Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Chicago Board Options Exchange, Inc. Relating to Allocations of Securities, 2910-2911 [E5-150]
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2910
Federal Register / Vol. 70, No. 11 / Tuesday, January 18, 2005 / Notices
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.4
Jonathan G. Katz,
Secretary.
[FR Doc. E5–153 Filed 1–14–05; 8:45 am]
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections (A), (B), and (C) below,
of the most significant parts of such
statements.
BILLING CODE 8010–01–P
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51007; File No. SR–CBOE–
2005–03]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by the
Chicago Board Options Exchange, Inc.
Relating to Allocations of Securities
January 10, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 1 and
Rule 19b–4 thereunder,2 notice is
hereby given that on January 7, 2005,
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, II, and III below, which Items
have been prepared by the CBOE. The
Exchange has filed this proposed rule
change pursuant to Section 19(b)(3)(A)
of the Act 3 and Rule 19b–4(f)(1)
thereunder,4 which renders the proposal
effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to adopt an
Interpretation to CBOE Rule 8.95
relating to temporary allocations of
securities. The text of the proposed rule
change is available at the CBOE’s Office
of the Secretary and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange 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
5 The term ‘‘trading platform,’’ for purposes of
this rule filing, refers to the system by which a
security trades. A security may trade using a DPM
system, an LMM system, or upon approval of SR–
CBOE–2004–87, with a Market-Maker system
without a DPM or LMM.
4 17
CFR 200.30–3(a)(1).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(1).
1 15
VerDate jul<14>2003
11:51 Jan 14, 2005
1. Purpose
CBOE Rule 8.95 governs the
allocation of securities on the Exchange
and generally provides a framework by
which the Allocation or Special Product
Assignment Committee determines
whether to allocate a security to a
trading crowd or a Designated Primary
Market-Maker (‘‘DPM’’). Paragraph (b)
gives these Committees the ability to
consider any factors they believe to be
relevant in making such determinations.
The purpose of this rule filing is to
adopt Interpretations and Policies .05
(‘‘I&P .05’’) to CBOE Rule 8.95 to clarify
that the Exchange has the authority to
grant a temporary allocation.
In this regard, the Exchange
anticipates listing on the Hybrid
Trading System (‘‘Hybrid’’) new option
classes on ETFs and possibly indexes in
the very near future. Currently, index
options and options on ETFs (‘‘indexbased products’’) may only trade on
Hybrid if they have an assigned DPM,
which precludes the trading of an
index-based product on Hybrid using an
LMM system or a trading crowd with
only Market-Makers. In December, the
Exchange filed SR–CBOE–2004–87,
which would allow it to trade these
index-based products without a DPM.
Upon approval of that rule filing, the
Exchange would like the ability to
reconsider changing the trading
platform 5 with respect to these indexbased products in order to determine if
the product should trade in a non-DPM
environment.
Accordingly, proposed I&P .05
provides the ability to grant initial
allocations on a temporary basis and at
any point within one year to reallocate
the security such that it trades on a
different trading platform (e.g., from a
DPM to a non-DPM trading crowd or
vice versa). The proposed I&P provides
that the Special Product Assignment or
Allocation Committee may make
temporary allocations of securities
either to a DPM or a non-DPM trading
Jkt 205001
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Frm 00074
Fmt 4703
Sfmt 4703
crowd by explicitly indicating to such
DPM or non-DPM trading crowd at the
time of allocation that the allocation is
temporary. The Committee that made
the temporary allocation may, at any
time during the first twelve months
following the granting of the temporary
allocation, determine it is in the best
interest of the Exchange to reallocate the
security such that: (i) A security initially
allocated to a DPM is reallocated to a
non-DPM trading crowd; or (ii) a
security initially allocated to a non-DPM
trading crowd is reallocated to a DPM.
While proposed I&P .05 establishes the
right to make temporary allocations,
nothing in this proposal eliminates the
ability of the appropriate committee to
take action in accordance with existing
paragraphs (c) and (d) of CBOE Rule
8.95.
2. Statutory Basis
CBOE believes the proposed rule
change is consistent with the Act and
the rules and regulations under the Act
applicable to a national securities
exchange and, in particular, the
requirements of Section 6(b) of the Act.6
Specifically, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) of the Act,7 which
requires, among other things, that the
rules of an exchange be designed to
promote just and equitable principles of
trade, to prevent fraudulent and
manipulative acts and, in general, to
protect investors and the public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CBOE does not believe that the
proposed rule change will impose any
burden on competition not necessary or
appropriate in furtherance of the
purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange neither solicited nor
received written comments on the
proposed rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change is
immediately effective pursuant to
Section 19(b)(3)(A) of the Act 8 and Rule
19b–4(f)(1) thereunder,9 because it
constitutes a stated policy, practice, or
interpretation with respect to the
6 15
U.S.C. 78f(b).
U.S.C. 78(f)(b)(5).
8 15 U.S.C. 78s(b)(3)(A).
9 17 CFR 240.19b–4(f)(1).
