permit Holders via Regulatory Circular). For purposes of this subparagraph: (A) An acceptable price range shall be determined by the Exchange on a classby-class basis and shall be no less than: $0.375 between the bid and offer for each option contract for which the bid is less than $2, $0.60 where the bid is at least $2 but does not exceed $5, $0.75 where the bid is more than $5 but does not exceed $10, $1.20 where the bid is more than $10 but does not exceed $20, and $1.50 where the bid is more than $20. (B) The senior official in the Control Room or two Floor Officials may grant intra-day relief by widening the acceptable price range for one or more option series. Notification of intra-day relief will be announced via verbal message to the trading crowd, printer message to TPH organizations on the trading floor, and electronic message to Trading Permit Holders that request to receive such messages. January 13, 2012 Volume RB23, Number 2 15

18 Such orders will be routed on a class-by-class basis to PAR or, at the order entry firm s discretion, to the order entry firm s booth [pursuant to subparagraph (b)(i)(b) above]. If an order is not eligible to route to PAR, then the remaining balance will be cancelled. (vi) Price Check Parameter for HAL2 and All Other Classes: For classes in which HAL[2] (Rule 6.14[A]) is activated see subparagraph (v) above, otherwise: the CBOE Hybrid System will not automatically execute eligible orders that are marketable if (1) the width between the national best bid and national best offer is not within an acceptable price range (as determined by the Exchange on a series-[ ]by-[ ]series basis for market orders and/or marketable limit orders and announced to the Trading Permit Holders via Regulatory Circular), or (2) the execution would follow an initial partial execution on the Exchange and would be at a subsequent price that is not within an acceptable tick distance from the initial execution (as determined by the Exchange on a series by series and premium basis for market orders and/or marketable limit orders and announced to the Trading Permit Holders via Regulatory Circular). For purposes of this subparagraph: (A) An acceptable price range ( APR ) shall be determined by the Exchange on a class-by-class basis and shall be no less than: $0.375 between the bid and offer for each option contract for which the bid is less than $2, $0.60 where the bid is at least $2 but does not exceed $5, $0.75 where the bid is more than $5 but does not exceed $10, $1.20 where the bid is more than $10 but does not exceed $20, and $1.50 where the bid is more than $20. An acceptable tick distance ( ATD ) shall be no less than 2 minimum increment ticks. (B) The senior official in the Control Room or two Floor Officials may grant intra-day relief by widening the APR and ATD for one or more option series. Notification of intra-day relief will be announced via verbal message to the trading crowd, printer message to TPH organizations on the trading floor, and electronic message to Trading Permit Holders that request to receive such messages. If an execution is suspended because the APR has not been met, the order will be routed to PAR or, at the order entry firm s discretion, to the order entry firm s booth [pursuant to subparagraph (b)(i)(b) above]. If an order is not eligible to route to PAR, then the remaining balance will be cancelled. If an execution is suspended because executing the remaining portion of an order would exceed the ATD, then such remaining portion will be exposed pursuant to the HAL2 process in Rule 6.14A using the ATD as the exposure price. If a quantity remains at the conclusion of the HAL2 process, the remaining quantity will be routed to PAR or, at the order entry firm s discretion, to the order entry firm s booth [pursuant to subparagraph (b)(i)(b) above]. If an order is not eligible to route to PAR, then the remaining balance will be cancelled. (c) (d) No change. * * * * * Rule 6.53C Complex Orders on the Hybrid System * * * * *... Interpretations and Policies: * * * * *.08 Price Check Parameters: On a class-[ ]by-[ ]class basis, the Exchange may determine (and announce to the Trading Permit Holders via Regulatory Circular) [that COB will] to not automatically execute an eligible complex order[s] that [are]is: January 13, 2012 Volume RB23, Number 2 16