Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Increasing the Class Quoting Limit in Options on DIAMONDS®, 41803-41804 [E5-3860]

Download as PDF Federal Register / Vol. 70, No. 138 / Wednesday, July 20, 2005 / Notices The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above listed company. Therefore, it is ordered, pursuant to section 12(k) of the Securities Exchange Act of 1934, that trading in the above listed company is suspended for the period from 9:30 a.m., e.d.t., July 15, 2005, through 11:59 p.m., e.d.t., on July 28, 2005. By the Commission. J. Lynn Taylor, Assistant Secretary. [FR Doc. 05–14306 Filed 7–26–05; 4:26 pm] BILLING CODE 8010–01–M SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52028; File No. SR–CBOE– 2005–49] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Increasing the Class Quoting Limit in Options on DIAMONDS July 13, 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 June 22, 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 CBOE has designated this proposal as one constituting a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule under Section 19(b)(3)(A)(i) 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 CBOE proposes to increase the class quoting limit in options on DIAMONDS (‘‘DIA’’). The text of the U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(i). 4 17 CFR 240.19b–4(f)(1). VerDate jul<14>2003 14:24 Jul 19, 2005 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 aspects of such statements. anticipates will increase as DIA options are traded on the Hybrid Trading System. Increasing the CQL in DIA options will enable the Exchange to enhance the liquidity offered, thereby offering deeper and more liquid markets. The Exchange represents that it will comply with all of the requirements of CBOE Rule 8.3A in increasing the CQL in DIA options and, if it determines subsequently to reduce such CQL, in reducing the CQL in such options.7 Changes to the CQL will be announced to the membership via Information Circular. 2. Statutory Basis proposed rule change is available on the Exchange’s Internet Web site (http:// www.cboe.com), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose CBOE Rule 8.3A, Maximum Number of Market Participants Quoting Electronically per Product, establishes class quoting limits (‘‘CQLs’’) for each class traded on the Hybrid Trading System.5 A CQL is the maximum number of quoters that may quote electronically in a given product and the current levels are established from 25– 40, depending on the trading activity of the particular product. CBOE Rule 8.3A.01(c) provides a procedure by which the President of the Exchange may increase the CQL for a particular product. In this regard, the President of the Exchange may increase the CQL in exceptional circumstances, which are defined in the rule as ‘‘substantial trading volume, whether actual or expected.’’ 6 The effect of an increase in the CQL is procompetitive in that it increases the number of market participants that may quote electronically in a product. The purpose of this filing is to increase the CQL for options on DIA, which CBOE added to its Hybrid Trading System effective as of June 23, 2005. Specifically, the Exchange proposes to increase the CQL in DIA options by 5, from 25 to 30. DIA options are actively traded Exchange-Traded Funds on the Exchange, and there is substantial trading volume in them, which CBOE 5 See CBOE Rule 8.3A.01. actions taken by the President of the Exchange pursuant to this paragraph will be submitted to the SEC in a rule filing pursuant to Section 19(b)(3)(A) of the Exchange Act.’’ CBOE Rule 8.3A.01(c). 6 ‘‘Any 1 15 Jkt 205001 41803 PO 00000 Frm 00125 Fmt 4703 Sfmt 4703 The CBOE believes that 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.8 Specifically, the Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b)(5),9 which require the rules of an exchange to 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 The CBOE does not believe that the proposed rule change will 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 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 will take effect upon filing with the Commission pursuant to Section 7 The Exchange has represented that it will follow the procedures outlined in CBOE Rule 8.3A.01(a) for assigning a new CQL, based on revised trading volume statistics, at the end of the calendar quarter, and that if the new CQL is lower than the increased CQL assigned as a result of this proposed rule change, the procedures outlined in CBOE Rule 8.3A.01(a) will be followed. Telephone conversation between Patrick Sexton, Assistant General Counsel, CBOE and Edward Cho, Attorney, Division of Market Regulation, Commission (July 6, 2005). 