Self-Regulatory Organizations; Notice of Filing of a Proposed Rule Change by the Chicago Board Options Exchange, Incorporated Relating to the Hybrid Opening System, 17731-17732 [E5-1582]
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Federal Register / Vol. 70, No. 66 / Thursday, April 7, 2005 / Notices
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,9 that the
proposed rule change (SR–Amex–2005–
007), as amended, be, and it hereby is,
approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.10
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–1580 Filed 4–6–05; 8:45 am]
BILLING CODE 8010–01–P
[Release No. 34–51459; File No. SR–CBOE–
2005–27]
Self-Regulatory Organizations; Notice
of Filing of a Proposed Rule Change by
the Chicago Board Options Exchange,
Incorporated Relating to the Hybrid
Opening System
March 31, 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 March 24,
2005, 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. 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 proposed rule change would
amend the Hybrid Opening System
(‘‘HOSS’’) procedures and the rule
relating to the obligations of electronic
designated primary market makers (‘‘eDPMs’’). The text of the proposed rule
change is available on the CBOE’s Web
site (https://www.cboe.com), 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,
CBOE included statements concerning
the purpose of and basis for the
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
10 17
VerDate jul<14>2003
18:22 Apr 06, 2005
Jkt 205001
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
SECURITIES AND EXCHANGE
COMMISSION
9 15
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.
The Exchange is proposing to amend
its rules relating to HOSS procedures
and the rules relating to e-DPMs to
require all e-DPMs to submit opening
quotes during the HOSS opening
rotation for every series in each Hybrid
class to which any e-DPM is allocated.
Currently, CBOE rules only require
DPMs to submit opening quotes in
option classes listed and traded on the
Exchange. The Exchange believes that
requiring e-DPMs to submit opening
quotes along with DPMs would enhance
the opening process for Hybrid option
classes by providing greater liquidity
during opening rotations, which would
in turn lessen the possibility that a
Hybrid option class might be unable to
open.
To illustrate, under current CBOE
rules, only a DPM is required to submit
opening quotes in a series 3 and, if the
DPM’s quoted size at the open is below
the total size of the market orders on the
other side of the market and no other
quotes are on the open, there is a market
order imbalance and, under CBOE rules,
HOSS will not open that series.4 If all
e-DPMs are now required to add size to
the opening quote for each series in the
option classes allocated to e-DPMs, the
incidence of market order imbalances is
likely to decrease.
As such, HOSS rules 5 and the rules
relating to e-DPM and DPM obligations,
respectively,6 will be amended to
require both e-DPMs and DPMs to enter
opening quotes in accordance with
HOSS rules in 100% of the series of
each class allocated to that DPM or eDPM.7
Rule 6.2B(a).
Rule 6.2B(e)(iii).
5 Rule 6.2B.
6 DPM obligations are provided under Rule
8.85(a) and e-DPM obligations are provided under
Rule 8.93.
7 Under current CBOE rules, DPMs already are
required to submit opening quotes in all of its
allocated classes, but this rule filing proposes to
adopt rule language that will apply uniformly to
both DPMs and e-DPMs.
PO 00000
3 See
4 See
Frm 00088
Fmt 4703
Sfmt 4703
17731
2. Statutory Basis
By enhancing HOSS opening
procedures and making an e-DPM’s
HOSS obligations consistent with those
of a DPM’s, the Exchange believes that
this proposed rule change is consistent
with Section 6(b) of the Act,8 in general,
and further the objectives of Section
6(b)(5) 9 in particular, in that it should
promote just and equitable principles of
trade, serve to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and protect investors and the
public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
This proposed rule change does not
impose any burden on competition that
is 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
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
Within 35 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the CBOE consents, the
Commission will:
(A) By order approve such proposed
rule change, or
(B) Institute proceedings to determine
whether the proposed rule change
should be disapproved.
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–2005–27 on the
subject line.
