Self-Regulatory Organizations; Chicago Board Options Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No.1 Thereto Relating to the Customer Large Trade Discount Program, 2196-2197 [05-592]

Download as PDF 2196 Federal Register / Vol. 70, No. 8 / Wednesday, January 12, 2005 / Notices making 27 on the Exchange.28 Accordingly, equity specialists may not act as specialists or ROTs in options overlying the stocks in which they are registered, and options specialists and ROTs may not act as specialists in the securities underlying the options in which they are registered. Furthermore, Amex may not move the location of stock and options trading posts such that related stocks and options are traded at the same or adjacent locations on the floor.29 IV. Conclusion It is therefore ordered, pursuant to section 19(b)(2) of the Act,30 that the proposed rule change (SR–Amex–2004– 25), as amended, is approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.31 J. Lynn Taylor, Assistant Secretary. [FR Doc. E5–90 Filed 1–11–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–50962; File No. SR–CBOE– 2004–88] Self-Regulatory Organizations; Chicago Board Options Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No.1 Thereto Relating to the Customer Large Trade Discount Program January 5, 2005. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder 2, notice is hereby given that on December 21, 2004, the Chicago Board Options Exchange, Inc. (‘‘CBOE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by CBOE. On January 3, 2005, CBOE amended the proposed rule 27 ‘‘Integrated market making’’ refers to the trading of securities and related derivative products by the same specialist or specialist firm. See id. at 48233, note 10. 28 The Commission notes that, currently, specified exchange-traded funds and trust issued receipts and their related options may be traded on the Amex by the same Exchange specialist or specialist firm without informational or physical barriers or other restrictions. See id. at 48236. 29 See Securities Exchange Act Release No. 26147 (October 3, 1988), 53 FR 39956 (October 7, 1988). 30 15 U.S.C. 78s(b)(2). 31 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. VerDate jul<14>2003 17:37 Jan 11, 2005 Jkt 205001 change (‘‘Amendment No. 1’’).3 The proposed rule change, as amended, has been filed by CBOE as a noncontroversial filing pursuant to Rule 19b–4(f)(6) under the Act.4 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested parties. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change CBOE proposes to amend its Fee Schedule to make permanent its Customer Large Trade Discount Program (‘‘Program’’) and to lower the contract volume cap beyond which customer transaction fees for its Dow Jones index options would not be assessed. The text of the proposed rule change, as amended, is available at the Office of the Secretary, CBOE and at the Commission. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CBOE included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The CBOE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose In July 2003, the Exchange established a six-month pilot program providing a customer large trade discount in the form of a cap on the quantity of customer contracts that are assessed transaction fees for most CBOE index options.5 The Program has been extended twice and is now due to expire on December 31, 2004.6 The Exchange 3 In Amendment No. 1, CBOE amended the proposed rule change to revise Note 2 to the Exchange’s Fee Schedule to delete the reference to the dates that the pilot program with respect to the Customer Large Discount Trade Program was in effect. 4 17 CFR 240.19b–4(f)(6). 5 See Securities Exchange Act Release No. 48223 (July 24, 2003), 68 FR 44978 (July 31, 2003) (SR– CBOE–2003–26). 6 See Securities Exchange Act Release No. 49118 (January 22, 2004), 69 FR 4335 (January 29, 2004) (SR–CBOE–2003–60), and Securities Exchange Act Release No. 50175 (August 10, 2004), 69 FR 51129 (August 17, 2004) (SR–CBOE–2004–38). PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 proposes to make the Program permanent. According to CBOE, the results of the Program during the pilot period reflect significant savings for CBOE customers as well as a significant increase in the quantity of large orders in the subject options classes executed on the Exchange. The Exchange also proposes lowering the contract volume fee cap for options on the Dow Jones Industrial Average (including options on the Diamonds) to 5,000 from 7,500, to encourage larger orders be sent to the Exchange in these products. Otherwise, all other terms of the Program would remain unchanged. The Exchange intends to implement the lower contract volume fee cap for the Dow Jones index options on January 1, 2005. 