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TRADING PERMIT INFORMATION FOR 02/03/2011 THROUGH 02/09/2011

ExchangeBulletinFebruary 11, 2011 Volume 39, Number 06

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 e-mail 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 e-mail. E-mail subscriptions may be obtained by submitting your name, firm if applicable, e-mail address, and phone number, to [email protected]. If you do sign up for e-mail delivery, please remember to inform the Registration Services Department of e-mail address changes. Sub-scriptions 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.

For access to the CBOE Trading Permit Holder Web Site, please also notify the Registration Services Department by sending an e-mail to [email protected] or by phone at 312-786-7449.

Copyright © 2011 Chicago Board Options Exchange, Incorporated

TRADING PERMIT APPLICATIONS RECEIVED FOR WHICH BULLETIN PUBLICATION IS REQUIRED

Individual Applicants

Michael DesrosiersBelvedere Trading, LLC1120 N. LaSalle, Apt 14NChicago, IL 60610

TPH Organization Applicants

Citigroup Global Markets Inc.Thomas H Jarck, Nominee388 Grenwich StreetNew York, NY 10013 Citigroup Financial Products, Inc. - 100% Shareholder Citigroup Global Markets Holdings, Inc. - 100% Owner Citigroup Financial Products, Inc. Citigroup Inc. - 100% Owner of Citigroup Global Markets, Inc. Flood, Scott L. - Co-General Counsel James A. Forese – Director/President John P. Havens – Director/Chairman and CEO Kirchen, Karen J. - Co-General Counsel Deborah D. McWhinney – President/CEO Citi Personal Wealth & Mgmnt Thomas N. Murphy – Chief Operations Officer Root, Pamela P. - Chief Compliance Officer Verron, Cliff - Chief Financial Officer William T. Young – CCO-Investment Advisory Businesses

February 11, 2011 Volume 39, Number 06 Chicago Board Options Exchange

Research Circular #C2-RS11-012February 8, 2011*****UPDATE*****UPDATE*****UPDATE*****Vale S.A. (“VALE & adj. VALE1”)Determination of Adjusted VALE1 Contract Deliverable

Research Circular #RS11-083February 8, 2011Airgas, Inc. (“ARG”)Tender Offer FURTHER EXTENDEDby Air Products Distribution, Inc.

Research Circular #C2-RS11-013February 8, 2011Airgas, Inc. (“ARG”)Tender Offer FURTHER EXTENDEDby Air Products Distribution, Inc.

Research Circular #RS11-085February 10, 2011IMAX Corporation (“IMAX”)To Move and Begin Trading on NYSEEffective Date: February 11, 2011

Research Circular #RS11-086February 10, 2011Dynegy Inc. (“DYN”)Tender Offer FURTHER EXTENDED by IEH Merger Sub LLC

Research Circular #RS11-087February 10, 2011Two Harbors Investment Corp. (“TWO”)To Move and Begin Trading on NYSEEffective Date: February 11, 2011

Research Circular #RS11-088February 11, 2011Mediacom Communications Corporation (“MCCC”) Proposed Mergerwith JMC Communications LLC

RESEARCH CIRCULARS The following Research Circulars were distributed between February 4 and February 11, 2011. If you wish to read the entire document, please refer to the CBOE website at www.cboe.com 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 1-888-OPTIONS.

Research Circular #RS11February 4, 2011NMT Medical, Inc. ("NMTI")Move and Begin Trading on the OTCQB MarketplaceEffective Date: February 7, 2011

Research Circular #RS11-037January 21, 2011Dollar Financial Corporation (“DLLR”) 3-for-2 Stock SplitEx-Distribution Date: February 7, 2011

Research Circular #C2-RS11-011February 7, 2011Diamond Offshore Drilling, Inc. (“DO”)CONTRACT ADJUSTMENT FOR SPECIAL CASH DIVIDENDEx-Date: February 9, 2011 Research Circular #RS11-080February 8, 2011Diana Shipping Inc. (“DSX & adj. DSX1”)Determination of Cash-in-Lieu Amount

