Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change and Amendment Nos. 1 and 2 Thereto Relating to Transaction Fees Assessed on DIAMONDS Options, 61857-61859 [E5-5945]

Download as PDF Federal Register / Vol. 70, No. 206 / Wednesday, October 26, 2005 / Notices the sell side of a transaction. However, when the exchange accepts an ITS commitment to buy, the ultimate seller is a party on another market. The exchange lacks the ability to pass a fee to that seller directly, because the seller may not be a member of the exchange. Under the proposed arrangement, which the Commission understands will be adopted by each of the ITS participant exchanges,17 the exchange that routed the ITS commitment away will continue to collect a fee from the broker-dealer that placed the sell order. Then, with respect to each ITS participant exchange, the exchange will determine whether it is a net sender or net receiver of ITS trades and send fees to or accept fees from each other exchange accordingly. The Commission believes this is an equitable manner for the exchanges to obtain funds to pay their Section 31 fees on covered sales resulting from ITS trades. Under Section 19(b)(2) of the Act,18 the Commission may not approve any proposed rule change prior to the thirtieth day after the date of publication of the notice of filing thereof, unless the Commission finds good cause for so doing. The Commission hereby finds good cause for approving the proposed rule change prior to the thirtieth day after publishing notice of filing thereof in the Federal Register. In this case, the Commission does not believe a comment period is necessary because all of the parties affected by the proposed fee—the other ITS participant exchanges—have already consented to and will adopt the same fee arrangement.19 For the reasons set forth above, the Commission finds good cause to accelerate approval of the proposed rule change pursuant to Section 19(b)(2) of the Act.20 V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,21 that the proposed rule change (SR–BSE–2005– 41) is hereby approved on an accelerated basis. 17 See letter from George W. Mann, Jr., Executive Vice President and General Counsel, BSE, and Chairman, Subcommittee, to Michael Gaw, Assistant Director, Division, Commission, dated September 29, 2005. 18 15 U.S.C. 78s(b)(2). 19 See supra note 17. 20 Id. 21 Id. VerDate Aug<31>2005 16:26 Oct 25, 2005 Jkt 208001 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.22 Jonathan G. Katz, Secretary. [FR Doc. E5–5921 Filed 10–25–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52643; File No. SR–CBOE– 2005–71] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change and Amendment Nos. 1 and 2 Thereto Relating to Transaction Fees Assessed on DIAMONDS Options October 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 September 1, 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. On September 8, 2005, the CBOE submitted Amendment No. 1 to the proposed rule change.3 On October 17, 2005, the CBOE submitted Amendment No. 2 to the proposed rule change.4 The CBOE has designated this proposal as one establishing or changing a due, fee, or other charge imposed by the CBOE under section 19(b)(3)(A)(ii) of the Act,5 and Rule 19b–4(f)(2) thereunder,6 which renders the proposal effective upon filing with the Commission.7 The Commission is 22 17 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 a technical change to the proposed rule text. 4 In Amendment No. 2, the Exchange revised the proposed rule text to amend the transaction fees assessed to non-member market makers for orders in DIA options sent to CBOE through the Intermarket Options Linkage (‘‘Linkage’’) and outside of Linkage. The Exchange states that the transaction fees assessed to non-member marketmakers for orders in DIA options sent to CBOE through Linkage or outside of Linkage will be implemented on November 1, 2005. 5 15 U.S.C. 78s(b)(3)(A)(ii). 6 17 CFR 240.19b–4(f)(2). 7 The effective date of the original proposed rule change is September 1, 2005, the effective date of Amendment No. 1 is September 8, 2005, and the effective date of Amendment No. 2 is October 17, 2005. For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change, as amended, under Section 19(b)(3)(C) of the Act, the 1 15 PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 61857 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 Exchange proposes to amend its Fees Schedule relating to fees for options on the DIAMONDS  (‘‘DIA’’). 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. The text of the proposed rule change is also included below. Proposed new language is italicized; proposed deletions are in [brackets]. Chicago Board Options Exchange, Inc.— Fees Schedule [August 24]September 1, 2005 1. Options Transaction Fees (1)(3)(4)(7)(16): Per Contract. Equity Options (13): I.–IX. Unchanged. QQQQ and SPDR OPTIONS: I.–VII. Unchanged. INDEX OPTIONS (includes Dow Jones DIAMONDS, OEF and other ETF and HOLDRs options): I. CUSTOMER (2): S&P 100, PREMIUM > or = $1 ... S&P 100, PREMIUM < $1 ........... MNX and NDX ............................. RUT and [REDUCED VALUE RUSSELL 2000]RMN .............. ETF and HOLDRs options [(except DIA)] ........................... OTHER INDEXES, PREMIUM > OR = $1 ................................... OTHER INDEXES, PREMIUM < $1 ............................................. II. MARKET-MAKER AND DPM—EXCLUDING DOW JONES PRODUCTS: OTHER THAN DIA (10) .............. MARKET-MAKER—DOW JONES PRODUCTS (except DIA) (10) .................................. III. MEMBER FIRM PROPRIETARY: (11) FACILITATION OF CUSTOMER ORDER, MNX and NDX .......... FACILITATION OF CUSTOMER ORDER, OTHER INDEXES .... NON-FACILITATION ORDER ..... IV. BROKER-DEALER (EXCLUDING THE PRODUCTS BELOW) INDEX CUSTOMER RATES: ETF (except DIA), HOLDRS, RUT and [REDUCED VALUE RUSSELL 2000]RMN, PREMIUM > or = $1 ....................... $.35 .20 .15 .15 .15 .45 .25 .24 .34 .24 .20 .24 .45 Commission considers the period to commence on October 17, 2005, the date on which the Exchange submitted Amendment No. 2. See 15 U.S.C. 