TRADING PERMIT INFORMATION FOR 10/7/10 THROUGH 10/13/10

ExchangeBulletinOctober 15, 2010 Volume 38, Number 42

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 registration@cboe.com. 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 registration@cboe.com or by phone at 312-786-7449.

Copyright © 2010 Chicago Board Options Exchange, Incorporated

TRADING PERMIT APPLICATIONS RECEIVED FOR WHICH BULLETIN PUBLICATION IS REQUIRED

Individual Applicants

Kathleen Rowan, Nominee Dart Executions LLC625 W. Jackson, #411Chicago, IL 60661

Thom R. Williams, Nominee Stifel, Nicolaus & Company, Incorporated336 Papin AvenueSt. Louis, MO 63102

William Coppa, Nominee U.S. Securities Intl. Corp1317 Shore ParkwayBrooklyn, NY 11214

Member Organization Applicants

OX Trading LLC Thomas E. Stern, Nominee311 W. Monroe, Suite 1000Chicago, IL 60606 Peter J. Bottini – President/Director OptionsXpress Holdings Inc. – Sole Member Thomas E. Stern – CFO/Secretary/Director/CCO

TERMINATIONS

Individuals

Nominee: Termination Date

John A. Kinahan (KIN) 10/8/10Group One Trading, L.P.

EFFECTIVE TRADING PERMIT HOLDERS

Individuals

Nominee: Effective Date

Jason Salvador (SAL) 10/8/10Group One Trading, L.P.Type of Business to be Conducted: Market Maker

Arthur N. Minetz (MTZ) 10/8/10Group One Trading, L.P.Type of Business to be Conducted: Market Maker

Eric Weaver (WVR) 10/8/10Group One Trading, L.P.Type of Business to be Conducted: Market Maker

Daniel R. Fitzgibbon (FIT) 10/8/10Quiet Light Securities LLCType of Business to be Conducted: Market Maker

Greg Bryan Coleman (GBH) 10/12/10Nico Securities, LLCType of Business to be Conducted: Market Maker

Individual Effective Date

Peter J. Bottini 10/13/10From: Nominee For OptionsXpress, Inc.; No Trading FunctionTo: Nominee For OptionsXpress, Inc.; Proprietary Trading Permit Holder

TPH Organization Effective Date

OptionsXpress, Inc. 10/13/10From: Firm/TPH Holder Approved to Transact Business with the Public/Clearing Trading Permit Holder; Associated with No Trade FunctionTo: Firm/TPH Holder Approved to Transact Business with the Public/Clearing Trading Permit Holder; Associated with a Proprietary Trading Permit Holder

Page 2 October 15, 2010 Volume 38, Number 42 Chicago Board Options Exchange

Research Circular #RS10-565October 13, 2010Phoenix Technologies Ltd. (“PTEC”) Proposed Mergerwith Pharaoh Acquisition Corp.

Research Circular #RS10-566October 13, 2010Dynergy Inc. (“DYN”) Proposed Mergerwith The Blackstone Group L.P. (“BX”)

Research Circular #RS10-567October 13, 2010Diamond Management & Technology Consultants, Inc. (“DTPI”) Proposed Merger with PricewaterhouseCoopers LLP

Research Circular #RS10-569October 13, 2010Satyam Computer Services Ltd. (“SAY”)American Depositary Share/Option Symbol Change to “SAYCY”Effective Date: October 14, 2010

Research Circular #RS10-570October 13, 2010McAfee, Inc. (“MFE”) Proposed Mergerwith Intel Corporation (“INTC”)

Research Circular #RS10-571October 14, 2010National Bank of Greece S.A. (“NBG”)Cash Distribution in Lieu of RightsEx-Date: October 15, 2010

Research Circular #RS10-572October 14, 2010Repros Therapeutics, Inc. (“RPRX”)1-for-4 Reverse Stock SplitEx-Distribution Date: October 15, 2010

RESEARCH CIRCULARS The following Research Circulars were distributed between October 8, and October 14, 2010. 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 #RS10-557October 8, 2010MembersICx Technologies, Inc. ("ICXT"):Merger Completed -- Cash Settlement

Research Circular #RS10-558October 8, 2010Banco Santander, S.A. (“STD & adj. STD1”)Distribution in Lieu of Rights - ElectionEx-Date: October 12, 2010

Research Circular #RS10-559October 11, 2010Jones Apparel Group, Inc. (“JNY”) Name Change to: The Jones Group Inc.Effective Date: October 18, 2010

Research Circular #RS10-560October 11, 2010Cogent, Inc. (“COGT”)Subsequent Tender Offer by Ventura Acquisition Corporation

Research Circular #RS10-562October 11, 2010Silgan Holdings Inc. (“SLGN”)Partial Self Tender Offer

Research Circular #RS10-563October 12, 2010BioTime, Inc. (“BTIM”)Stock and Option Symbol Change to (“BTX”)Effective Date: November 2, 2010

Research Circular #RS10-564October 12, 2010ZymoGenetics, Inc. (“ZGEN”):Merger Completed -- Cash Settlement

October 15, 2010 Volume RB21, Number 42

______________________________________________________________________________

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 © 2010 Chicago Board Options Exchange, Incorporated.