Research Circular #RS11-081February 8, 2011*****UPDATE*****UPDATE*****UPDATE*****Vale S.A. (“VALE & adj. VALE1”)Determination of Adjusted VALE1 Contract Deliverable

Research Circular #RS11-082February 8, 2011*****UPDATE*****UPDATE*****UPDATE***** Vale S.A. Preferred ADR (“VALEP & adj. VALP1”)Determination of Adjusted VALP1 Contract Deliverable

February 11, 2011 Volume RB22, Number 6

________________________________________________________________________

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 © 2011 Chicago Board Options Exchange, Incorporated.

________________________________REGULATORY CIRCULARS___________________ Regulatory Circular RG11-022 Date: February 4, 2011 To: Trading Permit Holders From: Department of Regulated Entities Department of Member Firm Regulation

Re: SUMMARY OF 2010 YEAR-END REGULATORY REPORTING

REQUIREMENTS 1) OE-418 (ITSFEA) Form Contact Pat Sizemore at (312) 786-7752 or [email protected] Department of Regulated Entities 2) FOCUS Report Part IIA (CBOE) and Schedule I Contact Mike LaGioia at (312) 786-7728 or [email protected], Don Sitarz at (312) 786-7414 or [email protected], or Leo Rutkowski at (312) 786-7749 or [email protected] Department of Member Firm Regulation 3) Anti-Money Laundering Compliance Program Contact Tyson Wilson at (312) 786-7011 or [email protected] or Dan Sieracki at (312) 786-7167 or [email protected] Department of Member Firm Regulation 4 SIPC Contact SIPC directly at (202) 371-8300

OE- 418 (ITSFEA) Form Exchange Rule 4.18 requires every TPH, to establish, maintain and enforce written policies and procedures reasonably designed to prevent the misuse of material nonpublic information by the TPH or persons associated with the TPH. The Exchange has created a set of forms to assist individuals and small organizations to generally meet the record keeping requirements of the Rule. You must meet the following guidelines to solely use the OE-418 forms: 1) Individual TPH with no employees 2) Individual TPHs who employ no more than 3 non-TPH employees

February 11, 2011 Volume RG22 , Number 6 1

mailto:[email protected]







3) TPH organizations with no more than 3 nominees and which employ no more than 6 non-TPH employees.

Please note the definition of “non-TPH employee” has been clarified to include all associated persons. The term "person associated with a broker or dealer" or "associated person of a broker or dealer" means any partner, officer, director, or branch manager of such broker or dealer (or any person occupying a similar status or performing similar functions), any person directly or indirectly controlling, controlled by, or under common control with such broker or dealer, or any employee of such broker or dealer, except that any person associated with a broker or dealer whose functions are solely clerical or ministerial shall not be included in the meaning of such term for purposes of section 15(b) (other than paragraph (6) thereof).

Forms, which are due by March 1, 2011 are available on the website at http://www.cboe.org/GeneralInfo, or if you wish to receive the form via email please contact Pat Sizemore at [email protected] Questions regarding the forms can be directed to Pat Sizemore of the Department of Regulated Entities at (312) 786-7752.

FOCUS Report Part IIA (CBOE) and Schedule I

Due Date: March 1, 2011 Fees: Filing fees have been eliminated

(Note: Fines are assessed for filing after March 2, 2009) Requirements: Every TPH registered with the SEC as a broker/dealer for which the Exchange is the Designated Examining Authority (“DEA”) and does not file FOCUS monthly must file a FOCUS Report Form X-17A-5 Part IIA (CBOE) and Schedule I. Please Note:

If you are a nominee and a registered broker/dealer, you must submit a separate FOCUS Report Form X-17A-5 Part IIA (CBOE) and Schedule I for your personal broker-dealer activity. Your TPH must also submit forms for its activities.

