Self-Regulatory Organizations; Chicago Board Options Exchange, Inc.; Order Approving a Proposed Rule Change and Amendment No. 1 Thereto and Notice of Filing and Order Granting Accelerated Approval to Amendment No. 2 Thereto Regarding Designated Primary Market-Makers' Handling of Non-Public Customer Orders, 7981-7982 [E5-642]
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Federal Register / Vol. 70, No. 31 / Wednesday, February 16, 2005 / Notices
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
Room. Copies of such filing also will be
available for inspection and copying at
the principal office of the Exchange. 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–2004–63 and should
be submitted on or before March 9,
2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.8
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–635 Filed 2–15–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51173; File No. SR–CBOE–
2004–85]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Inc.; Order Approving a Proposed Rule
Change and Amendment No. 1 Thereto
and Notice of Filing and Order
Granting Accelerated Approval to
Amendment No. 2 Thereto Regarding
Designated Primary Market-Makers’
Handling of Non-Public Customer
Orders
February 9, 2005.
I. Introduction
On December 15, 2004, the Chicago
Board Options Exchange, Inc. (‘‘CBOE’’
or ‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’)1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend its rules regarding Designated
Primary Market-Makers’ handling of
non-public customer orders. On
December 21, 2004, the CBOE submitted
Amendment No. 1 to the proposed rule
change.3 The proposed rule change was
published for comment in the Federal
Register on December 29, 2004.4 The
8 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Amendment No. 1 made technical corrections to
the propose rule text of the proposed rule change.
4 See Securities Exchange Act Release No. 50909
(December 22, 2004), 69 FR 78072.
1 15
VerDate jul<14>2003
12:44 Feb 15, 2005
Jkt 205001
Commission received no comments on
the proposal.
On February 4, 2005, the CBOE
submitted Amendment No. 2 to the
proposed rule change.5 This order
approves the proposed rule change, as
amended by Amendment Nos. 1 and 2.
Simultaneously, the Commission is
providing notice of filing of Amendment
No. 2 and granting accelerated approval
of Amendment No. 2.
II. Description
The Exchange proposes to amend
CBOE Rule 8.85(b)(iii) to require each
Designated Primary Market-Maker
(‘‘DPM’’) to accord priority to both
public and non-public customer orders
which a DPM represents as agent over
its own principal transactions, unless
the customer who placed the order has
consented to not being accorded such
priority.6
III. Discussion
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange 7 and, in particular,
the requirements of Section 6(b) of the
Act 8 and the rules and regulations
thereunder. The Commission finds that
the proposed rule change is consistent
with Section 6(b)(5) of the Act,9 which
requires that the rules of an exchange be
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
Specifically, the Commission finds
that requiring DPMs to accord priority
to all orders, non-public as well as
public customer orders, that they hold
as agent in CBOE’s rules should ensure
that these orders are handled in
5 Amendment No. 2 deleted the language of
Interpretation and Policy .03 of CBOE Rule 8.85,
which defined ‘‘public customer’’ order for
purposes of CBOE Rule 8.85(b)(iii). Since the term
‘‘public customer’’ order will no longer be in CBOE
Rule 8.85(b)(iii), the interpretation is no longer
necessary.
6 On January 25, 2002, the Commission approved
a CBOE proposed rule change eliminating from
CBOE rules the obligation of DPMs to accord
priority to non-public customer orders. See
Securities Exchange Act Release No. 45341 (January
25, 2002), 67 FR 5016 (February 1, 2002). In this
filing, the Exchange proposes to revert back to the
original language.
7 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00060
Fmt 4703
Sfmt 4703
7981
compliance with federal securities laws
and agency law principles.
In Amendment No. 2, the CBOE
proposed to delete the language of
Interpretation and Policy .03 of CBOE
Rule 8.85, which defined the term
‘‘public customer’’ order for purposes of
CBOE Rule 8.85(b)(iii). Because the term
‘‘public customer’’ order will no longer
be in CBOE Rule 8.85(b)(iii), the
interpretation is no longer necessary.