REGULATORY CIRCULARS

Regulatory Circular RG10-103 To: Trading Permit Holders From: Department of Regulated Entities Date: October 11, 2010 Re: SEC Staff Issues Guidance on Rule 201 of Regulation SHO The SEC’s Division of Trading and Markets recently issued guidance in the form of an FAQ on Rule 201 of Regulation SHO, which pertains to the short sale price test restriction for NMS stocks. Compliance with the new rule is required as of November 10, 2010. The FAQ can be viewed at http://www.sec.gov/divisions/marketreg/rule201faq.htm. Any questions about this circular may be directed to the Department of Regulated Entities at (312) 786-7325. ____________________________________________________________________________________ Regulatory Circular RG10-104 Date: October 13, 2010 To: Trading Permit Holders From: Market Quality Assurance Department Re: Trading Permit Holder On-Line Appointment System The purpose of this circular is to remind Trading Permit Holders (TPH) that the CBOE rebalances the appointment tiers once each calendar quarter. Each TPH will receive notice via email of their current appointments and the revised appointment costs following the rebalancing. All TPHs will be required to be in compliance with the 1.0 appointment credit at the time the rebalance becomes effective. The next rebalancing will become effective on November 1, 2010. TPHs must review their current appointments

October 15, 2010 Volume RB21, Number 42 1

and submit any desired changes to their appointments based on the new appointment cost prior to November 1, 2010. During the entire month of rebalancing (January/April/July/October), when a new appointment is added that does not put the TPH over it’s appointment weight based on the rebalancing, a pop up window will ask if they would like that appointment to also be added to the future appointments. The TPH should click “Yes” or this class will not be carried over to their appointments following the rebalance. Please also note that if the rebalance causes a TPH to be over their total permits for the upcoming quarter, a red message will display once the user has logged into the appointment site. At this time, classes will only be allowed to be added to the current appointments. THESE CLASSES WILL NOT BE CARRIED OVER TO THEIR APPOINTMENTS following the rebalancing. TPHs are encouraged to utilize a report on the appointments system called ‘Current Not in Future’ to see any class appointments that will not carry over following the rebalance, effective November 1, 2010. On-Line Appointment System Access In order to sign up for access to the Internet appointment system, please send an email to MQA@cboe.com that includes the following information: Firm Name, access level requested (firm or individual), the acronym that is requesting access and the external IP address of the computer that will be used to access the site.

Additional Information

If you have any questions regarding the TPH Internet appointment system or appointment rebalance, please contact the Department of Market Quality Assurance, at (312) 786-7198. ____________________________________________________________________________________ Regulatory Circular RG10-105 Date: October 13, 2010 To: CBOE and CBSX Trading Permit Holders, Trading Permit Holder Applicants, and

Persons Associated with Trading Permit Holders From: Legal Division Re: Statutory Disqualifications

Definition of Statutory Disqualification Pursuant to Section 3(a)(39) of the Securities Exchange Act of 1934 ("Act"), a person is subject to a statutory disqualification if, among other things, the person: (i) has been convicted within the preceding 10 years of any felony; (ii) has been convicted within the preceding 10 years of any misdemeanor involving a

securities transaction, the securities business, the making of a false report, bribery, perjury, burglary, or the misappropriation of funds or securities;

(iii) is barred or suspended from membership in a self-regulatory organization ("SRO") or from

being associated with a member of an SRO;

October 15, 2010 Volume RB21, Number 42 2

(iv) is barred or suspended by the Securities and Exchange Commission ("SEC") or the

Commodity Futures Trading Commission; (v) is barred by a state securities or insurance authority or a federal or state banking authority; (vi) is enjoined from any action, conduct, or practice in connection with the securities or

commodities industry or securities or commodities transactions; (vii) has willfully violated federal securities or commodities law or aided, abetted, or counseled

others to do so; or (viii) has willfully made in any application, report, or proceeding of an SRO a false or misleading

statement as to a material fact or has willfully omitted to state a material fact that was required to be stated in any such application, report, or proceeding.