Even if you did not execute any trades during calendar year 2010, you are still required to file the FOCUS and Schedule I if you are a registered broker/dealer and CBOE is your DEA.

FOCUS Reports and Schedule I may be filed either in hard copy or electronically via the web-based WinJammer application. In order to file electronically CBOE needs you to provide the following information: Broker-Dealer Name, Tax Identification Number, designated filer Name, Phone Number and Email Address. Please provide this information to one of the individuals listed below. Upon receipt of this information you will receive a Winjammer Quickstart guide, and a user id and temporary password. You may obtain copies of paper FOCUS Report Forms X17A-5 Part IIA and Schedule I forms at the following web address: http://www.cboe.org/GeneralInfo Questions regarding FOCUS can be directed to Mike LaGioia at (312) 786-7728, Don Sitarz at (312) 786-7414, or Leo Rutkowski at (312) 786-7749 of the Department of Member Firm Regulation.


Anti-Money Laundering (AML) Compliance Program

Every TPH registered with the SEC as a broker/dealer for which the Exchange is the DEA and who does not file FOCUS monthly is required to demonstrate compliance with CBOE Rule 4.20 by submitting the following:

Name of the broker dealer’s designated AML Compliance Officer A copy of the broker dealer’s AML supervisory procedures, approved in writing Evidence of continuing AML training for appropriate associated persons A copy of the independent review letter for the broker dealer’s AML program

If these documents were submitted in 2010 and no changes to your procedures were made since the submission, you will only be required to submit evidence of continuing training and a copy of the 2010 independent review letter if no review was conducted in calendar year 2009. See the following regulatory circulars for more detail. Copies of RG11-009 and RG11-010 can be found within the Regulatory Circular archive of the Legal Site: http://www.cboe.org/legal/crclReg.aspx Questions regarding AML compliance can be directed to Tyson Wilson at (312) 786-7011 or Dan Sieracki at (312) 786-7167 of the Department of Member Firm Regulation.

SIPC As you are aware, in March 2009, SIPC changed the manner in which they calculate and collect their assessment. SIPC forms and any assessments are now due twice a year. Please contact SIPC directly if you have any questions at (202) 371-8300. ______________________________________________________________________________ Regulatory Circular RG11-023 Date: February 4, 2011 To: Trading Permit Holders and Trading Permit Holder Organizations From: Finance and Administration Subject: Linkage Fees ______________________________________________________________________________ The Exchange is delaying the amendment of the linkage pass through threshold announced in Regulatory Circular RG11-021, originally intended to be effective Monday, February 7, 2011. The qualifying public customer order size for the assessment of $0.35/contract for executions on an away exchange as a result of a linkage order sent by CBOE remains at 500 or more contracts until further notice.

__________________________ Questions can be directed to Don Patton at (312) 786-7026 ([email protected]), Colleen Laughlin at 312-786-8390 ([email protected]), John Mavindidze at (312) 786-7689 ([email protected]) or Cheryl Ahrens at 312-786-7450 ([email protected]).





Regulatory Circular RG11-024 DATE: February 7, 2011 TO: Members and Member Firms FROM: Market Operations Department RE: Restrictions on Transactions in NMT Medical, Inc. (“NMTI”) Effective February 7, 2011 the NASDAQ has suspended trading in NMT Medical, Inc. (“NMTI”). Trading on the CBOE in existing series of NMTI options will be subject to the following restrictions. Only closing transactions may be effected in any series of NMTI options except for (i) opening transactions by Market-Makers executed to accommodate closing transactions of other market participants and (ii) opening transactions by CBOE member 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 NMTI 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. Member 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 6.25. There are no restrictions in place with respect to the exercise of NMTI options. The provisions of this circular apply to any options on NMTI traded on CBOE. Any questions regarding this circular may be directed to Kerry Winters at (312) 786-7312 or Regulatory Services Division at (312) 786-7730 or (312) 786-8460. CBOE restricted class memos can be accessed from CBOE.org at the following web address:

