Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change Relating to an Extension of the Linkage Fee Pilot Program, 43474-43475 [E5-3985]

Download as PDF 43474 Federal Register / Vol. 70, No. 143 / Wednesday, July 27, 2005 / Notices 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 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 self-regulatory organization 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2005–57 on the subject line. 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, 100 F Street, NE., 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–2005–57 and should be submitted by August 17, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.6 Jonathan G. Katz, Secretary. [FR Doc. E5–3983 Filed 7–26–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52073; File No. SR–CBOE– 2005–54] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change Relating to an Extension of the Linkage Fee Pilot Program July 20, 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 12, Paper Comments 2005, the Chicago Board Options • Send paper comments in triplicate Exchange, Incorporated (‘‘CBOE’’ or the to Jonathan G. Katz, Secretary, ‘‘Exchange’’) filed with the Securities Securities and Exchange Commission, and Exchange Commission 100 F Street, NE., Washington, DC (‘‘Commission’’) the proposed rule 20549–9303. change as described in Items I and II All submissions should refer to File below, which Items have been prepared Number SR–CBOE–2005–57. This file by the CBOE. The Commission is number should be included on the publishing this notice to solicit subject line if e-mail is used. To help the comments on the proposed rule change Commission process and review your from interested parties and is approving comments more efficiently, please use only one method. The Commission will 6 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). post all comments on the Commission’s 2 17 CFR 240.19b–4. Internet Web site (http://www.sec.gov/ VerDate jul<14>2003 20:48 Jul 26, 2005 Jkt 205001 PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 the proposed rule change on an accelerated basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its Fees Schedule to extend until July 31, 2006 the current pilot program applicable to options intermarket linkage (‘‘Linkage’’) fees. The text of the proposed rule change is available at the Office of the Secretary, CBOE and at the Commission. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CBOE included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III 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, Proposed Rule Change 1. Purpose The Exchange’s fees for Principal (‘‘P’’) and Principal Acting as Agent (‘‘P/A’’) orders 3 are operating under a pilot program scheduled to expire on July 31, 2005.4 The Exchange proposes to amend its Fees Schedule to extend the pilot program until July 31, 2006.5 Pursuant to the current pilot program, the Exchange assesses its members the 3 Under the Plan for the Purpose of Creating and Operating an Options Intermarket Linkage (‘‘Plan’’) and Exchange Rule 6.80(12), which tracks the language of the Plan, a ‘‘Linkage Order’’ means an Immediate or Cancel Order routed through the Linkage as permitted under the Plan. There are three types of Linkage Orders: (i) ‘‘P/A Order,’’ which is an order for the principal account of a specialist (or equivalent entity an another Participant Exchange that is authorized to represent Public Customer orders), reflecting the terms of a related unexecuted Public Customer order for which the specialist is acting as agent; (ii) ‘‘P Order,’’ which is an order for the principal account of an Eligible Market Maker and is not a P/A Order; and (iii) ‘‘Satisfaction Order,’’ which is an order sent through the Linkage to notify a member of another Participant Exchange of a Trade-Through and to seek satisfaction of the liability arising from that Trade-Through. 4 See Securities Exchange Act Release No. 50048 (July 20, 2004), 69 FR 45102 (July 28, 2004) (SR– CBOE–2004–40). 5 The Exchange also proposes the correction of a typographical error in the text of Footnote 8 of the CBOE Fees Schedule. E:\FR\FM\27JYN1.SGM 27JYN1 Federal Register / Vol. 70, No. 143 / Wednesday, July 27, 2005 / Notices following Linkage order fees: (i) $.24 per contract transaction fee for equity, QQQQ and SPDR options, (ii) $.35 or $.20 per contract, depending on the premium, for OEF options and $.45 or $.25 per contract, depending on the premium, for other index options, (iii) $.04 per contract floor brokerage fee, if any portion of a Linkage order is manually handled, (iv) $.30 per contract RAES access fee, if a linkage order is executed in whole or in part on RAES, and (v) $.10 license fee on transactions in MNX and NDX options.6 Satisfaction Orders are not assessed Exchange fees. The Exchange believes that extension of the Linkage fee pilot program until July 31, 2006 will give the Exchange and the Commission further opportunity to evaluate the appropriateness of Linkage fees. 2. Statutory Basis. The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act 7 in general, and furthers the objectives of Section 6(b)(4) 8 of the Act in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among CBOE members and other persons using its facilities. B. Self-Regulatory Organization’s Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received from Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. 