Trading Permit Holders Who Become Subject to a Statutory Disqualification If a Trading Permit Holder is or becomes subject to a statutory disqualification and wants to continue acting as a Trading Permit Holder, the Trading Permit Holder must, within 10 days of becoming subject to the statutory disqualification, submit an application to the Registration Services Department pursuant to CBOE Rule 3.18 seeking to continue acting as a Trading Permit Holder notwithstanding the statutory disqualification. The application consists of the completion of a Form U-4 for information gathering purposes, including applicable disclosure reporting pages, and should be accompanied by copies of all documents that are contained in the record of the underlying proceeding that triggered the statutory disqualification. The Registration Services Department may also request other information from the Trading Permit Holder and from any other Trading Permit Holder or associated person in connection with the proceeding. Failure to timely file such an application is a factor that may be taken into consideration by the Exchange in rendering its decision with respect to the application. Following the receipt of the application, or in the event the Exchange becomes aware that the Trading Permit Holder is subject to a statutory disqualification and has not timely submitted an application, a three person panel, composed of Trading Permit Holders appointed by the Exchange, holds a hearing to determine whether to permit the Trading Permit Holder to continue acting as a Trading Permit Holder, and if so, whether to condition such continuance as a Trading Permit Holder. The Trading Permit Holder is required to attend the hearing. The panel may also request information from the Trading Permit Holder and require any other Trading Permit Holder or associated person to provide information or to testify at the hearing. During the hearing, the Trading Permit Holder and Exchange staff are afforded an opportunity to present relevant information, arguments, and witnesses. The panel regulates the conduct of the hearing, and formal rules of evidence do not apply. Following the hearing, the panel presents its recommended decision to an Exchange designee, which may ratify or amend the decision. The Executive Committee may determine within 7 days after issuance of the decision to the Trading Permit Holder to order review of the decision pursuant to Rule 3.18(h). If the Executive Committee does not order review of the decision, the decision becomes the final decision of the Exchange. If the Executive Committee orders review of the decision, the decision of the Executive Committee with respect to that review is the final decision of the Exchange. No determination to permit, not permit or conditionally permit the continuation of the Trading Permit Holder’s status as a Trading Permit Holder shall take effect until the above review procedures have been exhausted or the time for review has expired.

October 15, 2010 Volume RB21, Number 42 3

The Exchange may waive the provisions of Rule 3.18 when a proceeding is pending before

another SRO to determine whether to permit a Trading Permit Holder to continue acting as a Trading Permit Holder notwithstanding a statutory disqualification. In the event the Exchange determines to waive the provisions of CBOE Rule 3.18 with respect to a Trading Permit Holder, the Department of Member Firm Regulation determines whether the Exchange will concur in any Rule 19h-1 filing made by another SRO with respect to the Trading Permit Holder. The Department of Member Firm Regulation also ordinarily determines whether to concur in a Rule 19h-1 filing made by another SRO with respect to a Trading Permit Holder applicant.

The Exchange may also waive the hearing provisions of Rule 3.18 with respect to a Trading

Permit Holder if the Exchange intends to grant the Trading Permit Holder’s application and either (i) Exchange Act Rule 19h-1(a)(2) or Exchange Act Rule 19h-1(a)(3) does not require the Exchange to make a notice filing with the SEC to permit the Trading Permit Holder to continue as a Trading Permit Holder; or (ii) the Exchange determines that it is otherwise appropriate to waive the hearing provisions of Rule 3.18 under the circumstances. Trading Permit Holder Applicants Who Are Subject to a Statutory Disqualification Under CBOE Rule 3.5(b), the Exchange may deny a Trading Permit application, or grant conditional approval, to any Trading Permit Holder applicant that is subject to a statutory disqualification. Before making any determination with respect to a Trading Permit Holder applicant that is subject to a statutory disqualification, the Exchange will review the matter. The Exchange reviews any application materials submitted by the applicant. Pursuant to CBOE Rule 3.9(i), the Exchange may request from the applicant and associated persons of the applicant any additional information that the Exchange deems relevant. Following the Exchange's review of any application materials and any additional requested information, the Exchange conducts an in-person interview of the applicant and may conduct in-person interviews of other persons associated with the applicant, such as the applicant's supervisor(s). Any Trading Permit Holder that is denied or granted conditional Trading Permit Holder status may appeal the Exchange's decision to the Appeals Committee pursuant to Chapter XIX of the Exchange's rules, and may appeal the Appeals Committee's decision to the Board of Directors pursuant to CBOE Rule 19.5.