http://www.cboe.org/Restrictions

http://www.cboe.org/Restrictions


Regulatory Circular RG11-025 To: Trading Permit Holders From: Trading Operations Date: February 8, 2011 Re: Splitting of Stock/Option Market Orders On February 9, 2011, CBOE will activate an enhancement to the processing of stock/option complex orders with a price of “market”. Details are as follows: At the conclusion of a Complex Order Auction (COA), eligible stock/option market orders that cannot be filled in whole or a permissible ratio within the CBOE BBO and stock NBBO may be split into individual component market orders. In such cases, market orders for the component option and stock legs will be sent to CBOE and CBSX, respectively. The component orders will be processed by CBOE and CBSX consistent with the processes for handling simple market orders, including that the orders may be linked to away exchanges in an attempt to obtain NBBO pricing and that the orders may potentially fill at multiple prices. Example: Leg Detail CBOE/CBSX Away Exchange Buy 500 shares 10.00 – 10.10 200x200 10.00 – 10.09 1000x1000 Sell 5 Options 1.00 – 1.10 2x100 1.05 – 1.10 10x10 The valid execution price range for this spread is 8.90 – 9.09 and the order will be auctioned via COA. Assuming no responses, the order will be split into two component market orders and sent to CBOE and CBSX, respectively. In this example: 500 shares would be purchased for 10.09, and 5 options would be sold at 1.05 (resulting in a net price of 9.04). Parameters will restrict the scenarios under which an order will be split, as follows:

1) The maximum eligible order quantity is 1000 for the stock leg, and 10 for the option leg. 2) The displayed quantity for the stock NBBO must be at least 1000 (even if the quantity on the

stock leg of the order is less). 3) Orders with a sell option leg will split only if the option NBBO bid for the series is $0.25 or

higher and the displayed NBBO bid size is sufficient to satisfy the entire quantity for that leg of the order.

4) Orders will not split if auctioned within 3 minutes of the close. Questions regarding this matter may be directed to Doreen Scholla at 312-786-7529/ [email protected], Anthony Montesano at 312-786-7365/[email protected] or the Help Desk at 866-728-2263/[email protected].




Regulatory Circular RG11-026 Date: February 9, 2011 To: Trading Permit Holders and Trading Permit Holder Organizations From: Finance and Administration Subject: PAR Official Fees Waiver ___________________________________________________________________________________ In circular RG11-021, the Exchange announced that, effective February 1, 2011, the Exchange would waive the PAR Official Fees for any affiliated Trading Permit Holders that have ten or more Floor Broker Trading Permits throughout the calendar month. The fee waiver did not become effective. The CBOE will instead be submitting to the SEC an amended plan to address the usage of PAR Brokers, intended to be in effect for March 1, 2011. Details of this revised plan will be disclosed in the coming days. In order to minimize disruption during the transition, no PAR Official Fees will be collected for the month of February from any party.

__________________________ Questions can be directed to Don Patton at (312) 786-7026 ([email protected]), Colleen Laughlin at 312-786-8390 ([email protected]), John Mavindidze at (312) 786-7689 ([email protected]) or Cheryl Ahrens at 312-786-7450 ([email protected]). ___________________________________________________________________________________ Regulatory Circular RG11-027 To: CBOE and CBSX Trading Permit Holders From: Trading Operations Date: February 10, 2011 Re: Short Sale Marking ____ To conform with the upcoming short sale price test requirements under Rule 201 of Regulation SHO, CBSX quotes and orders, as well as the stock leg of CBOE multi-leg orders and auction responses that are electronically routed to CBSX for execution, will be required to indicate Long, Short or Short Exempt when appropriate. Compliance is scheduled for February 28, 2011. Format specifications and point-to-point testing with CBOE and CBSX are currently available, and users will be required to certify with the CBOE API Group that they are compliant. In addition, industry testing is scheduled for February 12 and February 26. CBOE and CBSX plan to participate in both industry-wide test dates. Questions regarding this functionality may be directed to Anthony Montesano at 312-786-7365/ [email protected], the CBOE Help Desk at 866-728-2263/[email protected], or the CBSX Help Desk at 866-458-2279 /[email protected]. API questions may be directed to the API group at 312-786-7300/[email protected]. For additional information on how CBSX will handle short sales under Rule 201, please refer to CBSX Rule 51.8.02.






