Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change and Amendment No. 1 Thereto Relating to Transaction Fees for Options on the Dow Jones Industrial Average, 72480-72483 [E5-6831]
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Federal Register / Vol. 70, No. 232 / Monday, December 5, 2005 / Notices
does not extend to the member unless
the person would reasonably expect the
member to be included.
Paragraph 429(g)(2) defines the terms
‘‘telemarketing’’ and ‘‘telephone
solicitation’’ to mean the initiation of a
telephone call or message for the
purpose of encouraging the purchase or
rental of, or investment in, property,
goods, or services, which is transmitted
to any person.
The term ‘‘personal relationship’’ is
defined in paragraph 429(g)(3) as any
family member, friend, or acquaintance
of the telemarketer making the call. The
term ‘‘account activity’’ as defined in
paragraph 429(g)(4) shall include, but
not be limited to, purchases, sales
interest credits or debits, charges or
credits, dividend payments, transfer
activity, securities receipts or deliveries,
and/or journal entries relating to
securities or funds in the possession or
control of the member. Finally, the term
‘‘broker/dealer of record’’ as defined in
paragraph 429(g)(5) refers to the broker/
dealer identified on a customer’s
account application for accounts held
directly at a mutual fund or variable
insurance product issuer.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6 of the Exchange Act 11 in
general and furthers the objectives of
Section 6(b)(5) 12 in particular in that it
is designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities,
and to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system. The Exchange believes the
proposed rule change will enhance
investor protection by enabling persons
who do not want to receive telephone
solicitations from members or member
organizations to receive the protections
of the national do-not-call registry.
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 Exchange Act.
11 15
12 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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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 by the Exchange on this
proposal.
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, as amended, is consistent with
the Exchange 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–Amex–2005–064 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–Amex–2005–064. 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
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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 Amex. 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–Amex–2005–064 and
should be submitted on or before
December 27, 2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Jonathan G. Katz,
Secretary.
[FR Doc. E5–6828 Filed 12–2–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52851; File No. SR–CBOE–
2005–84]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change and Amendment No. 1
Thereto Relating to Transaction Fees
for Options on the Dow Jones
Industrial Average
November 29, 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 October
11, 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 November 22, 2005,
the CBOE submitted Amendment No. 1
to the proposed rule change.3 The CBOE
13 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 revised the
proposed rule text to amend the fees assessed to
non-member market-makers for transactions in
options on the Dow Jones Industrial Average (‘‘DJX
options’’) and in ‘‘Jumbo’’ options on the Dow Jones
Industrial Average (‘‘DXL options’’). The Exchange
states that this change in fees assessed to nonmember market-makers for transactions in DJX
1 15
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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,4
and Rule 19b–4(f)(2) thereunder,5 which
renders the proposal effective upon
filing with the Commission.6 The
Commission is publishing this notice to
solicit comments on the proposed rule
change, as amended, from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
Fees Schedule to: (i) Amend certain fees
for DJX options, and (ii) establish fees
for DXL options. 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
[OCTOBER 1, 2005] NOVEMBER 2,
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) (17):
I. CUSTOMER (2):
• S&P 100, PREMIUM > or = $1 .............................................................................................................................................
• S&P 100, PREMIUM < $1 .....................................................................................................................................................
• DJX, MNX, [and] NDX, RUT and RMN ...............................................................................................................................
• [RUT and RMN .....................................................................................................................................................................
• ETF and HOLDRs options ....................................................................................................................................................
• OTHER INDEXES, PREMIUM > OR = $1 ............................................................................................................................
• OTHER INDEXES, PREMIUM < $1 .....................................................................................................................................
II. MARKET-MAKER AND DPM (10): [—EXCLUDING DOW JONES PRODUCTS OTHER THAN DIA (10)$.24]
[MARKET-MAKER—DOW JONES PRODUCTS (except DIA) (10) ........................................................................................
• DOW JONES PRODUCTS (except DIA and DJX) ................................................................................................................
• OTHER INDEXES ..................................................................................................................................................................
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.
• DJX, ETF (except DIA), HOLDRS, RUT and RMN, PREMIUM > or = $1 .........................................................................
• DJX, ETF (except DIA), HOLDRS, RUT and RMN, PREMIUM < $1 .................................................................................