78s(b)(3)(C). E:\FR\FM\26OCN1.SGM 26OCN1 61858 Federal Register / Vol. 70, No. 206 / Wednesday, October 26, 2005 / Notices ETF (except DIA), HOLDRS, RUT and [REDUCED VALUE RUSSELL 2000]RMN, PREMIUM < $1 ............................... DIA, MNX and NDX ..................... V. NON-MEMBER MARKET MAKER: DIA ............................................... S&P 100 (including OEF), PREMIUM > or = $1 ....................... S&P 100 (including OEF), PREMIUM < $1 ............................... OTHER INDEXES, PREMIUM > or = $1 ..................................... OTHER INDEXES, PREMIUM < $1 ............................................. VI. MNX and NDX LICENSE FEE (15) VII. RUT DPM and MARKET MAKER LICENSE FEE (Russell 2000 cash settled index) (12) ........................................... VIII. LINKAGE ORDERS (8)(15): DIA ............................................... S&P 100 (OEF), PREMIUM > or = $1 .......................................... S&P 100 (OEF), PREMIUM < $1 OTHER INDEXES, PREMIUM > or = $1 ..................................... OTHER INDEXES, PREMIUM < $1 ............................................. .25 .25 $.26 .37 .22 .47 .27 .10 .10 .26 .35 .20 .45 .25 2. MARKET-MAKER, RMM, e-DPM & DPM MARKETING FEE (in option classes in which a DPM has been appointed) (6)(16): Unchanged. 3. FLOOR BROKERAGE FEE (1)(5)(16): Unchanged. 4. RAES ACCESS FEE (RETAIL AUTOMATIC EXECUTION SYSTEM) (1)(4)(16): Unchanged. * * * * * 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 CBOE included statements concerning the purpose of, and basis for, the proposed rule change, as amended, and discussed any comments it received on the proposed rule change, as amended. 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 proposes to amend its Fees Schedule to amend certain fees for DIA options. Specifically, the Exchange proposes to reduce customer and broker-dealer fees for transactions in DIA options, amend non-member VerDate Aug<31>2005 16:26 Oct 25, 2005 Jkt 208001 market-maker fees for orders in DIA options sent to CBOE through Linkage and outside of Linkage,8 and eliminate the market-maker license fee surcharge applicable to transactions in DIA options. In particular, the transaction fees for public customer transactions in DIA options are currently $.45 per contract if the premium is equal to or greater than $1, and $.25 per contract if the premium is less than $1. The Exchange proposes to reduce the transaction fees for public customer transactions in DIA options to $.15 per contract, regardless of the premium. Moreover, the transaction fees for broker-dealer transactions in DIA options are currently $.45 per contract if the premium is equal to or greater than $1, and $.25 per contract if the premium is less than $1. The Exchange proposes to reduce the transaction fees for brokerdealer transactions in DIA options to $.25 per contract, regardless of the premium. Further, the transaction fees for non-member market-maker transactions in DIA options are currently $.47 per contract if the premium is greater than or equal to $1, and $.27 per contract if the premium is less than $1. The transaction fees assessed to non-member market-makers for orders in DIA options sent to CBOE through Linkage are currently $.45 per contract if the premium is greater than or equal to $1, and $.25 per contract if the premium is less than $1. The Exchange proposes to change both the non-member market maker transaction fee and the Linkage transaction fee for transactions in DIA options to $.26 per contract, regardless of the premium.9 In addition, the Exchange currently charges market-makers that trade Dow Jones products, including DIA options, a license fee of $.10 per contract in addition to the regular transaction fee of $.24 per contract, to assist the Exchange in offsetting some of the royalty fees the Exchange must pay to Dow Jones for its license to trade Dow Jones products.10 The Exchange proposes to eliminate the $.10 license fee solely with respect to market-maker transactions in DIA options.11 8 See Amendment No. 2, supra note 4. Amendment No. 2, supra note 4. According to CBOE, the proposed changes to the transaction fees assessed to non-member market-makers for orders in DIA options sent to CBOE through Linkage or outside of Linkage will be implemented on November 1, 2005. 10 See Securities Exchange Act Release No. 48223 (July 24, 2003), 68 FR 44978, 44979 (July 31, 2003). 11 The Commission notes that the Exchange currently charges market-makers that trade Dow Jones products, including DIA options, a total fee of $.34 per contract, which reflects a $.10 licensing fee surcharge. Under the proposed rule change, the 9 See PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 The proposed rule change, as amended, is intended to establish fees for CBOE’s DIA options that will be competitive with fees charged by other exchanges for transactions in DIA options. The Exchange also proposes to make a minor technical amendment to its Fees Schedule to change references relating to ‘‘Reduced Value Russell 2000’’ options to its ticker symbol, ‘‘RMN.’’ 2. Statutory Basis The CBOE believes that the proposed rule change, as amended, is consistent with section 6(b) of the Act,12 in general, and furthers the objectives of section 6(b)(4) of the Act,13 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among CBOE members. B. Self-Regulatory Organization’s Statement on Burden on Competition The CBOE does not believe that the proposed rule change, as amended, will impose any burden on competition. 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 The foregoing proposed rule change, as amended, has been designated as a fee change pursuant to section 19(b)(3)(A)(ii) of the Act 14 and Rule 19b–4(f)(2) 15 thereunder, because it establishes or changes a due, fee or other charge imposed by the Exchange. Accordingly, the proposal will take effect upon filing with the Commission.16 At any time within 60 days of the filing of the proposed rule change, as amended, 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.17 fee for market-makers that trade DIA options will be $.24 per contract. 