R U L E C H A N G E S PROPOSED RULE CHANGE(S) Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”), and Rule 19b-4 thereunder, the Exchange has filed the following proposed rule change with the Securities and Exchange Commission (“SEC”). Below, any additions to rule text are underlined and any deletions are [bracketed]. Copies of the rule change filing are available at www.cboe.org/legal/submittedsecfilings.aspx. Members may submit written comments to the Legal Division. The effective date of a proposed rule change will be the date of approval by the SEC, unless otherwise noted. _________________________________________________________________________________ SR-CBOE-2011-016 FLEX Options On February 7, 2011, the Exchange filed Rule Change File No. SR-CBOE-2011-016, which filing proposes to make permanent CBOE’s pilot programs regarding the permissible exercise settlement values for FLEX Index Options and the elimination of minimum value sizes requirements for all FLEX Options. Any questions regarding the rule change may be directed to Jennifer Lamie, Legal Division, at 312-786-7576. The rule text is shown below and the rule filing is available at https://www.cboe.org/publish/RuleFilingsSEC/SR-CBOE-2011-016.pdf.

Rule 24A.4 - Terms of FLEX Options RULE 24A.4. (a) General

* * * * * (2) Every FLEX Request for Quotes and every FLEX Option contract shall contain

one element, as designated by the parties to the contract, from each of the following contract term categories:

* * * * * (iv) Expiration date (any business day specified as to day, month and year,

not to exceed a maximum term of fifteen years [except that a FLEX Index Option that expires on any business day that falls on, or within two business days of, a third Friday-of-the-month expiration day for any Non-FLEX Option other than a QIX option) (“Expiration Friday”), may only have an exercise settlement value on the expiration date determined by reference to the reported level of the index as derived from the opening prices of the component securities (“a.m. settlement”)]); and

* * * * * [(4) Every FLEX Request for Quotes and every responsive FLEX Quote, as

applicable, must satisfy the following contract and transaction specifications: (i) The maximum term shall be fifteen years. (ii) The minimum value size for an opening transaction (other than FLEX

Quotes responsive to a FLEX Request for Quotes) in any FLEX series in which there is no open interest at the time the Request for Quotes is submitted shall be:

(A) except as provided in Interpretation and Policy .01 below, for FLEX Equity Options, the lesser of 250 contracts or the number of contracts overlying $1 million in the underlying securities; and

(B) for FLEX Index Options, $10 million Underlying Equivalent Value;


(iii) The minimum value size for a transaction in any currently-opened FLEX series shall be:

http://www.cboe.org/legal/submittedsecfilings.aspx

https://www.cboe.org/publish/RuleFilingsSEC/SR-CBOE-2011-016.pdf

(A) for FLEX Equity Options, the lesser of 100 contracts or the number of contracts overlying $1 million in the underlying securities in the case of opening transactions, and 25 contracts in the case of closing transactions; and

(B) for FLEX Index Options, $1 million Underlying Equivalent Value in the case of both opening and closing transactions; or

(C) in either case the remaining underlying size or Underlying Equivalent Value on a closing transaction, whichever is less; and (iv) The minimum value size for FLEX Quotes responsive to a Request for

Quotes shall be 25 contracts in the case of FLEX Equity Options, and $1 million Underlying Equivalent Value in the case of FLEX Index Options, or in either case the remaining underlying size or Underlying Equivalent Value on a closing transaction, whichever is less, provided, however, that FLEX Appointed Market-Makers must provide a FLEX Quote in response to every Request for Quotes respecting a class of FLEX Options to which they are appointed and trading in open outcry. With respect to FLEX Index Appointed Market-Makers, such FLEX Quotes must be for at least $10 million Underlying Equivalent Value or the dollar amount indicated in the Request for Quote, whichever is less.]