• DIA, MNX and NDX .............................................................................................................................................................
V. NON-MEMBER MARKET MAKER:
• DIA and DJX .........................................................................................................................................................................
• DXL ........................................................................................................................................................................................
• 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.– IX. Unchanged.
2. MARKETING FEE (6)(16) ............................................................................................................................................................
3. FLOOR BROKERAGE FEE (1)(5)(16)(17):
• EQUITY & QQQQ CUSTOMER ORDER ..............................................................................................................................
• ALL OTHER EQUITY, QQQQ AND INDEX OPTIONS (8) ................................................................................................
• CROSSED ORDERS ...............................................................................................................................................................
4. RAES ACCESS FEE (RETAIL AUTOMATIC EXECUTION SYSTEM) (1)(4)(16):
• INDEX CUSTOMER TRANSACTIONS ................................................................................................................................
• DOW JONES, ASSESSED ON THE FIRST 25 CONTRACTS ONLY
• NON-CUSTOMER TRANSACTIONS (ORIGIN CODE OTHER THAN ‘‘C’’)(8)(9) .............................................................
FOOTNOTES: Unchanged.
5.–6. Unchanged.
7. INDEXES CUSTOMER ORDER BOOK OFFICIAL (OBO) EXECUTION FEES(16)(17):
$.35
$.20
$.15
$.15]
$.15
$.45
$.25
$.34]
$.34
$.24
$.24
$.20
$.24
$.45
$.25
$.25
$.26
$.36
$.37
$.22
$.47
$.27
$.22
$.00
$.04
$.02
$.25
$.30
Rate Per Contract (1)
Accommodation Liquidation Or Cabinet Order .....................................................................................................................
All Other Orders .......................................................................................................................................................................
$.10
.25
(1) OEX—No charge for ‘‘market’’ and
‘‘limit orders’’ placed with the OBO
prior to the opening and executed
during opening rotation.
Other Indexes—Same as above for
index ‘‘market orders’’ (‘‘limit orders’’
not included).
options and DXL options will be implemented on
December 1, 2005.
4 15 U.S.C. 78s(b)(3)(A)(ii).
5 17 CFR 240.19b–4(f)(2).
6 The effective date of the original proposed rule
change is October 11, 2005, and the effective date
of Amendment No. 1 is November 22, 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 November 22, 2005, the
date on which the Exchange submitted Amendment
No. 1. See 15 U.S.C. 78s(b)(3)(C).
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Federal Register / Vol. 70, No. 232 / Monday, December 5, 2005 / Notices
Remainder of Fees Schedule—
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
Exchange 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 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
The Exchange proposes to amend its
Fees Schedule to reduce and eliminate
certain fees for DJX options and to
establish fees for DXL options.
a. DJX Options Fees. The Exchange
proposes to reduce customer and nonmember market-maker fees for
transactions in DJX options and
eliminate the market-maker license fee
surcharge applicable to transactions in
DJX options.
Currently, customer transaction fees
for transactions in DJX options are $.45
if the premium is greater than or equal
to $1 and $.25 if the premium is less
than $1. The Exchange proposes to
reduce fees for public customer
transactions in DJX options to $.15 per
contract. Moreover, the transaction fees
for non-member market-maker
transactions in DJX 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 Exchange proposes to
reduce the non-member market maker
transaction fee for transactions in DJX
options to $.26 per contract, regardless
of the premium.7
In addition, the Exchange currently
charges market-makers that trade Dow
Jones products, except options on
DIAMONDS (‘‘DIA’’), 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
7 See
Amendment No. 1, supra note 3. According
to CBOE, the proposed change to the fees assessed
to non-member market-makers for transactions in
DJX options will be implemented on December 1,
2005.
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17:14 Dec 02, 2005
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license to trade Dow Jones products.8
The Exchange proposes to eliminate the
$.10 license fee with respect to marketmaker transactions in DJX options.9
The Exchange is reducing these fees
in connection with DJX options moving
to CBOE’s Hybrid Trading System.10
The proposed fees changes are intended
to make DJX options competitively
priced with respect to DIA options.
b. DXL Options. The Exchange
launched trading in DXL options on
October 11, 2005.11 DXL options are
options that are based on one-tenth the
value of the Dow Jones Industrial
Average (‘‘DJIA’’).12 DXL options will
trade in open outcry. The Exchange
proposes to amend its Fees Schedule to
establish fees for DXL options.