12 15 U.S.C. 78f(b). 13 15 U.S.C. 78f(b)(4). 14 15 U.S.C. 78s(b)(3)(A)(ii). 15 17 CFR 240.19b–4(f)(2). 16 See supra note 7. 17 Id. E:\FR\FM\26OCN1.SGM 26OCN1 Federal Register / Vol. 70, No. 206 / Wednesday, October 26, 2005 / Notices IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, 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.18 Jonathan G. Katz, Secretary. [FR Doc. E5–5945 Filed 10–25–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION 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–2005–71 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. [Release No. 34–52631; File No. SR–FICC– 2005–14] Self-Regulatory Organizations; Fixed Income Clearing Corporation; Notice of Filing of a Proposed Rule Change Relating to the Federal Reserve’s National Settlement System October 18, 2005. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on September 9, 2005, Fixed Income Clearing Corporation (‘‘FICC’’) filed All submissions should refer to File with the Securities and Exchange Number SR–CBOE–2005–71. This file Commission (‘‘Commission’’) the number should be included on the proposed rule change as described in subject line if e-mail is used. To help the Items I, II, and III below, which items Commission process and review your have been prepared primarily by FICC. comments more efficiently, please use The Commission is publishing this only one method. The Commission will notice to solicit comments on the post all comments on the Commission’s proposed rule change from interested persons. Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the I. Self-Regulatory Organization’s submission, all subsequent Statement of the Terms of Substance of amendments, all written statements the Proposed Rule Change with respect to the proposed rule The proposed rule change would change, as amended, that are filed with amend the rules of FICC’s Government the Commission, and all written Securities Division (‘‘GSD’’) to have communications relating to the funds-only settlement obligation proposed rule change, as amended, payment processing occur through the between the Commission and any Federal Reserve’s National Settlement person, other than those that may be withheld from the public in accordance System (‘‘NSS’’). with the provisions of 5 U.S.C. 552, will II. Self-Regulatory Organization’s be available for inspection and copying Statement of the Purpose of, and in the Commission’s Public Reference Statutory Basis for, the Proposed Rule Room. Copies of such filing also will be Change available for inspection and copying at In its filing with the Commission, the principal office of the CBOE. All FICC included statements concerning comments received will be posted the purpose of and basis for the without change; the Commission does proposed rule change and discussed any not edit personal identifying comments it received on the proposed information from submissions. You rule change. The text of these statements should submit only information that may be examined at the places specified you wish to make available publicly. All in Item IV below. FICC has prepared submissions should refer to File summaries, set forth in Sections (A), (B), Number SR–CBOE–2005–71 and should and (C) below, of the most significant be submitted on or before November 16, aspects of such statements.2 2005. 18 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 The Commission has modified parts of these statements. 1 15 VerDate Aug<31>2005 16:26 Oct 25, 2005 Jkt 208001 PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 61859 (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The purpose of the proposed rule change is to amend the rules of GSD to require netting members to satisfy their funds-only settlement amounts ultimately through the Federal Reserve’s NSS.3 GSD’s funds-only settlement process is set forth in GSD Rule 13. On a daily basis, FICC reports a funds-only settlement amount, which is either a debit amount or a credit amount, to each netting member. Each netting member that has a debit is required to satisfy its obligation by the applicable deadline. Netting members with credits are subsequently paid by FICC by the applicable deadline. All payments of funds-only settlement amounts by a netting member to FICC and all collections of funds-only settlement amounts by a netting member from FICC are done through depository institutions that are designated by such netting member and FICC to act on their behalves with regard to such payments and collections. All payments are made by fund wires from one depository institution to the other. In 1997, the Commission approved an enhancement to GSCC’s 4 funds-only settlement payment processing (‘‘1997 Filing’’).5 This enhancement gave members the option to participate in an auto-debit arrangement that was to eliminate the need to send fund wires for the satisfaction of funds-only settlement payments. Under the autodeposit arrangement, GSCC, the netting member, and the netting member’s depository institution would enter into a ‘‘funds-only settlement procedures agreement’’ whereby the depository institution would pay or collect fundsonly settlement amounts on behalf of the netting member and GSCC through accounts of the member at the depository institution. As a result, the 3 This is consistent with the manner in which FICC’s affiliates, The Depository Trust Company (‘‘DTC’’) and the National Securities Clearing Corporation (‘‘NSCC’’), handle their funds settlement process. DTC and NSCC do not currently use NSS for the processing of funds credits, whereas FICC is proposing to have the GSD process both the debits and credits of its funds-only settlement process through NSS. 4 The Government Securities Clearing Corporation (‘‘GSCC’’) was the predecessor to GSD. GSCC became the GSD division of FICC when GSCC and the Mortgage Backed Securities Clearing Corporation were merged to create FICC in 2002. 5 Securities Exchange Act Release No. 39309 (November 7, 1997), 62 FR 61158 (November 14, 1997) [File No. SR–GSCC–97–06]. E:\FR\FM\26OCN1.SGM 26OCN1