2. Statutory Basis The Exchange believes that the proposed rule change, as amended, is consistent with section 6(b) of the Act,7 in general, and furthers the objectives of section 6(b)(4) of the Act 8 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among CBOE members and other persons using its facilities. B. Self-Regulatory Organization’s Statement on Burden on Competition CBOE does not believe that the proposed rule change, as amended, would impose any burden on competition that is not necessary or appropriate in furtherance of purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change, as amended, has become effective pursuant to section 19(b)(3)(A) of the Act 9 and Rule 19b–4(f)(6) thereunder 10 because the proposed rule change: (1) Does not significantly affect the protection of investors or the public interest; (2) does not impose any significant burden on competition; and (3) does not become operative for 30 days from the date of filing, or such 7 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 9 15 U.S.C. 78s(b)(3)(A). 10 17 CFR 240.19b–4(f)(6). 8 15 E:\FR\FM\12JAN1.SGM 12JAN1 Federal Register / Vol. 70, No. 8 / Wednesday, January 12, 2005 / Notices shorter time as the Commission may designate if consistent with the protection of investors and the public interest pursuant to section 19(b)(3)(A) of the Act 11 and Rule 19b–4(f)(6)12 thereunder. In addition, the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of the filing of the proposed rule change as required by Rule 19b–4(f)(6).13 The Exchange has requested that the Commission waive the 30-day operative delay.14 The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. Acceleration of the operative delay will allow customers to continue to benefit from the large trade discount in the form of a cap on the quantity of customer contracts that are assessed transaction fees for most CBOE index options, which otherwise would expire on December 31, 2004. For this reason, the Commission designates the proposed rule change, as amended, to be effective upon filing with the Commission.15 At any time within 60 days of the filing of the proposed rule change the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in the furtherance of the purposes of the Act.16 Number SR–CBOE–2004–88 on the subject line. SECURITIES AND EXCHANGE COMMISSION Paper Comments [Release No. 34–50967; File No. SR–CBOE– 2004–72] IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549–0609. All submissions should refer to File Number SR–CBOE–2004–88. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Section, 450 Fifth Street, NW., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of the CBOE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CBOE– 2004–88 and should be submitted on or before February 2, 2005. Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File For the Commission, by the Division of Market Regulation, pursuant to delegated authority.17 J. Lynn Taylor, Assistant Secretary. [FR Doc. 05–592 Filed 1–11–05; 8:45 am] 11 15 12 17 BILLING CODE 8010–01–P U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 13 Id. 14 17 CFR 240.19b–4(f)(6)(iii). purposes of only accelerating the operative date of this proposal, the Commission has considered the rule’s impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 16 For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under section 19(b)(3)(C) of the Act, the Commission considers that period to commence on January 3, 2005, the date the Exchange filed Amendment No. 1 to the proposed rule change. See 15 U.S.C. 78s(b)(3)(C). 15 For VerDate jul<14>2003 17:37 Jan 11, 2005 Jkt 205001 2197 PO 00000 Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change and Amendment No. 1 by the Chicago Board Options Exchange, Incorporated Relating to the SizeQuote Mechanism January 5, 2005. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on November 10, 2004, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in items I, II, and III below, which items have been prepared by the CBOE. On December 22, 2004, the CBOE filed Amendment No. 1 to the proposed rule change.3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The CBOE proposes to adopt a SizeQuote Mechanism for the execution of large-sized orders in open outcry. The text of the proposed rule change is below. Proposed new language is in italics. * * * * * Rule 6.74 ‘‘Crossing Orders’’ (a)–(e) No change. (f) Open Outcry ‘‘SizeQuote’’ Mechanism (i) SizeQuotes Generally: The SizeQuote Mechanism is a process by which a floor broker (‘‘FB’’) may execute and facilitate large-sized orders in open outcry. Floor brokers must be willing to facilitate the entire size of the order for which they request SizeQuotes (the ‘‘SizeQuote Order’’). The appropriate Market Performance Committee shall determine the classes in which the SizeQuote Mechanism shall apply. The SizeQuote Mechanism will operate as a pilot program which expires [insert date one year from date of approval]. (A) Eligible Order Size: The appropriate MPC shall establish the 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Amendment No. 1 replaces the original filing in its entirety. See e-mail message from Stephen Youhn, Assistant Secretary, CBOE, to Yvonne Fraticelli, Special Counsel, Division of Market Regulation, Commission, on January 5, 2005. 2 17 17 17 CFR 200.30–3(a)(12). Frm 00089 Fmt 4703 Sfmt 4703 E:\FR\FM\12JAN1.SGM 12JAN1