SEC Approval Process In the event that (i) the Exchange decides that a Trading Permit Holder that is subject to a statutory disqualification may continue acting as a Trading Permit Holder, (ii) the Exchange approves the Trading Permit Holder application of an applicant that is subject to a statutory disqualification, or (iii) the Exchange does either of the foregoing subject to specified conditions placed on the effected Trading Permit Holder or applicant (such as a limitation on activities or functions), any such decision is subject to the approval of the SEC. Specifically, SEC Rule 19h-1 requires that in order for a person who is subject to a statutory disqualification to continue as a Trading Permit Holder or be admitted as a Trading Permit Holder, the Exchange must request SEC approval of that action by submitting a Rule 19h-1 filing to the SEC and the SEC must approve the action. A Rule 19h-1 filing is an extensive filing which is required to set forth various information concerning the person that is the subject of the filing, the person's statutory disqualification, and the firm,

October 15, 2010 Volume RB21, Number 42 4

if any, with which the person is associated or intends to associate. In addition, if the person that is the subject of the filing is associated or intends to associate with a firm that is a Trading Permit Holder of the Exchange and a member of another SRO, the SEC takes into consideration whether the other SRO concurs with the Exchange's request in determining whether to grant the Exchange's request. The status of a person who is subject to a statutory disqualification and on whose behalf the Exchange determines to make a Rule 19h-1 filing remains unchanged during the Rule 19h-1 filing process. Thus, a Trading Permit Holder applicant that is subject to a statutory disqualification may not become a Trading Permit Holder of the Exchange unless and until the SEC approves the Rule 19h-1 filing made by the Exchange on the person's behalf. Similarly, as long as a Trading Permit Holder who is subject to a statutory disqualification otherwise remains a Trading Permit Holder of the Exchange in good standing, the Trading Permit Holder is permitted to remain as an Exchange Trading Permit Holder pending the SEC's determination as to whether to approve the Rule 19h-1 filing made by the Exchange on the Trading Permit Holder's behalf. Associated Persons Who Become or Are Subject to a Statutory Disqualification The above-described rules and procedures apply to any person associated with an Exchange Trading Permit Holder and to any person applying to become associated with an Exchange Trading Permit Holder in the same manner that they apply with respect to Exchange Trading Permit Holders and Trading Permit Holder applicants. Exchange Fees Applicable to Those Who Are Subject to a Statutory Disqualification The Exchange assesses a $2,750 fee whenever a person or entity that is subject to a statutory disqualification (i) is an Exchange Trading Permit Holder applicant or is seeking to be an associated person of an Exchange Trading Permit Holder (except where the Exchange is merely asked to concur in a Rule 19h-1 filing by another SRO) or (ii) 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 3.18. This fee is in addition to any other Trading Permit Holder fees that might be applicable.

In addition, the Exchange assesses a $1,650 fee 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 will require 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 also in addition to any other Trading Permit Holder fees that might be applicable. Reporting Requirements If an associated person of a Trading Permit Holder is or becomes subject to a statutory disqualification, the Trading Permit Holder is required to immediately provide written notice to the Registration Services Department of the name of the associated person, the person's capacity with the Trading Permit Holder, and the nature of the statutory disqualification.

In the event that a Trading Permit Holder is a registered broker-dealer and the Trading Permit Holder or an associated person of the Trading Permit Holder (i) becomes subject to an event that gives rise to a statutory disqualification or (ii) becomes the subject of a proceeding that could result in an event that gives rise to a statutory disqualification, the Trading Permit Holder is required to report the event by promptly filing an amendment to SEC Form BD.

October 15, 2010 Volume RB21, Number 42 5

In addition, in the event that a person maintains any securities industry registrations (e.g., is a registered representative or registered options principal) and the person (i) becomes subject to an event that gives rise to a statutory disqualification or (ii) becomes the subject of an investigation, regulatory complaint, or proceeding that could result in an event that gives rise to a statutory disqualification, the person is required to report the event by promptly filing an amendment to Form U-4. Trading Permit Holders are reminded to question all associated persons for information that could reveal a statutory disqualification, such as by requesting the completion of a Form U4 (even if not filed on WebCRD), prior to their association with the Trading Permit Holder. Any questions regarding this circular may be directed to Kerry Adler at (312) 786-8093. (Regulatory Circular RG03-61 Revised) ____________________________________________________________________________________ Regulatory Circular RG10-106 DATE: October 14, 2010 TO: Trading Permit Holders and TPH organizations FROM: Market Operations Department RE: Restrictions on Transactions in Satyam Computer Services Ltd. (“SAY/SAYCY”) Effective today the NYSE has announced a voluntary delisting of trading in Satyam Computer Services Ltd. (“SAY”). Trading in Satyam Computer Services Ltd. has commenced on the other OTC market under the symbol SAYCY. Trading on the CBOE in existing series of SAYCY options will be subject to the following restrictions. Only closing transactions may be effected in any series of SAYCY options except for (i) opening transactions by Market-Makers executed to accommodate closing transactions of other market participants and (ii) opening transactions by 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 SAYCY 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 6.25. There are no restrictions in place with respect to the exercise of SAYCY options. The provisions of this circular apply to any options on SAYCY traded on CBOE. Any questions regarding this circular may be directed to Kerry Winters at (312) 786-7312 or Tanja Samardzija at (312) 786-7722.