Agencies

[Federal Register Volume 70, Number 206 (Wednesday, October 26, 2005)]
[Notices]
[Pages 61857-61859]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-5945]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52643; File No. SR-CBOE-2005-71]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change and Amendment Nos. 1 and 2 Thereto Relating to 
Transaction Fees Assessed on DIAMONDS Options

October 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 September 1, 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. 
On September 8, 2005, the CBOE submitted Amendment No. 1 to the 
proposed rule change.\3\ On October 17, 2005, the CBOE submitted 
Amendment No. 2 to the proposed rule change.\4\ The CBOE has designated 
this proposal as one establishing or changing a due, fee, or other 
charge imposed by the CBOE under section 19(b)(3)(A)(ii) of the Act,\5\ 
and Rule 19b-4(f)(2) thereunder,\6\ which renders the proposal 
effective upon filing with the Commission.\7\ The Commission is 
publishing this notice to solicit comments on the proposed rule change, 
as amended, from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the Exchange made a technical change to 
the proposed rule text.
    \4\ In Amendment No. 2, the Exchange revised the proposed rule 
text to amend the transaction fees assessed to non-member market 
makers for orders in DIA options sent to CBOE through the 
Intermarket Options Linkage (``Linkage'') and outside of Linkage. 
The Exchange states that the transaction fees assessed to non-member 
market-makers for orders in DIA options sent to CBOE through Linkage 
or outside of Linkage will be implemented on November 1, 2005.
    \5\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \6\ 17 CFR 240.19b-4(f)(2).
    \7\ The effective date of the original proposed rule change is 
September 1, 2005, the effective date of Amendment No. 1 is 
September 8, 2005, and the effective date of Amendment No. 2 is 
October 17, 2005. For purposes of calculating the 60-day period 
within which the Commission may summarily abrogate the proposed rule 
change, as amended, under Section 19(b)(3)(C) of the Act, the 
Commission considers the period to commence on October 17, 2005, the 
date on which the Exchange submitted Amendment No. 2. See 15 U.S.C. 
78s(b)(3)(C).
---------------------------------------------------------------------------