* * * * * . . . Interpretations and Policies: .01 Reserved. [FLEX Pilot Programs: (a) FLEX Index Option PM Settlements: Notwithstanding subparagraph (a)(2)(iv) above, for a pilot period ending March 28, 2011, a FLEX Index Option that expires on an Expiration Friday may have any exercise settlement value that is permissible pursuant to subparagraph (b)(3) above. (b) FLEX Option Minimum Value Sizes: Notwithstanding subparagraph (a)(4) above, for a pilot period ending March 28, 2011, there shall be no minimum value size requirements for FLEX Options.]

* * * * * Rule 24A.9 - FLEX Market-Maker Appointments and Obligations RULE 24A.9.

* * * * * (b) A FLEX Appointed Market-Maker shall have an obligation to enter a FLEX Quote in response to any Request for Quotes on any FLEX Option of the class to which the Market-Maker is appointed. Except as provided in paragraph (c) of this Rule 24A.9, a FLEX Qualified Market-Maker may, but shall not be obligated to, enter a FLEX Quote in response to a Request for Quotes on a FLEX Equity Option of the class in which he is qualified. Every FLEX Quote entered by a FLEX Appointed Market-Maker or a FLEX Qualified Market-Maker [shall meet or exceed the minimum size parameters set forth in Rule 24A.4(a)(4)(iv) and] shall be entered within the indicated Request Response Time plus any applicable BBO Improvement Interval. Unless withdrawn or modified during the Request Response Time, such Quotes shall be considered firm for the duration of the Request Response Time and, in the event the Quote is the BBO, the BBO Improvement Interval.

* * * * *

Rule 24B.4 - Terms of FLEX Options RULE 24B.4. (a) General

* * * * *


(2) Every FLEX Request for Quotes, every FLEX Order and every FLEX Option contract shall contain one element, as designated by the parties to the contract, from each of the following contract term categories:

* * * * * (iv) expiration date (any business day specified as to day, month and year,

not to exceed a maximum term of fifteen years [except that a FLEX Index Option that expires on any business day that falls on, or within two business days of, a third Friday-of-the-month expiration day for any Non-FLEX Option other than a QIX option) (“Expiration Friday”), may only have an exercise settlement value on the expiration date determined by reference to the reported level of the index as derived from the opening prices of the component securities (“a.m. settlement”)]); and

* * * * * [(5) Every FLEX Request for Quotes, every responsive FLEX Quote, every RFQ

Order and every FLEX Order, as applicable, must satisfy the following contract and transaction specifications:

(i) The maximum term shall be fifteen years. (ii) The minimum value size for an opening transaction resulting from an

RFQ or from trading against the electronic book (other than FLEX Quotes responsive to a FLEX Request for Quotes and FLEX Orders submitted to rest in the electronic book) in any FLEX series in which there is no open interest at the time the Request for Quotes or FLEX Order, as applicable, is submitted shall be:

(A) except as provided in Interpretation and Policy .01 below, for FLEX Equity Options, the lesser of 250 contracts or the number of contracts overlying $1 million in the underlying securities; and

(B) for FLEX Index Options, $10 million Underlying Equivalent Value. (iii) The minimum value size for a transaction in any currently-opened FLEX

series resulting from an RFQ or from trading against the electronic book (other than FLEX Quotes responsive to a FLEX Request for Quotes and FLEX Orders submitted to rest in the electronic book) shall be:

(A) for FLEX Equity Options, the lesser of 100 contracts or the number of contracts overlying $1 million in the underlying securities in the case of opening transactions, and 25 contracts in the case of closing transactions; and

(B) for FLEX Index Options, $1 million Underlying Equivalent Value in the case of both opening and closing transactions; or

(C) in either case the remaining underlying size or Underlying Equivalent Value on a closing transaction, whichever is less.