Specifically, the Exchange proposes to
assess public customers a transaction
fee for DXL options of $.45 if the
premium is greater than or equal to $1
and $.25 if the premium is less than $1.
Market-maker transaction fees for DXL
options will be $.34, which consists of
the standard $.24 transaction fee and the
$.10 license fee surcharge assessed on
certain Dow Jones index options as
described above. Non-member marketmaker transaction fees for DXL options
will be $.36, regardless of the
premium.13
Member firm proprietary transaction
fees for DXL options will be $.20 for
facilitation of customer orders and $.24
for non-facilitation orders. Broker-dealer
transaction fees for DXL options will be
$.45 if the premium is greater than or
equal to $1 and $.25 if the premium is
less than $1.
The floor brokerage fee for DXL
options will be $.04, and for crossed
8 See
Securities Exchange Act Release No. 48223
(July 24, 2003), 68 FR 44978, 44979 (July 31, 2003).
9 The Commission notes that the Exchange
currently charges market-makers that trade Dow
Jones products, except 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 DJX options will be
$.24 per contract.
10 Conversation between Jaime Galvan, Assistant
Secretary, CBOE and Sara Gillis, Attorney, Division
of Market Regulation, Commission on November 23,
2005.
11 Id.
12 DXL options are referred to as ‘‘Jumbo-DJX’’
options because they are ten times larger than DJX
options (DJX options are based on 1/100th the value
of the DJIA).
13 See Amendment No. 1, supra note 3. CBOE had
originally proposed to charge non-member marketmakers a transaction fee for transactions in DXL
options of $.47 per contract if the premium was
greater than or equal to $1 and $.27 per contract if
the premium was less then $1. In Amendment No.
1, CBOE proposed to change the non-member
market-maker transaction fees for DXL options to
$.36 per contract, regardless of the premium.
According to CBOE, the proposed change to the fees
assessed to non-member market-makers for
transactions in DXL options will be implemented
on December 1, 2005.
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orders, the floor brokerage fee will be
$.02. The RAES Access Fee will be $.25
for customer transactions (only the first
25 contracts will be assessed) and $.30
for non-customer transactions. Order
Book Official (‘‘OBO’’) execution fees
will be $.10 per contract for cabinet and
accommodation/liquidation trades and
$.25 per contract for all other orders.
2. Statutory Basis
The CBOE believes that the proposed
rule change, as amended, is consistent
with Section 6(b) of the Act,14 in
general, and furthers the objectives of
Section 6(b)(4) of the Act,15 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
The CBOE does not believe that the
proposed rule change, as amended, 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
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 16 and Rule
19b–4(f)(2) 17 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.18 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.19
14 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
16 15 U.S.C. 78s(b)(3)(A)(ii).
17 17 CFR 240.19b–4(f)(2).
18 See supra note 6.
19 Id.
15 15
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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.20
Jonathan G. Katz,
Secretary.
[FR Doc. E5–6831 Filed 12–2–05; 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–2005–84 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–2005–84. 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–2005–84 and should
be submitted on or before December 27,
2005.
[Release No. 34–52852; File No. SR–DTC–
2005–18]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Clarify the
Scope of Risk Management Controls
as They Relate to Maturity
Presentment Transactions of Pledged
Money Market Instruments
November 29, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
October 28, 2005, The Depository Trust
Company (‘‘DTC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) and on November 16,
2005, amended the proposed rule
change described in Items I, II, and III
below, which items have been prepared
primarily by DTC. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested parties.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The purpose of the proposed rule
change is to clarify the scope of DTC’s
use of risk management controls as they
relate to maturity presentment (‘‘MP’’)
transactions of pledged Money Market
Instruments (‘‘MMIs’’).
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
DTC 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. DTC has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of these statements.2
1 15
U.S.C. 78s(b)(1).
Commission has modified the text of the
summaries prepared by DTC.
2 The
20 17
CFR 200.30–3(a)(12).