8 15
9 15
E:\FR\FM\07APN1.SGM
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
07APN1
17732
Federal Register / Vol. 70, No. 66 / Thursday, April 7, 2005 / Notices
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–2005–27. 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–
2005–27 and should be submitted on or
before April 28, 2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.6
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–1582 Filed 4–6–05; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51463; File No. SR–CBOE–
2005–19]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Proposed Rule
Change and Amendment No. 1 Thereto
Relating to an Interpretation of
Paragraph (b) of Article Fifth of Its
Certificate of Incorporation and an
Amendment to Rule 3.16(b)
March 31, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
March 7, 2005, the Chicago Board
Options Exchange, Incorporated
(‘‘CBOE’’ or the ‘‘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
March 28, 2005, the Exchange submitted
Amendment No. 1 to the proposed rule
change.2 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 proposed rule change consists of
an interpretation of paragraph (b) of
Article Fifth of the Certificate of
Incorporation of the CBOE pertaining to
the right of the 1,402 Full Members of
the Board of Trade of the City of
Chicago, Inc. (‘‘CBOT’’) to become
members of CBOE without having to
purchase a CBOE membership
(paragraph (b) of Article Fifth of CBOE’s
Certificate of Incorporation is referred to
as ‘‘Article Fifth(b),’’ and the right of
CBOT Full Members to become
members of CBOE as described therein
is referred to as the ‘‘Exercise Right’’).
This interpretation of the Exercise Right
1 15
U.S.C. 78s(b)(1).
to a pending motion to reconsider the
Commission’s approval of SR–CBOE–2004–16,
which was submitted on March 7, 2005,
Amendment No. 1 removed certain language from
the text of CBOE Rule 3.16(b) that was included
with the original filing to reflect the stay of
effectiveness of the text added by SR–CBOE–2004–
16 pending a final Commission determination of the
motion to reconsider. Accordingly, Amendment No.
1 revised the proposed rule change to reflect the
text of CBOE Rule 3.16 as currently in effect,
without the language added to the Rule by SR–
CBOE–2004–16, and as it is proposed to be
modified by the current rule filing. Amendment No.
1 also adds Exhibit 3d to the filing, which consists
of an opinion letter received by CBOE from its
special Delaware counsel that pertains to the
proposed rule change.
BILLING CODE 8010–01–P
2 Due
6 17
CFR 200.30–3(a)(12).
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18:22 Apr 06, 2005
Jkt 205001
PO 00000
Frm 00089
Fmt 4703
Sfmt 4703
is embodied in an Agreement dated
August 7, 2001, (‘‘2001 Agreement’’)
between CBOE and the CBOT as
modified by a Letter Agreement among
CBOE, CBOT Holdings, Inc. (‘‘CBOT
Holdings’’) and CBOT dated October 7,
2004 (the ‘‘October 2004 Letter
Agreement’’), and it is reflected in a
related amendment to CBOE Rule 3.16.
The 2001 Agreement as modified by
the October 2004 Letter Agreement
represents the agreement of the parties
concerning the nature and scope of the
Exercise Right following the
consummation of a proposed
restructuring of CBOT and in light of the
expansion of the CBOT’s electronic
trading system. The 2001 Agreement as
modified incorporates CBOE’s
interpretation concerning the operation
of Article Fifth(b) in light of these
changed circumstances at CBOT. That
interpretation, together with a proposed
amendment to Rule 3.16, constitutes the
proposed rule change that is the subject
of this filing.
In a Letter Agreement among CBOE,
CBOT Holdings and CBOT dated
February 14, 2005 (the ‘‘February 2005
Letter Agreement’’), the parties
confirmed that the proposed
restructuring of the CBOT as described
in Amendment 13 to the registration
statement filed by CBOT Holdings and
CBOT on Form S–4 under the Securities
Act of 1933 as amended at that time,
which was the last substantive
amendment to the registration statement
before it was declared effective by the
Commission on that date, constitutes
the CBOT restructuring for purposes of
the 2001 Agreement and CBOE’s
interpretation of Article Fifth(b)
embodied therein. The 2001 Agreement
as modified and clarified by the October
2004 Letter Agreement and the February
2005 Letter Agreement is referred to
herein as the ‘‘2001 Agreement as
amended.’’ The text of the 2001
Agreement is attached as Exhibit 3a to
the CBOE’s Form 19b–4, the text of the
October 7, 2004 Letter Agreement is
attached as Exhibit 3b to the CBOE’s
Form 19b–4, the text of the February 14,
2005 Letter Agreement is attached as
Exhibit 3c to the CBOE’s Form 19b–4,
and the opinion letter of CBOE’s special
Delaware counsel is attached as Exhibit
3d to the CBOE’s Form 19b–4. The text
of the proposed rule change, including
the above-referenced Exhibits and
Amendment No. 1, is available on
CBOE’s Web site (https://www.cboe.org/
Legal/SubmittedSECFilings.aspx), at the
CBOE’s Office of the Secretary, and at
the Commission’s Public Reference
Room.