7 15
E:\FR\FM\18JAN1.SGM
18JAN1
Federal Register / Vol. 70, No. 11 / Tuesday, January 18, 2005 / Notices
meaning, administration, or
enforcement of an existing rule. At any
time within 60 days of the filing of such
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 furtherance of the purposes of the
Act.
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 rulecomments@sec.gov. Please include File
Number SR–CBOE–2005–03 on the
subject line.
available publicly. All submissions
should refer to File Number SR–CBOE–
2005–03 and should be submitted on or
before February 8, 2005.
in Item IV below. FICC has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.2
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.10
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5–150 Filed 1–14–05; 8:45 am]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51018; File No. SR–FICC–
2004–14]
Self-Regulatory Organizations; Fixed
Income Clearing Corporation; Notice of
Filing of a Proposed Rule Change
Relating to Membership Requirements
January 11, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
July 14, 2004, the Fixed Income Clearing
Corporation (‘‘FICC’’) filed with the
Securities and Exchange Commission
Paper Comments
(‘‘Commission’’) proposed rule change
• Send paper comments in triplicate
SR–FICC–2004–14. On July 15, July 30,
to Jonathan G. Katz, Secretary,
August 20, and November 10, 2004,
Securities and Exchange Commission,
FICC filed amendments 1, 2, 3, and 4
450 Fifth Street, NW., Washington, DC
respectively. On January 3, 2005, FICC
20549–0609.
filed amendment 5 and withdrew
All submissions should refer to File
amendments 1, 2, 3, and 4. The
Number SR–CBOE–2005–03. This file
proposed rule change, as amended, is
number should be included on the
subject line if e-mail is used. To help the described in Items I, II, and III below,
which Items have been prepared
Commission process and review your
primarily by FICC. The Commission is
comments more efficiently, please use
only one method. The Commission will publishing this notice to solicit
post all comments on the Commission’s comments on the proposed rule change
from interested persons.
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
I. Self-Regulatory Organization’s
submission, all subsequent
Statement of the Terms of Substance of
amendments, all written statements
the Proposed Rule Change
with respect to the proposed rule
FICC proposes to amend the rules of
change that are filed with the
its Government Securities Division
Commission, and all written
(‘‘GSD’’) and Mortgage-Backed
communications relating to the
Securities Division (‘‘MBSD’’) regarding
proposed rule change between the
membership requirements for non-U.S.
Commission and any person, other than applicants and members.
those that may be withheld from the
II. Self-Regulatory Organization’s
public in accordance with the
Statement of the Purpose of, and
provisions of 5 U.S.C. 552, will be
Statutory Basis for, the Proposed Rule
available for inspection and copying in
Change
the Commission’s Public Reference
Section, 450 Fifth Street, NW.,
In its filing with the Commission,
Washington, DC 20549. Copies of such
FICC included statements concerning
filing also will be available for
the purpose of and basis for the
inspection and copying at the principal
proposed rule change and discussed any
office of the CBOE. All comments
comments it received on the proposed
received will be posted without change; rule change. The text of these statements
the Commission does not edit personal
may be examined at the places specified
identifying information from
10 17 CFR 200.30–3(a)(12).
submissions. You should submit only
1 15 U.S.C. 78s(b)(1).
information that you wish to make
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11:51 Jan 14, 2005
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2911
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Frm 00075
Fmt 4703
Sfmt 4703
1. Annual Audited Financial Statements
Currently, GSD requires non-U.S.
members and applicants to submit
financial statements prepared in
accordance with U.S. generally accepted
accounting principles (‘‘U.S. GAAP’’)
‘‘whenever necessary and feasible.’’
MBSD requires non-U.S. members and
applicants to submit financial
statements prepared in accordance with
U.S. GAAP. Both divisions review such
financial statements as part of their
credit risk management program.
FICC proposes to amend these
requirements uniformly across both
divisions to enable non-U.S. members
and applicants to submit financial
statements that are prepared according
to any other generally accepted
accounting methodology (‘‘non-U.S.
GAAP’’).
In order to lessen the risk associated
with accepting financial statements
prepared in accordance with non-U.S.
GAAP, FICC would increase the existing
minimum financial requirements of
each applicant and member based on
which non-U.S. GAAP was used to
prepare the audited financial statement
in the following manner:
(a) For applicants and members whose
financial statements are prepared in
accordance with International Financial
Reporting Standards (‘‘IFRS’’), the
Companies Act of 1985 (‘‘U.K. GAAP’’), or
Canadian GAAP, the minimum financial
requirements would be one and one-half
times the applicable requirements.
(b) For applicants and members whose
financial statements are prepared in
accordance with a European Union country
GAAP (‘‘EU GAAP’’) other than U.K. GAAP,
the minimum financial requirements would
be five times the applicable requirements.
(c) For applicants and members whose
financial statements are prepared in
accordance with any other type of GAAP, the
minimum financial requirements would be
seven times the applicable requirements.3
2 The Commission has modified the text of the
summaries prepared by FICC.
3 In order to determine the appropriate premiums,
FICC’s risk management staff compiled all the U.S.