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72483
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
The proposed rule change clarifies the
scope of DTC’s use of risk management
controls as they relate to MP
transactions of pledged MMIs.3
Specifically, pledged MP transactions
shall be processed in the same manner
as non-pledged MP transactions 4 and
therefore subject to DTC’s collateral
monitor and net debit cap controls.5 As
is the case for unpledged MPs, pledged
MPs shall only be processed if they will
not cause the IPA’s collateral monitor or
net debit cap to become negative.
Other pledged MPs shall recycle in a
‘‘pend’’ queue until additional collateral
or liquidity for the IPA is infused later
in the day, which may come from
payments sent to DTC by the IPA or
from credits resulting from the issuance
of new commercial paper.
The proposed rule change is
consistent with the requirements of
Section 17A of the Act 6 and the rules
and regulations thereunder applicable to
DTC because it assures the safeguarding
of securities and funds which are in the
custody or control of DTC because
pledged MP transactions will be
processed in the same manner as nonpledged MP transactions and therefore
3 For background information regarding DTC’s
MMI program, see Securities Exchange Act Release
Nos. 49618 (April 26, 2004), 69 FR 23840 [File No.
SR–DTC–2003–12]; 48145 (July 9, 2003), 68 FR
42442 [File No. SR–DTC–2003–03]; 39422
(December 17, 1997), 62 FR 66158 [File No. SR–
DTC–97–20]; 36811 (February 5, 1996), 61 FR 5433
[File No. SR–DTC–95–15]; 35655 (April 28, 1995),
60 FR 22423 [File No. SR–DTC–95–05]; 33958
(April 22, 1994), 59 FR 22878 [File No. SR–DTC–
93–12]; and 28424 (September 11, 1990), 55 FR
38428 [File No. SR–DTC–90–08].
4 MMI maturity processing is initiated
automatically each morning by DTC, which
electronically sweeps all maturing positions of MMI
CUSIPs from investors’ custodian accounts and
generates the appropriate MPs. The MMI is then
delivered to the account of the appropriate issuing/
paying agent (‘‘IPA’’). DTC debits the IPA’s account
in the amount of the maturity proceeds for
settlement that day. DTC credits the same amount
of the maturity proceeds to the investor’s custodian
account for payment that day to the investor.
Processing of a pledged maturing MMI uses a DTC
internal account and generates deliver orders from
the internal account to the pledgor upon the
processing of the release. However, in the event of
a market disruption, pledged MMIs will be
automatically swept and processed and will not be
included in the maturity presentment contingency
system (MPCS) processing as are non-pledged
MMIs, which can be selectively released for
processing in a market disruption using MPCS.
5 Dealers or custodian banks may pledge MMI
positions to a pledgee bank. When the applicable
MMI matures, MP transactions are staged to DTC’s
Account Transaction Processor to deliver the
pledged position from an internal DTC account to
the IPA in exchange for the total maturity payment
of the pledged position.
6 15 U.S.C. 78q–1.
E:\FR\FM\05DEN1.SGM
05DEN1
]]>Agencies
[Federal Register Volume 70, Number 232 (Monday, December 5, 2005)]
[Notices]
[Pages 72480-72483]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-6831]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52851; File No. SR-CBOE-2005-84]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change and Amendment No. 1 Thereto Relating to
Transaction Fees for Options on the Dow Jones Industrial Average
November 29, 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 October 11, 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 November 22, 2005, the CBOE submitted Amendment No. 1 to the
proposed rule change.\3\ The CBOE
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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,\4\ and Rule 19b-4(f)(2) thereunder,\5\ which renders the
proposal effective upon filing with the Commission.\6\ The Commission
is publishing this notice to solicit comments on the proposed rule
change, as amended, from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ In Amendment No. 1, the Exchange revised the proposed rule
text to amend the fees assessed to non-member market-makers for
transactions in options on the Dow Jones Industrial Average (``DJX
options'') and in ``Jumbo'' options on the Dow Jones Industrial
Average (``DXL options''). The Exchange states that this change in
fees assessed to non-member market-makers for transactions in DJX
options and DXL options will be implemented on December 1, 2005.
\4\ 15 U.S.C. 78s(b)(3)(A)(ii).
\5\ 17 CFR 240.19b-4(f)(2).
\6\ The effective date of the original proposed rule change is
October 11, 2005, and the effective date of Amendment No. 1 is
November 22, 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 November 22, 2005,
the date on which the Exchange submitted Amendment No. 1. See 15
U.S.C. 78s(b)(3)(C).