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 6 See CBOE Fees Schedule, Footnote 15. U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(4). 7 15 VerDate jul<14>2003 20:48 Jul 26, 2005 Jkt 205001 43475 fees and other charges among its members and other persons using its facilities. The Commission believes that Paper Comments the extension of the Linkage fee pilot • Send paper comments in triplicate until July 31, 2006 will give the to Jonathan G. Katz, Secretary, Commission further opportunity to Securities and Exchange Commission, evaluate whether such fees are 100 F Street, NE., Washington, DC appropriate. 20549–9303. The Commission finds good cause, All submissions should refer to File pursuant to Section 19(b)(2) of the Number SR–CBOE–2005–54. This file Act,12 for approving the proposed rule number should be included on the change prior to the thirtieth day after subject line if e-mail is used. To help the the date of publication of the notice of Commission process and review your the filing thereof in the Federal comments more efficiently, please use Register. The Commission believes that only one method. The Commission will granting accelerating approval will post all comments on the Commission’s preserve the Exchange’s existing pilot Internet Web site (http://www.sec.gov/ program for Linkage fees without rules/sro.shtml). Copies of the interruption as the CBOE and the submission, all subsequent Commission further consider the amendments, all written statements appropriateness of Linkage fees. with respect to the proposed rule V. Conclusion change that are filed with the Commission, and all written It is therefore ordered, pursuant to communications relating to the Section 19(b)(2) of the Act 13 that the proposed rule change between the proposed rule change (SR–CBOE–2005– Commission and any person, other than 54) is hereby approved on an those that may be withheld from the accelerated basis for a pilot period to public in accordance with the expire on July 31, 2006. provisions of 5 U.S.C. 552, will be For the Commission, by the Division of available for inspection and copying in Market Regulation, pursuant to delegated the Commission’s Public Reference authority.14 Section, 100 F Street, NE., Washington, Jonathan G. Katz, DC 20549. Copies of such filing also will Secretary. be available for inspection and copying [FR Doc. E5–3985 Filed 7–26–05; 8:45 am] at the principal office of the CBOE. All BILLING CODE 8010–01–P comments received will be posted without change; the Commission does not edit personal identifying SECURITIES AND EXCHANGE information from submissions. You COMMISSION should submit only information that you wish to make available publicly. All [Release No. 34–52062; File No. SR–CHX– 2004–03] submissions should refer to File Number SR–CBOE–2005–54 and should Self-Regulatory Organizations; be submitted on or before August 17, Chicago Stock Exchange, Inc.; Order 2005. Approving Proposed Rule Change IV. Commission’s Findings and Order Relating to Standards for Manual Granting Accelerated Approval of Execution of Market and Marketable Proposed Rule Change Limit Orders After careful consideration, the July 19, 2005. Commission finds that the proposed On February 11, 2004, the Chicago rule change is consistent with the Stock Exchange, Incorporated (‘‘CHX’’), requirements of the Act and the rules filed with the Securities and Exchange and regulations thereunder, applicable Commission (‘‘Commission’’), pursuant to a national securities exchange,9 and, to Section 19(b)(1) of the Securities in particular, with the requirements of Exchange Act of 1934 (‘‘Act’’),1 and Section 6(b) of the Act 10 and the rules Rule 19b–4 thereunder,2 a proposed rule and regulations thereunder. The change to amend Article XX, Rule 37 to Commission finds that the proposed eliminate a specific requirement that a rule change is consistent with Section specialist execute eligible orders at the 6(b)(4) of the Act,11 which requires that the rules of the Exchange provide for the price and size associated with the national best bid or offer (‘‘NBBO’’) and equitable allocation of reasonable dues, Number SR–CBOE–2005–54 on the subject line. 9 In approving this rule, the Commission notes that it has considered its impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(4). PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 12 15 U.S.C. 78s(b)(2). 13 Id. 14 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\27JYN1.SGM 27JYN1