The Commission notes that the
proposed text of CBOE Rule 8.85(b)(iii)
has been subject to notice and comment,
and that no comments have been
received. The Commission believes that
the deletion of the language of proposed
language of Interpretation and Policy .03
of CBOE Rule 8.85 will clarify CBOE
Rule 8.85 by removing a definition that
is no longer necessary and, therefore,
merits approval. Accordingly, the
Commission finds that there is good
cause, consistent with Section 6(b)(5) 10
and Section 19(b)(2) of the Act,11 to
approve Amendment No. 2 on an
accelerated basis prior to the 30th day
of the date of publication of notice of
filing thereof in the Federal Register.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether Amendment No. 2 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–2004–85 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–2004–85. 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
10 15
11 15
E:\FR\FM\16FEN1.SGM
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(2).
16FEN1
7982
Federal Register / Vol. 70, No. 31 / Wednesday, February 16, 2005 / Notices
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
Room. Copies of the 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–2004–85 and should
be submitted on or before March 9,
2005.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,12 that the
proposed rule change (File No. SR–
CBOE–2004–85), as amended by
Amendment No. 1, be, and hereby is,
approved, and that Amendment No. 2 to
the proposed rule change be, and hereby
is, approved on an accelerated basis.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–642 Filed 2–15–05; 8:45 am]
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The proposed rule change consists of
amendments to Appendix A to the
cross-margining agreement
(‘‘Agreement’’) between the Chicago
Mercantile Exchange (‘‘CME’’) and the
Government Securities Division
(‘‘GSD’’) of FICC which lists other crossmargining and loss sharing
arrangements to which the GSD and
CME are parties.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FICC 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. FICC has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of these statements.2
(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. 34–51178; File No. SR–FICC–
2005–03]
Self-Regulatory Organizations; Fixed
Income Clearing Corporation; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
Appendix A to Its Cross-Margining
Agreement With the Chicago
Mercantile Exchange To Update the
List of Other Cross-Margining
Agreement To Which Each Is a Party
February 9, 2005.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
January 21, 2005, the Fixed Income
Clearing Corporation (‘‘FICC’’) filed
with the Securities and Exchange
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
Commission (‘‘Commission’’) the
proposed rule change described in Items
I, II, and III below, which items have
been prepared primarily by FICC. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested parties.
FICC is currently participating in a
cross-margining arrangement with the
Chicago Mercantile Exchange (‘‘CME’’).
The Agreement governing the
arrangement contains Appendix A on
which the parties are required to list
other cross-margining or loss sharing
arrangements to which they are parties.
The Agreement provides that the parties
may amend Appendix A without prior
approval of the other party by giving
notice to the other party.
The CME recently notified FICC that
it has amended Appendix A to remove
two agreements it had with the Board of
Trade Clearing Corporation and to add
an agreement that it now has with the
New York Mercantile Exchange. This
rule change incorporates these changes
into the Agreement, which is a part of
the GSD’s rules.
The proposed rule change is
consistent with the requirements of
12 15
12:44 Feb 15, 2005
(B) Self-Regulatory Organization’s
Statement on Burden on Competition
FICC does not believe that the
proposed rule change will have an
impact or impose any burden on
competition.
(C) Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments relating to the
proposed rule change have been
solicited or received. FICC will notify
the Commission of any written
comments received by FICC.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective upon filing pursuant to Section
19(b)(3)(A)(iii) of the Act 4 and Rule
19b–4(f)(4) 5 thereunder because the
proposed rule does not significantly
affect the respective rights or obligations
of the clearing agency or persons using
the service and does not adversely affect
the safeguarding of securities or funds
in the custody or control of FICC or for
which it is responsible. At any time
within sixty days of the filing of such
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–FICC–2005–03 on the
subject line.
3 15
13 17
VerDate jul<14>2003
Section 17A of the Act 3 and the rules
and regulations thereunder applicable to
FICC because it facilitates the
establishment of linked or coordinated
facilities for clearance and settlement of
transactions in securities and in futures.
2 The
Commission has modified the text of the
summaries prepared by FICC.
Jkt 205001
PO 00000
Frm 00061
Fmt 4703
Sfmt 4703
U.S.C. 78q–1.
U.S.C. 78s(b)(3)(A)(iii).
5 17 CFR 240.19b–4(f)(4).
4 15
E:\FR\FM\16FEN1.SGM
16FEN1
]]>Agencies
[Federal Register Volume 70, Number 31 (Wednesday, February 16, 2005)]
[Notices]
[Pages 7981-7982]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-642]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51173; File No. SR-CBOE-2004-85]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Inc.; Order Approving a Proposed Rule Change and Amendment No. 1
Thereto and Notice of Filing and Order Granting Accelerated Approval to
Amendment No. 2 Thereto Regarding Designated Primary Market-Makers'
Handling of Non-Public Customer Orders
February 9, 2005.