E:\FR\FM\07APN1.SGM
07APN1
]]>Agencies
[Federal Register Volume 70, Number 66 (Thursday, April 7, 2005)]
[Notices]
[Pages 17731-17732]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-1582]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51459; File No. SR-CBOE-2005-27]
Self-Regulatory Organizations; Notice of Filing of a Proposed
Rule Change by the Chicago Board Options Exchange, Incorporated
Relating to the Hybrid Opening System
March 31, 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 March 24, 2005, 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.
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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change would amend the Hybrid Opening System
(``HOSS'') procedures and the rule relating to the obligations of
electronic designated primary market makers (``e-DPMs''). The text of
the proposed rule change is available on the CBOE's Web site (https://
www.cboe.com), 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, 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
The Exchange is proposing to amend its rules relating to HOSS
procedures and the rules relating to e-DPMs to require all e-DPMs to
submit opening quotes during the HOSS opening rotation for every series
in each Hybrid class to which any e-DPM is allocated. Currently, CBOE
rules only require DPMs to submit opening quotes in option classes
listed and traded on the Exchange. The Exchange believes that requiring
e-DPMs to submit opening quotes along with DPMs would enhance the
opening process for Hybrid option classes by providing greater
liquidity during opening rotations, which would in turn lessen the
possibility that a Hybrid option class might be unable to open.
To illustrate, under current CBOE rules, only a DPM is required to
submit opening quotes in a series \3\ and, if the DPM's quoted size at
the open is below the total size of the market orders on the other side
of the market and no other quotes are on the open, there is a market
order imbalance and, under CBOE rules, HOSS will not open that
series.\4\ If all e-DPMs are now required to add size to the opening
quote for each series in the option classes allocated to e-DPMs, the
incidence of market order imbalances is likely to decrease.
---------------------------------------------------------------------------
\3\ See Rule 6.2B(a).
\4\ See Rule 6.2B(e)(iii).
---------------------------------------------------------------------------
As such, HOSS rules \5\ and the rules relating to e-DPM and DPM
obligations, respectively,\6\ will be amended to require both e-DPMs
and DPMs to enter opening quotes in accordance with HOSS rules in 100%
of the series of each class allocated to that DPM or e-DPM.\7\
---------------------------------------------------------------------------
\5\ Rule 6.2B.
\6\ DPM obligations are provided under Rule 8.85(a) and e-DPM
obligations are provided under Rule 8.93.
\7\ Under current CBOE rules, DPMs already are required to
submit opening quotes in all of its allocated classes, but this rule
filing proposes to adopt rule language that will apply uniformly to
both DPMs and e-DPMs.
---------------------------------------------------------------------------
2. Statutory Basis
By enhancing HOSS opening procedures and making an e-DPM's HOSS
obligations consistent with those of a DPM's, the Exchange believes
that this proposed rule change is consistent with Section 6(b) of the
Act,\8\ in general, and further the objectives of Section 6(b)(5) \9\
in particular, in that it should promote just and equitable principles
of trade, serve to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and protect
investors and the public interest.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
This proposed rule change does not impose any burden on competition
that is 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
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
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the CBOE consents, the Commission will:
(A) By order approve such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
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-2005-27 on the subject line.
[[Page 17732]]
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-2005-27. 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-2005-27 and should be submitted on or before April 28, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\6\
---------------------------------------------------------------------------
\6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-1582 Filed 4-6-05; 8:45 am]
BILLING CODE 8010-01-P