Agencies

[Federal Register Volume 70, Number 143 (Wednesday, July 27, 2005)]
[Notices]
[Pages 43474-43475]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-3985]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52073; File No. SR-CBOE-2005-54]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Order Granting Accelerated Approval 
of Proposed Rule Change Relating to an Extension of the Linkage Fee 
Pilot Program

July 20, 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 12, 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 and II 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 parties and is approving the 
proposed rule change on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its Fees Schedule to extend until 
July 31, 2006 the current pilot program applicable to options 
intermarket linkage (``Linkage'') fees. The text of the proposed rule 
change is available at the Office of the Secretary, CBOE and at the 
Commission.

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

    In its filing with the Commission, CBOE included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item III 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, Proposed Rule Change

1. Purpose
    The Exchange's fees for Principal (``P'') and Principal Acting as 
Agent (``P/A'') orders \3\ are operating under a pilot program 
scheduled to expire on July 31, 2005.\4\ The Exchange proposes to amend 
its Fees Schedule to extend the pilot program until July 31, 2006.\5\
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    \3\ Under the Plan for the Purpose of Creating and Operating an 
Options Intermarket Linkage (``Plan'') and Exchange Rule 6.80(12), 
which tracks the language of the Plan, a ``Linkage Order'' means an 
Immediate or Cancel Order routed through the Linkage as permitted 
under the Plan. There are three types of Linkage Orders:
    (i) ``P/A Order,'' which is an order for the principal account 
of a specialist (or equivalent entity an another Participant 
Exchange that is authorized to represent Public Customer orders), 
reflecting the terms of a related unexecuted Public Customer order 
for which the specialist is acting as agent;
    (ii) ``P Order,'' which is an order for the principal account of 
an Eligible Market Maker and is not a P/A Order; and
    (iii) ``Satisfaction Order,'' which is an order sent through the 
Linkage to notify a member of another Participant Exchange of a 
Trade-Through and to seek satisfaction of the liability arising from 
that Trade-Through.
    \4\ See Securities Exchange Act Release No. 50048 (July 20, 
2004), 69 FR 45102 (July 28, 2004) (SR-CBOE-2004-40).
    \5\ The Exchange also proposes the correction of a typographical 
error in the text of Footnote 8 of the CBOE Fees Schedule.
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    Pursuant to the current pilot program, the Exchange assesses its 
members the

[[Page 43475]]

following Linkage order fees: (i) $.24 per contract transaction fee for 
equity, QQQQ and SPDR options, (ii) $.35 or $.20 per contract, 
depending on the premium, for OEF options and $.45 or $.25 per 
contract, depending on the premium, for other index options, (iii) $.04 
per contract floor brokerage fee, if any portion of a Linkage order is 
manually handled, (iv) $.30 per contract RAES access fee, if a linkage 
order is executed in whole or in part on RAES, and (v) $.10 license fee 
on transactions in MNX and NDX options.\6\ Satisfaction Orders are not 
assessed Exchange fees.
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    \6\ See CBOE Fees Schedule, Footnote 15.
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    The Exchange believes that extension of the Linkage fee pilot 
program until July 31, 2006 will give the Exchange and the Commission 
further opportunity to evaluate the appropriateness of Linkage fees.
2. Statutory Basis.
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \7\ in general, and furthers the 
objectives of Section 6(b)(4) \8\ of the Act in particular, in that it 
is designed to provide for the equitable allocation of reasonable dues, 
fees, and other charges among CBOE members and other persons using its 
facilities.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
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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 that is not necessary or appropriate in 
furtherance of purposes of the Act.

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

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

III. 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-2005-54 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.
    All submissions should refer to File Number SR-CBOE-2005-54. 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 Section, 100 F Street, 
NE., 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-2005-54 and should be 
submitted on or before August 17, 2005.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    After careful consideration, 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,\9\ and, in particular, with the requirements of Section 6(b) 
of the Act \10\ and the rules and regulations thereunder. The 
Commission finds that the proposed rule change is consistent with 
Section 6(b)(4) of the Act,\11\ which requires that the rules of the 
Exchange provide for the equitable allocation of reasonable dues, fees 
and other charges among its members and other persons using its 
facilities. The Commission believes that the extension of the Linkage 
fee pilot until July 31, 2006 will give the Commission further 
opportunity to evaluate whether such fees are appropriate.
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    \9\ In approving this rule, the Commission notes that it has 
considered its impact on efficiency, competition and capital 
formation. 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
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    The Commission finds good cause, pursuant to Section 19(b)(2) of 
the Act,\12\ for approving the proposed rule change prior to the 
thirtieth day after the date of publication of the notice of the filing 
thereof in the Federal Register. The Commission believes that granting 
accelerating approval will preserve the Exchange's existing pilot 
program for Linkage fees without interruption as the CBOE and the 
Commission further consider the appropriateness of Linkage fees.
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    \12\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
\13\ that the proposed rule change (SR-CBOE-2005-54) is hereby approved 
on an accelerated basis for a pilot period to expire on July 31, 2006.
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    \13\ Id.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
Jonathan G. Katz,
Secretary.
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    \14\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E5-3985 Filed 7-26-05; 8:45 am]
BILLING CODE 8010-01-P