October 15, 2010 Volume RB21, Number 42 6

October 15, 2010 Volume RB21, Number 42 7

CBOE restricted class memos can be accessed from CBOE.org at the following web address:

http://www.cboe.org/Restrictions

R U L E C H A N G E S APPROVED RULE CHANGE(S) The Securities and Exchange Commission (“SEC”) has approved the following change(s) to Exchange rules pursuant to Section 19(b) of the Securities Exchange Act of 1934, as amended (the “Act”). Below, any additions to rule text are underlined, and any deletions are [bracketed]. Copies are available on the CBOE public website at www.cboe.com/legal/effectivefiling.aspx. The effective date of the rule change is the date of approval unless otherwise noted. _________________________________________________________________________________ SR-CBOE-2010-077 Expirations for Certain Broad-Based Index Options On September 13, 2010, the SEC approved Rule Change File No. SR-CBOE-2010-077, which filing permits CBOE to list up to 12 expiration months for broad-based index options upon which the Exchange calculates a volatility index. Any questions regarding the rule change may be directed to Jenny Klebes, Legal Division, at 312-786-7466. The rule text is shown below and the rule filing is available at http://www.cboe.org/publish/RuleFilingsSEC/SR-CBOE-2010-077.pdf.

Rule 24.9—Terms of Index Option Contracts RULE 24.9. (a) (1) No change.

(2) Expiration Months. Index option contracts may expire at three-month intervals or in consecutive months. The Exchange may list up to six expiration months at any one time, but will not list index options that expire more than twelve months out. Notwithstanding the preceding restriction, the Exchange may list up to [seven] twelve expiration months at any one time for [the] any broad-based security index option contracts, including reduced-value and jumbo option contracts, (e.g., DJX, NDX, RUT and SPX) upon which the Exchange calculates a [constant three-month] volatility index.

(A) – (B) No change. (3) – (5) No change.

…Interpretations and Policies .01 - .11 No change.

_________________________________________________________________________________ EFFECTIVE-ON-FILING RULE CHANGE(S) The following rule filing was submitted to the SEC “effective on filing,” and may have taken effect pursuant to Section 19(b)(3) of the Act. It 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 www.cboe.org/legal/effectivefiling.aspx. _________________________________________________________________________________ SR-CBOE-2010-092 $0.50 Strike Program On October 12, 2010, the Exchange filed Rule Change File No. SR-CBOE-2010-092, which filing proposes to expand the $0.50 Strike Program. Specifically, the range of strikes prices that may be listed has been expanded from $1 to $3.50 to $0.50 to $5.50 and the number of eligible classes has been expanded from 5 to 20. Any questions regarding the rule change may be directed to Jenny Klebes, Legal

October 15, 2010 Volume RB21, Number 42 8

Division, at 312-786-7466. The rule text is shown below and the rule filing is available at https://www.cboe.org/publish/RuleFilingsSEC/SR-CBOE-2010-092.pdf. Rule 5.5—Series of Option Contracts Open for Trading

RULE 5.5 No change.

…Interpretations and Policies: .01 The interval between strike prices of series of options on individual stocks may be: a. The $1 Strike Program.

(1) No change. (2) To be eligible for inclusion into the $1 Strike Program, an underlying stock must

close below $50 in its primary market on the previous trading day. After a stock is added to the $1 Strike Program, the Exchange may list $1 strike prices from $1 to $50 that are no more than $5 from the closing price of the underlying on the preceding day. For example, if the underlying stock closes at $13, the Exchange may list strike prices from $8 to $18. The Exchange may not list series with $1.00 intervals within $0.50 of an existing strike price in the same series, except that strike prices of $2, $3, $4, $5 and $[4]6 shall be permitted within $0.50 of an existing strike price for classes also selected to participate in the $0.50 Strike Program. Additionally, the Exchange may not list long-term option series (“LEAPS®”) at $1 strike price intervals for any option class selected for the $1 Strike Program, except as provided in subparagraph 3 below. b. $0.50 or greater beginning at [$1] $0.50 where the strike price is $[3]5.50 or less, but only for options classes whose underlying security closed at or below $[3]5.00 in its primary market on the previous trading day and which have national average daily volume that equals or exceeds 1000 contracts per day as determined by The Options Clearing Corporation during the preceding three calendar months. The listing of $0.50 strike prices shall be limited to options classes overlying no more than [5]20 individual stocks (the “$0.50 Strike Program”) as specifically designated by the Exchange. The Exchange may list $0.50 strike prices on any other option classes if those classes are specifically designated by other securities exchanges that employ a similar $0.50 Strike Program under their respective rules. A stock shall remain in the $0.50 Strike Program until otherwise designated by the Exchange.

c. – e. No change. .02 – 17 No change.