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

    The Exchange proposes to amend its Fees Schedule relating to fees 
for options on the DIAMONDS [reg] (``DIA''). 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. The text of the proposed rule 
change is also included below. Proposed new language is italicized; 
proposed deletions are in [brackets].
Chicago Board Options Exchange, Inc.--Fees Schedule
[August 24]September 1, 2005
    1. Options Transaction Fees (1)(3)(4)(7)(16): Per Contract.
    Equity Options (13):
    I.-IX. Unchanged.
    QQQQ and SPDR OPTIONS:
    I.-VII. Unchanged.
    INDEX OPTIONS (includes Dow Jones DIAMONDS, OEF and other ETF and 
HOLDRs options):

 
 
 
I. CUSTOMER (2):
    S&P 100, PREMIUM > or = $1..................................    $.35
    S&P 100, PREMIUM < $1.......................................     .20
    MNX and NDX.................................................     .15
    RUT and [REDUCED VALUE RUSSELL 2000]RMN.....................     .15
    ETF and HOLDRs options [(except DIA)].......................     .15
    OTHER INDEXES, PREMIUM > OR = $1............................     .45
    OTHER INDEXES, PREMIUM < $1.................................     .25
II. MARKET-MAKER AND DPM--EXCLUDING DOW JONES PRODUCTS:
    OTHER THAN DIA (10).........................................     .24
    MARKET-MAKER--DOW JONES PRODUCTS (except DIA) (10)..........     .34
III. MEMBER FIRM PROPRIETARY: (11)
    FACILITATION OF CUSTOMER ORDER, MNX and NDX.................     .24
    FACILITATION OF CUSTOMER ORDER, OTHER INDEXES...............     .20
    NON-FACILITATION ORDER......................................     .24
IV. BROKER-DEALER (EXCLUDING THE PRODUCTS BELOW) INDEX CUSTOMER
 RATES:
    ETF (except DIA), HOLDRS, RUT and [REDUCED VALUE RUSSELL         .45
     2000]RMN, PREMIUM > or = $1................................

[[Page 61858]]

 
    ETF (except DIA), HOLDRS, RUT and [REDUCED VALUE RUSSELL         .25
     2000]RMN, PREMIUM < $1.....................................
    DIA, MNX and NDX............................................     .25
V. NON-MEMBER MARKET MAKER:
    DIA.........................................................    $.26
    S&P 100 (including OEF), PREMIUM > or = $1..................     .37
    S&P 100 (including OEF), PREMIUM < $1.......................     .22
    OTHER INDEXES, PREMIUM > or = $1............................     .47
    OTHER INDEXES, PREMIUM < $1.................................     .27
VI. MNX and NDX LICENSE FEE (15)                                     .10
VII. RUT DPM and MARKET MAKER LICENSE FEE
    (Russell 2000 cash settled index) (12)......................     .10
VIII. LINKAGE ORDERS (8)(15):
    DIA.........................................................     .26
    S&P 100 (OEF), PREMIUM > or = $1............................     .35
    S&P 100 (OEF), PREMIUM < $1.................................     .20
    OTHER INDEXES, PREMIUM > or = $1............................     .45
    OTHER INDEXES, PREMIUM < $1.................................     .25
 

    2. MARKET-MAKER, RMM, e-DPM & DPM MARKETING FEE (in option classes 
in which a DPM has been appointed) (6)(16): Unchanged.
    3. FLOOR BROKERAGE FEE (1)(5)(16): Unchanged.
    4. RAES ACCESS FEE (RETAIL AUTOMATIC EXECUTION SYSTEM) (1)(4)(16): 
Unchanged.
* * * * *

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 CBOE included statements 
concerning the purpose of, and basis for, the proposed rule change, as 
amended, and discussed any comments it received on the proposed rule 
change, as amended. 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 proposes to amend its Fees Schedule to amend certain 
fees for DIA options. Specifically, the Exchange proposes to reduce 
customer and broker-dealer fees for transactions in DIA options, amend 
non-member market-maker fees for orders in DIA options sent to CBOE 
through Linkage and outside of Linkage,\8\ and eliminate the market-
maker license fee surcharge applicable to transactions in DIA options.
---------------------------------------------------------------------------

