Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Extend a Pilot Program Relating to Market-Maker Access to the Hybrid Automatic Execution System, 56943-56944 [05-19498]

Download as PDF Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Notices 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: For the Commission, by the Division of Market Regulation, pursuant to delegated authority.14 Jonathan G. Katz, Secretary. [FR Doc. 05–19495 Filed 9–28–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments [Release No. 34–52494; File No. SR–CBOE– 2005–70] • 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–Amex–2005–087 on the subject line. Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Extend a Pilot Program Relating to Market-Maker Access to the Hybrid Automatic Execution System Paper Comments September 22, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 • Send paper comments in triplicate (‘‘Act’’),1 and Rule 19b–4 thereunder,2 to Jonathan G. Katz, Secretary, notice is hereby given that on Securities and Exchange Commission, September 12, 2005, the Chicago Board 100 F Street, NE., Washington, DC Options Exchange, Incorporated 20549–9303. (‘‘CBOE’’ or ‘‘Exchange’’) filed with the All submissions should refer to File Securities and Exchange Commission Number SR–Amex–2005–087. This file (‘‘Commission’’) the proposed rule number should be included on the change as described in Items I, II, and subject line if e-mail is used. To help the III below, which Items have been prepared by the Exchange. The Commission process and review your Exchange has designated this proposal comments more efficiently, please use only one method. The Commission will as ‘‘non-controversial’’ pursuant to post all comments on the Commission’s Section 19(b)(3)(A) of the Act,3 and Rule 19b–4(f)(6) thereunder,4 which renders Internet Web site (https://www.sec.gov/ the proposed rule change effective upon rules/sro.shtml). Copies of the filing with the Commission.5 The submission, all subsequent Commission is publishing this notice to amendments, all written statements solicit comments on the proposed rule with respect to the proposed rule change from interested persons. change that are filed with the I. Self-Regulatory Organization’s Commission, and all written Statement of the Terms of Substance of communications relating to the the Proposed Rule Change proposed rule change between the Commission and any person, other than The Exchange proposes to extend the those that may be withheld from the pilot program in CBOE Rule 6.13 public in accordance with the relating to market-maker access to the provisions of 5 U.S.C. 552, will be Exchange’s automatic execution system until October 12, 2006. No other available for inspection and copying in changes are being made to the pilot the Commission’s Public Reference program. The text of the proposed rule Room. Copies of the filing also will be change is available on the Exchange’s available for inspection and copying at the principal office of the Exchange. All Web site (https://www.cboe.com), at the Exchange’s Office of the Secretary, and comments received will be posted without change; the Commission does 14 17 CFR 200.30–3(a)(12). not edit personal identifying 1 15 U.S.C. 78s(b)(1). information from submissions. You 2 17 CFR 240.19b–4. should submit only information that 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). you wish to make available publicly. All 5 The Exchange asked the Commission to waive submissions should refer to File the five business day pre-filing notice requirement. Number SR–Amex–2005–087 and See Rule 19b–4(f)(6)(iii), 17 CFR 240.19b–4(f)(6)(iii). should be submitted on or before The Commission is exercising its authority to waive October 20, 2005. the five business day pre-filing notice requirement and notes that the Exchange provided the Commission with four business days’ notice. VerDate Aug<31>2005 13:52 Sep 28, 2005 Jkt 205001 PO 00000 Frm 00058 Fmt 4703 Sfmt 4703 56943 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 In 2004, the Commission approved on a pilot basis, CBOE Rule 6.13(b)(i)(C)(iii) (‘‘Rule’’) relating to the frequency with which certain market participants could submit orders for execution through the Exchange’s Hybrid Trading System (‘‘Hybrid’’).6 CBOE Rule 6.13(b)(i)(C)(iii) currently provides in relevant part: (iii) 15-Second Limitation: With respect to orders eligible for submission pursuant to paragraph (b)(i)(C)(ii), members shall neither enter nor permit the entry of multiple orders on the same side of the market in an option class within any 15-second period for an account or accounts of the same beneficial owner. The appropriate FPC may shorten the duration of this 15second period by providing notice to the membership via a Regulatory Circular that is issued at least one day prior to implementation. The effectiveness of this rule shall terminate on October 12, 2005. Upon approval of the Rule, the Exchange began allowing orders from options exchange market-makers to be eligible for automatic execution subject to the 15-second limitation described above.7 As the pilot period expires on 6 See Securities Exchange Act Release No. 50005 (July 12, 2004), 69 FR 43032 (July 19, 2004) (SR– CBOE–2004–33). The pilot program has been extended once. See Securities Exchange Act Release No. 51030 (January 12, 2005), 70 FR 3404 (January 24, 2005) (SR–CBOE–2004–91) (extension of the pilot program until October 12, 2005). 