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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: (i) Amend
certain fees for DJX options, and (ii) establish fees for DXL options.
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
[OCTOBER 1, 2005] NOVEMBER 2, 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) (17):
I. CUSTOMER (2):
S&P 100, PREMIUM > or = $1...... $.35
S&P 100, PREMIUM < $1........... $.20
DJX, MNX, [and] NDX, RUT and RMN $.15
[RUT and RMN.................... $.15]
ETF and HOLDRs options.......... $.15
OTHER INDEXES, PREMIUM > OR = $1 $.45
OTHER INDEXES, PREMIUM < $1..... $.25
II. MARKET-MAKER AND DPM (10): [--EXCLUDING
DOW JONES PRODUCTS OTHER THAN DIA (10)$.24]
[MARKET-MAKER--DOW JONES PRODUCTS (except $.34]
DIA) (10).
DOW JONES PRODUCTS (except DIA $.34
and DJX).
OTHER INDEXES................... $.24
III. MEMBER FIRM PROPRIETARY: (11)
FACILITATION OF CUSTOMER ORDER, $.24
MNX and NDX.
FACILITATION OF CUSTOMER ORDER, $.20
OTHER INDEXES.
NON-FACILITATION ORDER.......... $.24
IV. BROKER-DEALER (EXCLUDING THE PRODUCTS
BELOW) INDEX CUSTOMER RATES.
DJX, ETF (except DIA), HOLDRS, $.45
RUT and RMN, PREMIUM > or = $1.
DJX, ETF (except DIA), HOLDRS, $.25
RUT and RMN, PREMIUM < $1.
DIA, MNX and NDX................ $.25
V. NON-MEMBER MARKET MAKER:
DIA and DJX..................... $.26
DXL............................. $.36
S&P 100 (including OEF), PREMIUM $.37
> or = $1.
S&P 100 (including OEF), PREMIUM $.22
< $1.
OTHER INDEXES, PREMIUM > or = $1 $.47
OTHER INDEXES, PREMIUM < $1..... $.27
VI.- IX. Unchanged.
2. MARKETING FEE (6)(16)..................... $.22
3. FLOOR BROKERAGE FEE (1)(5)(16)(17):
EQUITY & QQQQ CUSTOMER ORDER.... $.00
ALL OTHER EQUITY, QQQQ AND INDEX $.04
OPTIONS (8).
CROSSED ORDERS.................. $.02
4. RAES ACCESS FEE (RETAIL AUTOMATIC
EXECUTION SYSTEM) (1)(4)(16):
INDEX CUSTOMER TRANSACTIONS..... $.25
DOW JONES, ASSESSED ON THE
FIRST 25 CONTRACTS ONLY
NON-CUSTOMER TRANSACTIONS $.30
(ORIGIN CODE OTHER THAN ``C'')(8)(9).
FOOTNOTES: Unchanged.
5.-6. Unchanged.
7. INDEXES CUSTOMER ORDER BOOK OFFICIAL (OBO)
EXECUTION FEES(16)(17):
Rate Per Contract (1)
Accommodation Liquidation Or Cabinet $.10
Order.
All Other Orders......................... .25
(1) OEX--No charge for ``market'' and ``limit orders'' placed with
the OBO prior to the opening and executed during opening rotation.
Other Indexes--Same as above for index ``market orders'' (``limit
orders'' not included).
[[Page 72482]]
Remainder of Fees Schedule--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 Exchange 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 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
The Exchange proposes to amend its Fees Schedule to reduce and
eliminate certain fees for DJX options and to establish fees for DXL
options.
a. DJX Options Fees. The Exchange proposes to reduce customer and
non-member market-maker fees for transactions in DJX options and
eliminate the market-maker license fee surcharge applicable to
transactions in DJX options.
Currently, customer transaction fees for transactions in DJX
options are $.45 if the premium is greater than or equal to $1 and $.25
if the premium is less than $1. The Exchange proposes to reduce fees
for public customer transactions in DJX options to $.15 per contract.