_________________________________________________________________________________ PROPOSED RULE CHANGE(S) Pursuant to Section 19(b)(1) of 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-2010-091 Credit Option Margin Requirements On October 8, 2010, the Exchange filed Rule Change File No. SR-CBOE-2010-091, which filing proposes to amend the margin requirements for Credit Options to be consistent with FINRA’s margin requirements for Credit Default Swaps. Any questions regarding the rule change may be directed to

October 15, 2010 Volume RB21, Number 42 9

Jenny Klebes, Legal Division, at 312-786-7466. The rule text is shown below and the rule filing is available at https://www.cboe.org/publish/RuleFilingsSEC/SR-CBOE-2010-091.pdf.

Rule 12.3—Margin Requirements RULE 12.3 (a) – (k) No changes. (l) Credit Options

(1) Risk Monitoring Procedures and Guidelines Trading Permit Holders are required to monitor the risk of customer and broker-dealer

accounts with exposure to Credit Options and must implement and maintain a comprehensive written risk analysis methodology for assessing the potential risk to the Trading Permit Holder’s capital over a specified range of possible market movements over a specified time period. For purposes of complying with this rule, Trading Permit Holders must employ the risk monitoring procedures and guidelines set forth below in sub-paragraphs (i) through (viii) of this Rule 12.3(l)(1). The Trading Permit Holder must review, in accordance with the Trading Permit Holder’s written procedures, at reasonable periodic intervals, the Trading Permit Holder’s credit extension activities for consistency with the risk monitoring procedures and guidelines set forth in this Rule 12.3(l)(1), and must determine whether the data necessary to apply the risk monitoring procedures and guidelines is accessible on a timely basis and information systems are available to adequately capture, monitor, analyze and report relevant data, including:

(i) obtaining and reviewing the required account documentation and financial information necessary for assessing the amount of credit to be extended to customers and broker-dealers;

(ii) assessing the determination, review and approval of credit limits to each customer and broker-dealer, and across all customers and broker-dealers, engaging in Credit Option transactions;

(iii) monitoring credit risk exposure to the Trading Permit Holder from Credit Options, including the type, scope and frequency of reporting to senior management;

(iv) the use of stress testing of accounts containing Credit Option contracts in order to monitor market risk exposure from individual accounts and in the aggregate;

(v) managing the impact of credit extended related to Credit Option contracts on the Trading Permit Holder’s overall risk exposure;

(vi) determining the need to collect margin from a particular customer or broker-dealer in addition to the amount required by this Rule 12.3(l), including whether such determination was based upon the credit worthiness of the customer or broker-dealer and/or the risk of the specific Credit Option contracts;

(vii) monitoring the credit exposure resulting from concentrated positions within both individual accounts and across all accounts containing Credit Option contracts: and

(viii) maintaining sufficient margin in each customer and broker-dealer account to protect against the default of the largest individual exposure in the account as measured by computing the largest maximum possible loss.

(2) Requiring Additional Margin. Trading Permit Holders shall, based on the risk monitoring procedures and guidelines required above, determine whether the margin required by this Rule 12.3(l) is adequate with respect to their customer and broker-dealer accounts and, where appropriate, increase such requirements.

([1]3) Margin Account -- Credit Default Options. (i) The initial and maintenance margin required on a[ny] Credit Default Option

carried long in a customer['s] or broker-dealer’s account is a percentage of the option’s cash settlement amount (as defined in Rule 29.1) according to the table below [100% of the current market value; provided, however, for the account of a qualified customer, the

October 15, 2010 Volume RB21, Number 42 10

margin is 20% of the current market value. For purposes of this Rule 12.3(l), the term "qualified customer" shall be a person or entity that owns and invests on a discretionary basis no less than $5,000,000 in investments].

Length of Time Until Expiration of the Option

Credit Default Swap (“CDS”) Spread* for the

Reference Entity Underlying the Credit Default

Option

1 Year or Less

Greater than 1

Year / Less Than or Equal to 3

Years

Greater Than 3

Years / Less Than or Equal to

7 Years

Greater Than 7 Years

0 – 100 .5% 1% 2% 3.5% 100 – 300 1% 2.5% 3.5% 5% 300 – 500 2.5% 5% 7.5% 10% 500 – 700 5% 7.5% 10% 12.5% 700 & above 7.5% 10% 12.5% 15% * Over LIBOR, in basis points.