    \8\ See Amendment No. 2, supra note 4.
---------------------------------------------------------------------------

    In particular, the transaction fees for public customer 
transactions in DIA options are currently $.45 per contract if the 
premium is equal to or greater than $1, and $.25 per contract if the 
premium is less than $1. The Exchange proposes to reduce the 
transaction fees for public customer transactions in DIA options to 
$.15 per contract, regardless of the premium. Moreover, the transaction 
fees for broker-dealer transactions in DIA options are currently $.45 
per contract if the premium is equal to or greater than $1, and $.25 
per contract if the premium is less than $1. The Exchange proposes to 
reduce the transaction fees for broker-dealer transactions in DIA 
options to $.25 per contract, regardless of the premium. Further, the 
transaction fees for non-member market-maker transactions in DIA 
options are currently $.47 per contract if the premium is greater than 
or equal to $1, and $.27 per contract if the premium is less than $1. 
The transaction fees assessed to non-member market-makers for orders in 
DIA options sent to CBOE through Linkage are currently $.45 per 
contract if the premium is greater than or equal to $1, and $.25 per 
contract if the premium is less than $1. The Exchange proposes to 
change both the non-member market maker transaction fee and the Linkage 
transaction fee for transactions in DIA options to $.26 per contract, 
regardless of the premium.\9\
---------------------------------------------------------------------------

    \9\ See Amendment No. 2, supra note 4. According to CBOE, the 
proposed changes to the transaction fees assessed to non-member 
market-makers for orders in DIA options sent to CBOE through Linkage 
or outside of Linkage will be implemented on November 1, 2005.
---------------------------------------------------------------------------

    In addition, the Exchange currently charges market-makers that 
trade Dow Jones products, including DIA options, a license fee of $.10 
per contract in addition to the regular transaction fee of $.24 per 
contract, to assist the Exchange in offsetting some of the royalty fees 
the Exchange must pay to Dow Jones for its license to trade Dow Jones 
products.\10\ The Exchange proposes to eliminate the $.10 license fee 
solely with respect to market-maker transactions in DIA options.\11\
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release No. 48223 (July 24, 
2003), 68 FR 44978, 44979 (July 31, 2003).
    \11\ The Commission notes that the Exchange currently charges 
market-makers that trade Dow Jones products, including DIA options, 
a total fee of $.34 per contract, which reflects a $.10 licensing 
fee surcharge. Under the proposed rule change, the fee for market-
makers that trade DIA options will be $.24 per contract.
---------------------------------------------------------------------------

    The proposed rule change, as amended, is intended to establish fees 
for CBOE's DIA options that will be competitive with fees charged by 
other exchanges for transactions in DIA options.
    The Exchange also proposes to make a minor technical amendment to 
its Fees Schedule to change references relating to ``Reduced Value 
Russell 2000'' options to its ticker symbol, ``RMN.''
2. Statutory Basis
    The CBOE believes that the proposed rule change, as amended, is 
consistent with section 6(b) of the Act,\12\ in general, and furthers 
the objectives of section 6(b)(4) of the Act,\13\ in particular, in 
that it is designed to provide for the equitable allocation of 
reasonable dues, fees, and other charges among CBOE members.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The CBOE does not believe that the proposed rule change, as 
amended, will impose any burden on competition.

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

    The foregoing proposed rule change, as amended, has been designated 
as a fee change pursuant to section 19(b)(3)(A)(ii) of the Act \14\ and 
Rule 19b-4(f)(2) \15\ thereunder, because it establishes or changes a 
due, fee or other charge imposed by the Exchange. Accordingly, the 
proposal will take effect upon filing with the Commission.\16\ At any 
time within 60 days of the filing of the proposed rule change, as 
amended, 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.\17\
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    \14\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \15\ 17 CFR 240.19b-4(f)(2).
    \16\ See supra note 7.
    \17\ Id.

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[[Page 61859]]

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, 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-2005-71 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-2005-71. 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, as 
amended, that are filed with the Commission, and all written 
communications relating to the proposed rule change, as amended, 
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-2005-71 and should be 
submitted on or before November 16, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
 [FR Doc. E5-5945 Filed 10-25-05; 8:45 am]
BILLING CODE 8010-01-P
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