(iv) The minimum value size for FLEX Quotes responsive to a FLEX Request for Quotes and FLEX Orders (undecremented size) submitted to rest in the electronic book shall be 25 contracts in the case of FLEX Equity Options, and $1 million Underlying Equivalent Value in the case of FLEX Index Options, or in either case the remaining underlying size or Underlying Equivalent Value on a closing transaction, whichever is less; provided, however, that FLEX Appointed Market-Makers must provide a FLEX Quote (A) in response to every open outcry Request for Quotes respecting a class of FLEX Options to which they are appointed and trading in open outcry and (B) for at least that percentage of electronic Request for Quotes as determined by the Exchange respecting a class of FLEX Options to which they are appointed, provided that such percentage shall not be less than 80%. With respect to FLEX Index Appointed Market-Makers, FLEX Quotes and FLEX Orders (undecremented size) must be for at least $10 million Underlying Equivalent Value

or the dollar amount indicated in the Request for Quote (if applicable), whichever is less.]

* * * * * . . . Interpretations and Policies: .01 Reserved. [FLEX Pilot Programs: (a) FLEX Index Option PM Settlements: Notwithstanding subparagraph (a)(2)(iv) above, for a pilot period ending March 28, 2011, a FLEX Index Option that expires on an Expiration Friday may have any exercise settlement value that is permissible pursuant to subparagraph (b)(3) above. (b) FLEX Option Minimum Value Sizes: Notwithstanding subparagraph (a)(5) above, for a pilot period ending March 28, 2011, there shall be no minimum value size requirements for FLEX Options.]

* * * * * Rule 24B.9 - FLEX Market-Maker Appointments and Obligations RULE 24B.9.

* * * * * (c) A FLEX Appointed Market-Maker shall have an obligation to enter a FLEX Quote (i) in response to any open outcry Request for Quotes respecting a class of FLEX Options to which the FLEX Appointed Market-Maker is appointed and trading in open outcry; and (ii) in response to [that percentage of the electronic Requests For Quotes as provided in Rule 24B.4(a)(5)(iv)] at least that percentage of electronic Request for Quotes as determined by the Exchange respecting a class of FLEX Options to which the FLEX Appointed Market-Maker is appointed, provided that such percentage shall not be less than 80%. Except as provided in paragraph (d) of this Rule 24B.9, a FLEX Qualified Market-Maker may, but shall not be obligated to, enter a FLEX Quote in response to a Request for Quotes on a FLEX Option of the class in which the FLEX Qualified Market-Maker is qualified. Every FLEX Quote entered by a FLEX Appointed Market-Maker or a FLEX Qualified Market-Maker [shall meet or exceed the minimum size parameters set forth in Rule 24B.4(a)(5)(iv) and] shall be entered within the indicated RFQ Response Period plus any applicable BBO Improvement Interval. Unless withdrawn or modified during the RFQ Response Period, such FLEX Quotes shall be considered firm for the duration of the RFQ Response and Reaction Periods and, in the event the FLEX Quote is the BBO, the BBO Improvement Interval.

* * * * * _________________________________________________________________________________ SR-CBOE-2011-017 Proxy Voting On February 10, 2011, the Exchange filed Rule Change File No. SR-CBOE-2011-017, which filing proposes to amend the Exchange’s proxy voting rules in accordance with provisions of Section 957 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Any questions regarding the rule change may be directed to Jennifer Lamie, Legal Division, at 312-786-7576. The rule text is shown below and the rule filing is available at https://www.cboe.org/publish/RuleFilingsSEC/SR-CBOE-2011-017.pdf.