(ii) The initial and maintenance margin required on any Credit Default Option carried short in a customer['s] or broker-dealer’s account is a percentage of the option’s cash settlement amount (as defined in Rule 29.1) according to the table below[is the cash settlement amount as defined in Rule 29.1; provided, however, for the account of a qualified customer, the margin is the lesser of the current market value plus 20% of the cash settlement amount defined in Rule 29.1 or the cash settlement amount].

Length of Time Until Expiration of the Option

Credit Default Swap (“CDS”) Spread* for the

Reference Entity Underlying the Credit Default

Option

1 Year or Less

Greater than 1

Year / Less Than or Equal to 3

Years

Greater Than 3

Years / Less Than or Equal to

7 Years

Greater Than 7 Years

0 – 100 1% 2% 4% 7% 100 – 300 2% 5% 7% 10% 300 – 500 5% 10% 15% 20% 500 – 700 10% 15% 20% 25% 700 & above 15% 20% 25% 30% * Over LIBOR, in basis points.

(iii) Debt Security Offset. If an account is short a Credit Default Option and also has a short position in a debt security issued by the Reference Entity underlying the option, and the principal amount of the debt security is equal to: the cash settlement amount of the option multiplied by 1.33, no margin is required on the Credit Default Option. [Credit Default Option margin requirements may be satisfied by a deposit of cash or marginable securities.] ([2]4) Margin Account - Credit Default Basket Options.

(i) The initial and maintenance margin required on a[ny] Credit Default Basket Option carried long in a customer['s] or broker-dealer’s account is a percentage of the option’s cash settlement amount (as defined in Rule 29.1) according to the table below[100% of the current market value; provided, however, for the account of a qualified customer (as defined above), the margin is 15% of the current market value]. In the case of a Single Payout Credit Default Basket Option, the cash settlement amount to

October 15, 2010 Volume RB21, Number 42 11

be used is the one that is the highest among the basket components, and in the case of a Multiple Payout Credit Default Basket Option, the cash settlement amount to be used is 50% of the sum of each basket component’s cash settlement amount.

Length of Time Until Expiration of the Option

Average Credit

Default Swap (“CDS”)

Spread* of the Basket Component Reference Entities

1 Year or

Less

Greater than 1

Year / Less Than or Equal

to 3 Years

Greater than 3 Years / Less

Than or Equal to 5 Years

Greater Than 5 Years / Less Than or Equal

to 7 Years

Greater Than 7

Years

0 – 200 .5% .5% 1% 2% 2.5% 200-500 1% 1.5% 2% 2.5% 3.5% 500 & above 1.5% 2.5% 5% 6% 7.5% * Over LIBOR, in basis points.

(ii) The initial and maintenance margin required on a[ny] Credit Default Basket Option carried short in a customer['s] or broker-dealer’s account is a percentage of the option’s cash settlement amount (as defined in Rule 29.1) according to the table below. In the case of a Single Payout Credit Default Basket Option, the cash settlement amount to be used is the one that is the highest among the basket components, and in the case of a Multiple Payout Credit Default Basket Option, the cash settlement amount to be used is 50% of the sum of each basket component’s cash settlement amount. [as follows:

(A) for Multiple Payout Credit Default Basket Options, the sum of each Basket Component's cash settlement amount as defined in Rule 29.1; provided, however, for the account of a qualified customer (as defined above), the margin is the lesser of the current market value plus 15% of the sum of each Basket Component's cash settlement amount as defined in Rule 29.1 or of the sum of each Basket Component's cash settlement amount; or

(B) or Single Payout Credit Default Options, the Basket Component cash settlement amount as defined in Rule 29.1 that is the highest; provided, however, for the account of a qualified customer (as defined above), the margin is the lesser of the current market value plus 15% of the Basket Component cash settlement amount defined in Rule 29.1 that is the highest or the Basket Component cash settlement amount that is the highest.]

Length of Time Until Expiration of the Option

Average Credit

Default Swap (“CDS”)

Spread* of the Basket Component Reference Entities

1 Year or

Less

Greater than 1

Year / Less Than or Equal

to 3 Years

Greater than 3 Years / Less

Than or Equal to 5 Years

Greater Than 5 Years / Less Than or Equal

to 7 Years

Greater Than 7

Years

0 – 200 1% 1% 2% 4% 5% 200-500 2% 3% 4% 5% 7% 500 & above 3% 5% 10% 12% 15% * Over LIBOR, in basis points.

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(5) Spreads. If an account is short a Credit Option and is also long a Credit Option with the same underlying Reference Obligation(s), and the long option is paid for in full, and the long option does not expire before the short option, no margin is required

([(iii)]6) Credit [Default Basket ]Option margin requirements may be satisfied by a deposit of cash or marginable securities.