I. Introduction
On December 15, 2004, the Chicago Board Options Exchange, Inc.
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'')\1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to amend its rules regarding
Designated Primary Market-Makers' handling of non-public customer
orders. On December 21, 2004, the CBOE submitted Amendment No. 1 to the
proposed rule change.\3\ The proposed rule change was published for
comment in the Federal Register on December 29, 2004.\4\ The Commission
received no comments on the proposal.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment No. 1 made technical corrections to the propose
rule text of the proposed rule change.
\4\ See Securities Exchange Act Release No. 50909 (December 22,
2004), 69 FR 78072.
---------------------------------------------------------------------------
On February 4, 2005, the CBOE submitted Amendment No. 2 to the
proposed rule change.\5\ This order approves the proposed rule change,
as amended by Amendment Nos. 1 and 2. Simultaneously, the Commission is
providing notice of filing of Amendment No. 2 and granting accelerated
approval of Amendment No. 2.
---------------------------------------------------------------------------
\5\ Amendment No. 2 deleted the language of Interpretation and
Policy .03 of CBOE Rule 8.85, which defined ``public customer''
order for purposes of CBOE Rule 8.85(b)(iii). Since the term
``public customer'' order will no longer be in CBOE Rule
8.85(b)(iii), the interpretation is no longer necessary.
---------------------------------------------------------------------------
II. Description
The Exchange proposes to amend CBOE Rule 8.85(b)(iii) to require
each Designated Primary Market-Maker (``DPM'') to accord priority to
both public and non-public customer orders which a DPM represents as
agent over its own principal transactions, unless the customer who
placed the order has consented to not being accorded such priority.\6\
---------------------------------------------------------------------------
\6\ On January 25, 2002, the Commission approved a CBOE proposed
rule change eliminating from CBOE rules the obligation of DPMs to
accord priority to non-public customer orders. See Securities
Exchange Act Release No. 45341 (January 25, 2002), 67 FR 5016
(February 1, 2002). In this filing, the Exchange proposes to revert
back to the original language.
---------------------------------------------------------------------------
III. Discussion
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange \7\
and, in particular, the requirements of Section 6(b) of the Act \8\ and
the rules and regulations thereunder. The Commission finds that the
proposed rule change is consistent with Section 6(b)(5) of the Act,\9\
which requires that the rules of an exchange be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest.
---------------------------------------------------------------------------
\7\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
Specifically, the Commission finds that requiring DPMs to accord
priority to all orders, non-public as well as public customer orders,
that they hold as agent in CBOE's rules should ensure that these orders
are handled in compliance with federal securities laws and agency law
principles.
In Amendment No. 2, the CBOE proposed to delete the language of
Interpretation and Policy .03 of CBOE Rule 8.85, which defined the term
``public customer'' order for purposes of CBOE Rule 8.85(b)(iii).
Because the term ``public customer'' order will no longer be in CBOE
Rule 8.85(b)(iii), the interpretation is no longer necessary. The
Commission notes that the proposed text of CBOE Rule 8.85(b)(iii) has
been subject to notice and comment, and that no comments have been
received. The Commission believes that the deletion of the language of
proposed language of Interpretation and Policy .03 of CBOE Rule 8.85
will clarify CBOE Rule 8.85 by removing a definition that is no longer
necessary and, therefore, merits approval. Accordingly, the Commission
finds that there is good cause, consistent with Section 6(b)(5) \10\
and Section 19(b)(2) of the Act,\11\ to approve Amendment No. 2 on an
accelerated basis prior to the 30th day of the date of publication of
notice of filing thereof in the Federal Register.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b)(5).
\11\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether Amendment No. 2
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-2004-85 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-2004-85. 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
[[Page 7982]]
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 Room. Copies of the 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-2004-85 and should be submitted on or before March 9, 2005.
V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\12\ that the proposed rule change (File No. SR-CBOE-2004-85), as
amended by Amendment No. 1, be, and hereby is, approved, and that
Amendment No. 2 to the proposed rule change be, and hereby is, approved
on an accelerated basis.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------
\13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-642 Filed 2-15-05; 8:45 am]
BILLING CODE 8010-01-P