7 CBOE Rule 6.13(b)(i)(C)(ii) governs the submission of orders from market-makers (paragraph (C)(ii)(A)) and stock exchange specialists (paragraph (C)(ii)(B)). It should be noted that, pursuant CBOE Rule 6.13(b)(i)(C)(iii), the floor procedures committees (FPCs) determined to shorten to 5 seconds (from 15 seconds) the period E:\FR\FM\29SEN1.SGM Continued 29SEN1 56944 Federal Register / Vol. 70, No. 188 / Thursday, September 29, 2005 / Notices October 12, 2005, the Exchange proposes to extend the pilot program. Given the success of the pilot program in attracting market-maker volume to the Exchange, the Exchange proposes to extend the pilot program’s duration an additional year, until October 12, 2006. 2. Statutory Basis The Exchange believes that the extension of the pilot program will allow the Exchange to continue to provide auto-ex access to all marketmakers. Accordingly, the Exchange believes the proposed rule change is consistent with the Act 8 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.9 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5)10 requirements that the rules of an exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts and, in general, to protect investors and the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange neither solicited nor received comments on the proposal. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) required between entry of multiple market-maker orders (including non-CBOE market-maker orders) on the same side of the market in an option class for an account or accounts of the same beneficial owner using Hybrid. This change went into effect on July 18, 2005 and was announced to the membership via Regulatory Circular RG05–61. 8 15 U.S.C. 78a et seq. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 13:52 Sep 28, 2005 Jkt 205001 of the Act 11 and Rule 19b–4(f)(6) thereunder.12 At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate the rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2005–70 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–2005–70. 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 Room. Copies of the 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 11 15 12 17 PO 00000 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). Frm 00059 Fmt 4703 Sfmt 4703 should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CBOE–2005–70 and should be submitted on or before October 20, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.13 Jonathan G. Katz, Secretary. [FR Doc. 05–19498 Filed 9–28–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52496, File No. SR–MSRB– 2005–12] Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Order Approving Proposed Rule Change Concerning Solicitation and Coordination of Payments to Political Parties and Question and Answer Guidance on Supervisory Procedures Related to Rule G–37(d) on Indirect Violations September 22, 2005. On June 27, 2005, the Municipal Securities Rulemaking Board (‘‘MSRB’’ or ‘‘Board’’), filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘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 consisting of an amendment to Rule G– 37(c), concerning solicitation and coordination of payments to political parties, and Q&A guidance on supervisory procedures related to Rule G–37(d), on indirect violations. The proposed rule change was published for comment in the Federal Register on August 16, 2005.3 The Commission received four comment letters regarding the proposal.4 On September 16, 2005, 13 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 52235 (August 10, 2005) 70 FR 48214 (August 16, 2005) (the ‘‘Commission’s Notice’’). 4 See letter to Jonathan G. Katz, Secretary, Commission, from Terry L. Atkinson, Managing Director, UBS Financial Services Inc. (‘‘UBS’’), dated September 1, 2005 (‘‘UBS’ Letter’’); letter to Jonathan G. Katz, Secretary, Commission, from Leslie M. Norwood, Vice President and Assistant General Counsel, The Bond Market Association (‘‘BMA’’), dated September 2, 2005 (‘‘BMA’s Letter’’); letter to Jonathan G. Katz, Secretary, Commission, from Marc E. Elias and Rebecca H. Gordon, Perkins Coie, Counsel to the Democratic Senatorial Campaign Committee (‘‘DSCC’’), dated September 6, 2005 (‘‘DSCC’s Letter’’); and letter to Jonathan G. Katz, Secretary, Commission, from David M. Thompson, President, and Robert J. 1 15 E:\FR\FM\29SEN1.SGM 29SEN1