Rule 31.85 - Giving Proxies by TPH Organization

* * * * * (b) When a TPH organization may not vote without customer instructions—A TPH organization may not give or authorize a proxy to vote without instructions from beneficial owners when the matter to be voted upon:

February 11, 2011 Volume RG22 , Number 6 10 * * * * *



(12) authorizes the implementation of any equity compensation plan, or any material revision to the terms of any existing equity compensation plan (whether or not shareholder approval of such plan is required by Rule 31.79); Commentary to Item 12: A TPH organization may not give or authorize a proxy to vote without instructions on a matter relating to executive compensation, even if such matter would otherwise qualify for an exception from the requirements of Item 12, Item 13 or any other Item under this Rule 31.85. See Item 21.

(13) authorizes— (i) a new profit-sharing or special remuneration plan, or a new retirement

plan, the annual cost of which will amount to more than 10% of average annual income before taxes for the preceding five years, or

(ii) the amendment of an existing plan which would bring its costs above 10% of such average annual income before taxes. Exception may be made in cases of:

(i) retirement plans based on agreement or negotiations with labor unions (or which have been or are to be approved by such unions) and

(ii) any related retirement plan for benefit of non-union employees having terms substantially equivalent to the terms of such union-negotiated plan which is submitted for action of stockholders concurrently with such union-negotiated plan;

Commentary to Item 13: A TPH organization may not give or authorize a proxy to vote without instructions on a matter relating to executive compensation, even if such matter would otherwise qualify for an exception from the requirements of Item 12, Item 13 or any other Item under this Rule 31.85. See Item 21.

* * * * * (19) is the election of a member of the board of directors of an issuer[, provided,

however, that this prohibition shall not apply in the case of a company registered under the Investment Company Act of 1940: or] (except for a vote with respect to the uncontested election of a member of the board of directors of any investment company registered under the Investment Company Act of 1940;

(20) materially amends an investment advisory contract with an investment company[.]; Commentary to Item 20: A material amendment to an investment advisory contract would include any proposal to obtain shareholder approval of an investment company’s investment advisory contract with a new investment adviser, which approval is required by the Investment Company Act of 1940, as amended (the “1940 Act”), and the rules thereunder. Such approval will be deemed to be a “matter which may affect substantially the rights or privileges of such stock” for purposes of this rule so that a TPH organization may not give or authorize a proxy to vote shares registered in its name absent instruction from the beneficial holder of the shares. As a result, for example, a TPH organization may not give or authorize a proxy to vote shares registered in its name, absent instruction from the beneficial holder of the shares, on any proposal to obtain shareholder approval required by the 1940 Act of an investment advisory contract between an investment company and a new investment adviser due to an assignment of the investment company’s investment advisory contract, including an assignment caused by a change in control of the investment adviser that is party to the assigned contract.

(21) relates to executive compensation; or


Commentary to Item 21: A matter relating to executive compensation would include, among other things, the items referred to in Section 14A of the Exchange Act (added by Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act), including (i) an advisory vote to approve the compensation of executives, (ii) a vote on whether to hold such an advisory vote every one, two or three years, and (iii) an advisory vote to approve any type


of compensation (whether present, deferred, or contingent) that is based on or otherwise relates to an acquisition, merger, consolidation, sale, or other disposition of all or substantially all of the assets of an issuer and the aggregate total of all such compensation that may (and the conditions upon which it may) be paid or become payable to or on behalf of an executive officer. In addition, a TPH organization may not give or authorize a proxy to vote without instructions on a matter relating to executive compensation, even if such matter would otherwise qualify for an exception from the requirements of Item 12, Item 13 or any other Item under this Rule 31.85. Any vote on these or similar executive compensation-related matters is subject to the requirements of Rule 31.85.

(22) is any other significant matter, as determined by the Commission, by rule. * * * * *

Chapter L – CBOE Stock Exchange (CBSX) Rules

* * * * * Appendix A—Applicability of Rules of the Exchange Existing Rule

Supplemented By

* * * * * 31.85 Giving Proxies by TPH Organization

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