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). E:\FR\FM\20JYN1.SGM 20JYN1 41804 Federal Register / Vol. 70, No. 138 / Wednesday, July 20, 2005 / Notices 19(b)(3)(A)(i) of the Act 10 and Rule 19b– 4(f)(1) thereunder,11 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 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 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2005–49 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE, Washington, DC 20549–9303. All submissions should refer to File Number SR–CBOE–2005–49. 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 (http://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 Room. Copies of such filing also will be available for inspection and copying at the principal office of the CBOE. All 10 15 11 17 U.S.C. 78s(b)(3)(A)(i). CFR 240.19b–4(f)(1). VerDate jul<14>2003 14:24 Jul 19, 2005 Jkt 205001 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–2005–49 and should be submitted on or before August 10, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.12 J. Lynn Taylor, Assistant Secretary. [FR Doc. E5–3860 Filed 7–19–05; 8:45 am] BILLING CODE 8010–01–P 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 extend the pilot periods contained in paragraphs .03 and .05 of the Supplemental Material to ISE Rule 723. Below is the text of the proposed rule change, as amended. Proposed new language is italicized; proposed deletions are in [brackets]. * * * * * Rule 723. Price Improvement Mechanism for Crossing Transactions (a) through (d) no change. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52027; File No. SR–ISE– 2005–30] Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to a One-Year Pilot Extension for the Price Improvement Mechanism July 13, 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 July 8, 2005, the International Securities Exchange, Inc. (the ‘‘Exchange’’ or the ‘‘ISE’’) 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 the ISE. On July 13, 2005, the ISE submitted Amendment No. 1 to the proposed rule change.3 The Exchange has designated the proposed rule change as ‘‘non-controversial’’ under Section 19(b)(3)(A) of the Act 4 and Rule 19b–4(f)(6) thereunder,5 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 In Amendment No. 1, the Exchange made corrections to the proposal’s rule text. The effective date of the original proposed rule change is July 8, 2005, and the effective date of Amendment No. 1 is July 13, 2005. For purposes of calculating the 60day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of the Act, the Commission considers the period to commence on July 13, 2005, the date on which the ISE filed Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C). 4 15 U.S.C. 78s(b)(3)(A). 5 17 CFR 240.19b–4(f)(6). PO 00000 12 17 1 15 Frm 00126 Fmt 4703 Sfmt 4703 Supplementary Material to Rule 723 .01 through .02 no change. .03 Initially, and for at least a Pilot Period expiring on July 18, [2005] 2006, there will be no minimum size requirements for orders to be eligible for the Price Improvement Mechanism. During the Pilot Period, the Exchange will submit certain data, periodically as required by the Commission, to provide supporting evidence that, among other things, there is meaningful competition for all size orders within the Price Improvement Mechanism, that there is significant price improvement for all orders executed through the Price Improvement Mechanism, and there is an active and liquid market functioning on the Exchange outside of the Price Improvement Mechanism. Any data which is submitted to the Commission will be provided on a confidential basis. .04 no change. .05 Paragraphs (c)(5), (d)(5) and (d)(6) will be effective for a Pilot Period expiring on July 18, [2005] 2006. During the Pilot Period, the Exchange will submit certain data relating to the frequency with which the exposure period is terminated by unrelated orders. Any data which is submitted to the Commission will be provided on a confidential basis. * * * * * 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 ISE 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 E:\FR\FM\20JYN1.SGM 20JYN1