Agencies

[Federal Register Volume 70, Number 8 (Wednesday, January 12, 2005)]
[Notices]
[Pages 2196-2197]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-592]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50962; File No. SR-CBOE-2004-88]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change and Amendment No.1 Thereto Relating to the Customer Large Trade 
Discount Program

January 5, 2005.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder \2\, notice is hereby given 
that on December 21, 2004, the Chicago Board Options Exchange, Inc. 
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by CBOE. On 
January 3, 2005, CBOE amended the proposed rule change (``Amendment No. 
1'').\3\ The proposed rule change, as amended, has been filed by CBOE 
as a non-controversial filing pursuant to Rule 19b-4(f)(6) under the 
Act.\4\ The Commission is publishing this notice to solicit comments on 
the proposed rule change, as amended, from interested parties.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, CBOE amended the proposed rule change to 
revise Note 2 to the Exchange's Fee Schedule to delete the reference 
to the dates that the pilot program with respect to the Customer 
Large Discount Trade Program was in effect.
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE proposes to amend its Fee Schedule to make permanent its 
Customer Large Trade Discount Program (``Program'') and to lower the 
contract volume cap beyond which customer transaction fees for its Dow 
Jones index options would not be assessed. The text of the proposed 
rule change, as amended, is available at the Office of the Secretary, 
CBOE and at the Commission.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, CBOE included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The CBOE has prepared summaries, set forth in Sections 
A, B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    In July 2003, the Exchange established a six-month pilot program 
providing a customer large trade discount in the form of a cap on the 
quantity of customer contracts that are assessed transaction fees for 
most CBOE index options.\5\ The Program has been extended twice and is 
now due to expire on December 31, 2004.\6\ The Exchange proposes to 
make the Program permanent. According to CBOE, the results of the 
Program during the pilot period reflect significant savings for CBOE 
customers as well as a significant increase in the quantity of large 
orders in the subject options classes executed on the Exchange.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 48223 (July 24, 
2003), 68 FR 44978 (July 31, 2003) (SR-CBOE-2003-26).
    \6\ See Securities Exchange Act Release No. 49118 (January 22, 
2004), 69 FR 4335 (January 29, 2004) (SR-CBOE-2003-60), and 
Securities Exchange Act Release No. 50175 (August 10, 2004), 69 FR 
51129 (August 17, 2004) (SR-CBOE-2004-38).
---------------------------------------------------------------------------

    The Exchange also proposes lowering the contract volume fee cap for 
options on the Dow Jones Industrial Average (including options on the 
Diamonds) to 5,000 from 7,500, to encourage larger orders be sent to 
the Exchange in these products. Otherwise, all other terms of the 
Program would remain unchanged. The Exchange intends to implement the 
lower contract volume fee cap for the Dow Jones index options on 
January 1, 2005.
2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is 
consistent with section 6(b) of the Act,\7\ in general, and furthers 
the objectives of section 6(b)(4) of the Act \8\ in particular, in that 
it is designed to provide for the equitable allocation of reasonable 
dues, fees, and other charges among CBOE members and other persons 
using its facilities.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    CBOE does not believe that the proposed rule change, as amended, 
would impose any burden on competition that is not necessary or 
appropriate in furtherance of purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing proposed rule change, as amended, has become 
effective pursuant to section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6) thereunder \10\ because the proposed rule change: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) does not become operative for 30 days from the date of filing, 
or such

[[Page 2197]]

shorter time as the Commission may designate if consistent with the 
protection of investors and the public interest pursuant to section 
19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6)\12\ thereunder. In 
addition, the Exchange provided the Commission with written notice of 
its intent to file the proposed rule change, along with a brief 
description and text of the proposed rule change, at least five 
business days prior to the date of the filing of the proposed rule 
change as required by Rule 19b-4(f)(6).\13\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ Id.
---------------------------------------------------------------------------

    The Exchange has requested that the Commission waive the 30-day 
operative delay.\14\ The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. Acceleration of the operative delay will allow 
customers to continue to benefit from the large trade discount in the 
form of a cap on the quantity of customer contracts that are assessed 
transaction fees for most CBOE index options, which otherwise would 
expire on December 31, 2004. For this reason, the Commission designates 
the proposed rule change, as amended, to be effective upon filing with 
the Commission.\15\
---------------------------------------------------------------------------

    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ For purposes of only accelerating the operative date of 
this proposal, the Commission has considered the rule's impact on 
efficiency, competition and capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in the furtherance of the purposes of the Act.\16\
---------------------------------------------------------------------------

    \16\ For purposes of calculating the 60-day period within which 
the Commission may summarily abrogate the proposed rule change under 
section 19(b)(3)(C) of the Act, the Commission considers that period 
to commence on January 3, 2005, the date the Exchange filed 
Amendment No. 1 to the proposed rule change. See 15 U.S.C. 
78s(b)(3)(C).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2004-88 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-CBOE-2004-88. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for inspection 
and copying in the Commission's Public Reference Section, 450 Fifth 
Street, NW., Washington, DC 20549. Copies of such filing also will be 
available for inspection and copying at the principal office of the 
CBOE. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
CBOE-2004-88 and should be submitted on or before February 2, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

    \17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 05-592 Filed 1-11-05; 8:45 am]
BILLING CODE 8010-01-P
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