(7) Concentrations. If, across all accounts, the maximum exposure in Credit Option contracts overlying any single Reference Entity exceeds the Trading Permit Holder’s tentative net capital, the Trading Permit Holder must deduct from net capital an amount equal to the aggregate margin requirement for all such accounts on the Credit Option contracts (including Credit Default Basket Options having the subject Reference Entity as a component) overlying such single Reference Entity, as specified in this Rule 12.3(l). This deduction from net capital may be reduced by the amount of excess margin held in all customer and broker-dealer accounts.

([3]8) Cash Account --Credit Default Options. A Credit Default Option carried short in a customer's account is deemed a covered position, and eligible for the cash account, provided any one of the following either is held in the account at the time the option is written or is received into the account promptly thereafter:

(i) cash or cash equivalents equal to 100% of the cash settlement amount as defined in Rule 29.1; or

(ii) an escrow agreement. The escrow agreement must certify that the bank holds for the account of the customer as security for the agreement (A) cash, (B) cash equivalents, (C) one or more qualified equity securities, or (D) a combination thereof having an aggregate market value of not less than 100% of the cash settlement amount as defined in Rule 29.1 and that the bank will promptly pay the TPH organization the cash settlement amount in the event of a Credit Event as defined in Rule 29.1. ([4]9) Cash Account - Credit Default Basket Options. A Credit Default Basket Option

carried short in a customer's account is deemed a covered position, and eligible for the cash account, provided any one of the following either is held in the account at the time the option is written or is received into the account promptly thereafter:

(i) For Multiple Payout Credit Default Basket Options, cash or cash equivalents equal to [100%] 50% of the sum of each Basket Component's cash settlement amount as defined in Rule 29.1;

(ii) For Single Payout Credit Default Basket Options, cash or cash equivalents equal to 100% of the Basket Component cash settlement amount as defined in Rule 29.1 that is the highest; or

(iii) an escrow agreement. The escrow agreement must certify that the bank holds for the account of the customer as security for the agreement (A) cash, (B) cash equivalents, (C) one or more qualified equity securities, or (D) a combination thereof having an aggregate market value of not less than 100% of the sum of each Basket Component's cash settlement amount as defined in Rule 29.1 in the case of Multiple Payout Credit Default Basket Option or 100% of the Basket Component cash settlement amount as defined in Rule 29.1 that is the highest in the case of a Single Payout Credit Default Basket Option and that the bank will promptly pay the TPH organization the cash settlement amount in the event of a Credit Event as defined in Rule 29.1.

* * * * *

Rule 12.5—Determination of Value for Margin Purposes RULE 12.5. Positions in active securities, except security futures contracts, dealt in on a recognized exchange (including option contracts) shall, for margin purposes, be valued at current market value prices; provided that, whether or not dealt in on an exchange, only those options contracts on a stock or stock index, or a stock index warrant, having an expiration that exceeds 9 months, or a Credit Option as defined in Rule 29.1 [that is carried for the account of a qualified customer], and which are listed or guaranteed by the carrying broker-dealer, may be deemed to have market value for the purposes of Rule 12.3(c). Security futures contracts shall have no value for margin purposes. Positions in other securities shall be valued conservatively in the light of current market prices and the amount of anticipated realization upon a liquidation of the entire position. Substantial additional margin must be required in all cases where the securities carried are subject to unusually rapid or violent changes in value, or where the amount carried is such that they cannot be liquidated promptly.

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ARBITRATION AWARDS Pursuant to Exchange Rule 18.31, Arbitration Awards, for claims filed after September 1, 1989, are publicly available, provided that the name of a public customer will be withheld upon the written request of the customer. Upon written request, copies of Awards are available from the Arbitration Department. Summaries of all Awards are published in the Regulatory Bulletin. In addition, all Awards are provided to the Securities Arbitration Commentator. Awards involving public customers are reported to the Central Registration Depository (CRD). Questions regarding arbitration may be directed to the Arbitration Department at 312-786-8093 or 312-786-7461. _____________________________________________________________________________

Case Name: J. David Fikejs v. John T. Lundy and JTL Investments, LLC Case Number: 09M001 Date Received: November 2, 2009 Summary of Issues: Breach of Contract - LLC Operating Agreement Relief Requested: $680,239.71 ***** Counterclaim: John T. Lundy and JTL Investments, LLC v. J. David Fikejs Relief Requested: $680,239.71 ******* Award on Claim: $0 Award on Counterclaim: $394,238.23 Award Issued: October 5, 2010

October 15, 2010 Volume RB21, Number 42 15