GAAP and non-U.S. GAAP equity capital figures of
financial institutions that filed SEC Form 20–F or
40–F for their 2002 and/or 2003 fiscal year ends to
identify the largest absolute differences between
U.S. GAAP and non-U.S. GAAPs. The staff found
that approximately 50% was the largest difference
when the U.S. GAAP figures were compared to
IFRS, U.K. GAAP, and Canadian GAAP. The largest
E:\FR\FM\18JAN1.SGM
Continued
18JAN1
]]>Agencies
[Federal Register Volume 70, Number 11 (Tuesday, January 18, 2005)]
[Notices]
[Pages 2910-2911]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-150]
[[Page 2910]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51007; File No. SR-CBOE-2005-03]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Chicago Board Options
Exchange, Inc. Relating to Allocations of Securities
January 10, 2005.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on
January 7, 2005, 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, II,
and III below, which Items have been prepared by the CBOE. The Exchange
has filed this proposed rule change pursuant to Section 19(b)(3)(A) of
the Act \3\ and Rule 19b-4(f)(1) thereunder,\4\ which renders the
proposal effective upon filing with the Commission. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to adopt an Interpretation to CBOE Rule 8.95
relating to temporary allocations of securities. The text of the
proposed rule change is available at the CBOE's Office of the Secretary
and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange 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 Exchange has prepared summaries, set forth in
sections (A), (B), and (C) below, of the most significant parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
CBOE Rule 8.95 governs the allocation of securities on the Exchange
and generally provides a framework by which the Allocation or Special
Product Assignment Committee determines whether to allocate a security
to a trading crowd or a Designated Primary Market-Maker (``DPM'').
Paragraph (b) gives these Committees the ability to consider any
factors they believe to be relevant in making such determinations. The
purpose of this rule filing is to adopt Interpretations and Policies
.05 (``I&P .05'') to CBOE Rule 8.95 to clarify that the Exchange has
the authority to grant a temporary allocation.
In this regard, the Exchange anticipates listing on the Hybrid
Trading System (``Hybrid'') new option classes on ETFs and possibly
indexes in the very near future. Currently, index options and options
on ETFs (``index-based products'') may only trade on Hybrid if they
have an assigned DPM, which precludes the trading of an index-based
product on Hybrid using an LMM system or a trading crowd with only
Market-Makers. In December, the Exchange filed SR-CBOE-2004-87, which
would allow it to trade these index-based products without a DPM. Upon
approval of that rule filing, the Exchange would like the ability to
reconsider changing the trading platform \5\ with respect to these
index-based products in order to determine if the product should trade
in a non-DPM environment.
---------------------------------------------------------------------------
\5\ The term ``trading platform,'' for purposes of this rule
filing, refers to the system by which a security trades. A security
may trade using a DPM system, an LMM system, or upon approval of SR-
CBOE-2004-87, with a Market-Maker system without a DPM or LMM.
---------------------------------------------------------------------------
Accordingly, proposed I&P .05 provides the ability to grant initial
allocations on a temporary basis and at any point within one year to
reallocate the security such that it trades on a different trading
platform (e.g., from a DPM to a non-DPM trading crowd or vice versa).
The proposed I&P provides that the Special Product Assignment or
Allocation Committee may make temporary allocations of securities
either to a DPM or a non-DPM trading crowd by explicitly indicating to
such DPM or non-DPM trading crowd at the time of allocation that the
allocation is temporary. The Committee that made the temporary
allocation may, at any time during the first twelve months following
the granting of the temporary allocation, determine it is in the best
interest of the Exchange to reallocate the security such that: (i) A
security initially allocated to a DPM is reallocated to a non-DPM
trading crowd; or (ii) a security initially allocated to a non-DPM
trading crowd is reallocated to a DPM. While proposed I&P .05
establishes the right to make temporary allocations, nothing in this
proposal eliminates the ability of the appropriate committee to take
action in accordance with existing paragraphs (c) and (d) of CBOE Rule
8.95.
2. Statutory Basis
CBOE believes the proposed rule change is consistent with the Act
and the rules and regulations under the Act applicable to a national
securities exchange and, in particular, the requirements of Section
6(b) of the Act.\6\ Specifically, the Exchange believes the proposed
rule change is consistent with the Section 6(b)(5) of the Act,\7\ which
requires, among other things, that the rules of an exchange be designed
to promote just and equitable principles of trade, to prevent
fraudulent and manipulative acts and, in general, to protect investors
and the public interest.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78(f)(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
CBOE does not believe that the proposed rule change will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange neither solicited nor received written comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change is immediately effective
pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(1)
thereunder,\9\ because it constitutes a stated policy, practice, or
interpretation with respect to the meaning, administration, or
enforcement of an existing rule. At any time within 60 days of the
filing of such proposed rule change, the Commission may summarily
abrogate such rule change if it appears to the Commission that such
action is necessary or
[[Page 2911]]
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------
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-2005-03 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-2005-03. 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-2005-03 and should be submitted on or before February 8, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-150 Filed 1-14-05; 8:45 am]
BILLING CODE 8010-01-P