Moreover, the transaction fees for non-member market-maker transactions
in DJX 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 Exchange proposes to reduce the non-member market
maker transaction fee for transactions in DJX options to $.26 per
contract, regardless of the premium.\7\
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\7\ See Amendment No. 1, supra note 3. According to CBOE, the
proposed change to the fees assessed to non-member market-makers for
transactions in DJX options will be implemented on December 1, 2005.
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In addition, the Exchange currently charges market-makers that
trade Dow Jones products, except options on DIAMONDS (``DIA''), 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.\8\ The Exchange proposes to eliminate the
$.10 license fee with respect to market-maker transactions in DJX
options.\9\
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\8\ See Securities Exchange Act Release No. 48223 (July 24,
2003), 68 FR 44978, 44979 (July 31, 2003).
\9\ The Commission notes that the Exchange currently charges
market-makers that trade Dow Jones products, except 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 DJX options will be $.24 per contract.
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The Exchange is reducing these fees in connection with DJX options
moving to CBOE's Hybrid Trading System.\10\ The proposed fees changes
are intended to make DJX options competitively priced with respect to
DIA options.
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\10\ Conversation between Jaime Galvan, Assistant Secretary,
CBOE and Sara Gillis, Attorney, Division of Market Regulation,
Commission on November 23, 2005.
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b. DXL Options. The Exchange launched trading in DXL options on
October 11, 2005.\11\ DXL options are options that are based on one-
tenth the value of the Dow Jones Industrial Average (``DJIA'').\12\ DXL
options will trade in open outcry. The Exchange proposes to amend its
Fees Schedule to establish fees for DXL options.
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\11\ Id.
\12\ DXL options are referred to as ``Jumbo-DJX'' options
because they are ten times larger than DJX options (DJX options are
based on 1/100th the value of the DJIA).
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Specifically, the Exchange proposes to assess public customers a
transaction fee for DXL options of $.45 if the premium is greater than
or equal to $1 and $.25 if the premium is less than $1. Market-maker
transaction fees for DXL options will be $.34, which consists of the
standard $.24 transaction fee and the $.10 license fee surcharge
assessed on certain Dow Jones index options as described above. Non-
member market-maker transaction fees for DXL options will be $.36,
regardless of the premium.\13\
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\13\ See Amendment No. 1, supra note 3. CBOE had originally
proposed to charge non-member market-makers a transaction fee for
transactions in DXL options of $.47 per contract if the premium was
greater than or equal to $1 and $.27 per contract if the premium was
less then $1. In Amendment No. 1, CBOE proposed to change the non-
member market-maker transaction fees for DXL options to $.36 per
contract, regardless of the premium. According to CBOE, the proposed
change to the fees assessed to non-member market-makers for
transactions in DXL options will be implemented on December 1, 2005.
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Member firm proprietary transaction fees for DXL options will be
$.20 for facilitation of customer orders and $.24 for non-facilitation
orders. Broker-dealer transaction fees for DXL options will be $.45 if
the premium is greater than or equal to $1 and $.25 if the premium is
less than $1.
The floor brokerage fee for DXL options will be $.04, and for
crossed orders, the floor brokerage fee will be $.02. The RAES Access
Fee will be $.25 for customer transactions (only the first 25 contracts
will be assessed) and $.30 for non-customer transactions. Order Book
Official (``OBO'') execution fees will be $.10 per contract for cabinet
and accommodation/liquidation trades and $.25 per contract for all
other orders.
2. Statutory Basis
The CBOE believes that the proposed rule change, as amended, is
consistent with Section 6(b) of the Act,\14\ in general, and furthers
the objectives of Section 6(b)(4) of the Act,\15\ 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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\14\ 15 U.S.C. 78f(b).
\15\ 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 that is not necessary or
appropriate in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
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 \16\ and
Rule 19b-4(f)(2) \17\ 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.\18\ 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.\19\
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\16\ 15 U.S.C. 78s(b)(3)(A)(ii).
\17\ 17 CFR 240.19b-4(f)(2).
\18\ See supra note 6.
\19\ Id.
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[[Page 72483]]
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-2005-84 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-2005-84. 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-2005-84 and should be
submitted on or before December 27, 2005.
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\20\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\20\
Jonathan G. Katz,
Secretary.
[FR Doc. E5-6831 Filed 12-2-05; 8:45 am]
BILLING CODE 8010-01-P