Agencies

[Federal Register Volume 70, Number 138 (Wednesday, July 20, 2005)]
[Notices]
[Pages 41803-41804]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-3860]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52028; File No. SR-CBOE-2005-49]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Increasing the Class Quoting Limit in Options on 
DIAMONDS[supreg]

July 13, 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 June 22, 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 CBOE has designated this proposal as one constituting a stated 
policy, practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule under Section 
19(b)(3)(A)(i) 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)(i).
    \4\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The CBOE proposes to increase the class quoting limit in options on 
DIAMONDS[supreg] (``DIA''). The text of the proposed rule change is 
available on the Exchange's Internet Web site (http://www.cboe.com), at 
the Exchange'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 aspects 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 8.3A, Maximum Number of Market Participants Quoting 
Electronically per Product, establishes class quoting limits (``CQLs'') 
for each class traded on the Hybrid Trading System.\5\ A CQL is the 
maximum number of quoters that may quote electronically in a given 
product and the current levels are established from 25-40, depending on 
the trading activity of the particular product.
---------------------------------------------------------------------------

    \5\ See CBOE Rule 8.3A.01.
---------------------------------------------------------------------------

    CBOE Rule 8.3A.01(c) provides a procedure by which the President of 
the Exchange may increase the CQL for a particular product. In this 
regard, the President of the Exchange may increase the CQL in 
exceptional circumstances, which are defined in the rule as 
``substantial trading volume, whether actual or expected.'' \6\ The 
effect of an increase in the CQL is procompetitive in that it increases 
the number of market participants that may quote electronically in a 
product. The purpose of this filing is to increase the CQL for options 
on DIA, which CBOE added to its Hybrid Trading System effective as of 
June 23, 2005. Specifically, the Exchange proposes to increase the CQL 
in DIA options by 5, from 25 to 30.
---------------------------------------------------------------------------

    \6\ ``Any actions taken by the President of the Exchange 
pursuant to this paragraph will be submitted to the SEC in a rule 
filing pursuant to Section 19(b)(3)(A) of the Exchange Act.'' CBOE 
Rule 8.3A.01(c).
---------------------------------------------------------------------------

    DIA options are actively traded Exchange-Traded Funds on the 
Exchange, and there is substantial trading volume in them, which CBOE 
anticipates will increase as DIA options are traded on the Hybrid 
Trading System. Increasing the CQL in DIA options will enable the 
Exchange to enhance the liquidity offered, thereby offering deeper and 
more liquid markets. The Exchange represents that it will comply with 
all of the requirements of CBOE Rule 8.3A in increasing the CQL in DIA 
options and, if it determines subsequently to reduce such CQL, in 
reducing the CQL in such options.\7\ Changes to the CQL will be 
announced to the membership via Information Circular.
---------------------------------------------------------------------------

    \7\ The Exchange has represented that it will follow the 
procedures outlined in CBOE Rule 8.3A.01(a) for assigning a new CQL, 
based on revised trading volume statistics, at the end of the 
calendar quarter, and that if the new CQL is lower than the 
increased CQL assigned as a result of this proposed rule change, the 
procedures outlined in CBOE Rule 8.3A.01(a) will be followed. 
Telephone conversation between Patrick Sexton, Assistant General 
Counsel, CBOE and Edward Cho, Attorney, Division of Market 
Regulation, Commission (July 6, 2005).
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2. Statutory Basis
    The CBOE believes that 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.\8\ Specifically, the Exchange believes that 
the proposed rule change is consistent with the provisions of Section 
6(b)(5),\9\ which require the rules of an exchange to 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.
---------------------------------------------------------------------------

    \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

    The CBOE does not believe that the proposed rule change will 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

    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 will take effect upon filing 
with the Commission pursuant to Section

[[Page 41804]]

19(b)(3)(A)(i) of the Act \10\ and Rule 19b-4(f)(1) thereunder,\11\ 
because it constitutes a stated policy, practice, or interpretation 
with respect to the meaning, administration, or enforcement of an 
existing rule.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(i).
    \11\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------

    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 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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2005-49 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE, Washington, DC 20549-9303.
    All submissions should refer to File Number SR-CBOE-2005-49. 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 (http://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 Room. 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-2005-49 and 
should be submitted on or before August 10, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E5-3860 Filed 7-19-05; 8:45 am]
BILLING CODE 8010-01-P