Agencies

[Federal Register Volume 70, Number 188 (Thursday, September 29, 2005)]
[Notices]
[Pages 56943-56944]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-19498]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52494; File No. SR-CBOE-2005-70]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change to Extend a Pilot Program Relating to Market-Maker Access 
to the Hybrid Automatic Execution System

September 22, 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 September 12, 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 
Exchange. The Exchange has designated this proposal as ``non-
controversial'' pursuant to Section 19(b)(3)(A) of the Act,\3\ and Rule 
19b-4(f)(6) thereunder,\4\ which renders the proposed rule change 
effective upon filing with the Commission.\5\ The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
    \5\ The Exchange asked the Commission to waive the five business 
day pre-filing notice requirement. See Rule 19b-4(f)(6)(iii), 17 CFR 
240.19b-4(f)(6)(iii). The Commission is exercising its authority to 
waive the five business day pre-filing notice requirement and notes 
that the Exchange provided the Commission with four business days' 
notice.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend the pilot program in CBOE Rule 6.13 
relating to market-maker access to the Exchange's automatic execution 
system until October 12, 2006. No other changes are being made to the 
pilot program. The text of the proposed rule change is available on the 
Exchange's Web site (https://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
    In 2004, the Commission approved on a pilot basis, CBOE Rule 
6.13(b)(i)(C)(iii) (``Rule'') relating to the frequency with which 
certain market participants could submit orders for execution through 
the Exchange's Hybrid Trading System (``Hybrid'').\6\ CBOE Rule 
6.13(b)(i)(C)(iii) currently provides in relevant part:
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 50005 (July 12, 
2004), 69 FR 43032 (July 19, 2004) (SR-CBOE-2004-33). The pilot 
program has been extended once. See Securities Exchange Act Release 
No. 51030 (January 12, 2005), 70 FR 3404 (January 24, 2005) (SR-
CBOE-2004-91) (extension of the pilot program until October 12, 
2005).
---------------------------------------------------------------------------

    (iii) 15-Second Limitation: With respect to orders eligible for 
submission pursuant to paragraph (b)(i)(C)(ii), members shall neither 
enter nor permit the entry of multiple orders on the same side of the 
market in an option class within any 15-second period for an account or 
accounts of the same beneficial owner. The appropriate FPC may shorten 
the duration of this 15-second period by providing notice to the 
membership via a Regulatory Circular that is issued at least one day 
prior to implementation. The effectiveness of this rule shall terminate 
on October 12, 2005.
    Upon approval of the Rule, the Exchange began allowing orders from 
options exchange market-makers to be eligible for automatic execution 
subject to the 15-second limitation described above.\7\ As the pilot 
period expires on

[[Page 56944]]

October 12, 2005, the Exchange proposes to extend the pilot program. 
Given the success of the pilot program in attracting market-maker 
volume to the Exchange, the Exchange proposes to extend the pilot 
program's duration an additional year, until October 12, 2006.
---------------------------------------------------------------------------

    \7\ CBOE Rule 6.13(b)(i)(C)(ii) governs the submission of orders 
from market-makers (paragraph (C)(ii)(A)) and stock exchange 
specialists (paragraph (C)(ii)(B)). It should be noted that, 
pursuant CBOE Rule 6.13(b)(i)(C)(iii), the floor procedures 
committees (FPCs) determined to shorten to 5 seconds (from 15 
seconds) the period required between entry of multiple market-maker 
orders (including non-CBOE market-maker orders) on the same side of 
the market in an option class for an account or accounts of the same 
beneficial owner using Hybrid. This change went into effect on July 
18, 2005 and was announced to the membership via Regulatory Circular 
RG05-61.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the extension of the pilot program will 
allow the Exchange to continue to provide auto-ex access to all market-
makers. Accordingly, the Exchange believes the proposed rule change is 
consistent with the Act \8\ 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.\9\ Specifically, the Exchange 
believes the proposed rule change is consistent with the Section 
6(b)(5)\10\ requirements that the rules of an exchange be designed to 
promote just and equitable principles of trade, to prevent fraudulent 
and manipulative acts and, in general, to protect investors and the 
public interest.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78a et seq.
    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.

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

    The Exchange neither solicited nor received comments on the 
proposal.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate if consistent with 
the protection of investors and the public interest, the proposed rule 
change has become effective pursuant to Section 19(b)(3)(A) of the Act 
\11\ and Rule 19b-4(f)(6) thereunder.\12\
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate the 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 rule-comments@sec.gov. Please include 
File Number SR-CBOE-2005-70 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-2005-70. 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 Room. Copies of the 
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-2005-70 and should be submitted on or before 
October 20, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jonathan G. Katz,
Secretary.
[FR Doc. 05-19498 Filed 9-28-05; 8:45 am]
BILLING CODE 8010-01-P
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