Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of Proposed Rule Change To Prohibit the Practice of Unbundling Orders to Maximize Rebates of Fees, 73043-73044 [E5-7071]
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Federal Register / Vol. 70, No. 235 / Thursday, December 8, 2005 / Notices
73043
Following the fee waiver period, the
Exchange will begin assessing the fees
set forth above. The Exchange has
decided to waive all XSP fees to
promote the launch of the XSP product.
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:
SECURITIES AND EXCHANGE
COMMISSION
2. Statutory Basis
Electronic Comments
The Exchange believes that the
proposed rule change, as amended, is
consistent with Section 6(b) of the Act,7
in general, and furthers the objectives of
Section 6(b)(4) of the Act,8 in particular,
in that it provides for the equitable
allocation of reasonable dues, fees, and
other charges among CBOE’s members
and other persons using its facilities.
• 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–2005–88 on the
subject line.
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing of
Proposed Rule Change To Prohibit the
Practice of Unbundling Orders to
Maximize Rebates of Fees
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange 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
The Exchange has neither solicited
nor received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The proposed rule change, as
amended, has become effective upon
filing pursuant to Section 19(b)(3)(A) of
the Act 9 and subparagraph (f)(2) of Rule
19b–4 thereunder,10 because it
establishes or changes a due, fee, or
other charge imposed by the CBOE. 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.11
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
7 15
U.S.C. 78s(b)(3)(A).
U.S.C. 78f(b)(4).
9 15 U.S.C. 78s(b)(3)(A).
10 17 CFR 240.19b–4(f)(2).
11 The effective date of the original proposed rule
change is October 25, 2005 and the effective date
of the amendment is December 1, 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 December 1, 2005, the
date on which the Exchange submitted Amendment
No. 1. See 15 U.S.C. 78s(b)(3)(C).
8 15
VerDate Aug<31>2005
16:29 Dec 07, 2005
Jkt 208001
[Release No. 34–52872; File No. SR–CBOE–
2005–92]
December 1, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934, as
amended, (‘‘Act’’) 1 and Rule 19b–4
Paper Comments
thereunder,2 notice is hereby given that
• Send paper comments in triplicate
on November 7, 2005, the Chicago
to Jonathan G. Katz, Secretary,
Board Options Exchange, Incorporated
Securities and Exchange Commission,
(‘‘CBOE’’ or ‘‘Exchange’’) filed with the
Station Place, 100 F Street, NE.,
Securities and Exchange Commission
Washington, DC 20549–9303.
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
All submissions should refer to File
III below, which Items have been
Number SR–CBOE–2005–88. This file
prepared by the Exchange. The
number should be included on the
subject line if e-mail is used. To help the Commission is publishing this notice to
solicit comments on the proposed rule
Commission process and review your
change from interested persons.
comments more efficiently, please use
only one method. The Commission will I. Self-Regulatory Organization’s
post all comments on the Commission’s Statement of the Terms of Substance of
Internet Web site (https://www.sec.gov/
the Proposed Rule Change
rules/sro.shtml). Copies of the
CBOE proposes to adopt a new rule to
submission, all subsequent
prohibit the practice of unbundling
amendments, all written statements
orders in order to maximize rebates of
with respect to the proposed rule
fees. The text of the proposed rule
change that are filed with the
change appears below. Additions are in
Commission, and all written
italics.
communications relating to the
*
*
*
*
*
proposed rule change between the
Commission and any person, other than
Rule 4.23—Unbundling of Orders to
those that may be withheld from the
Maximize Rebates of Fees
public in accordance with the
Rule 4.23. No member shall divide an
provisions of 5 U.S.C. 552, will be
order into multiple smaller orders for
available for inspection and copying in
the primary purpose of maximizing
the Commission’s Public Reference
Room. Copies of such filing also will be rebates of fees resulting from the
execution of such orders, or any other
available for inspection and copying at
similar payment of value to the member.
the principal offices of CBOE. All
comments received will be posted
*
*
*
*
*
without change; the Commission does
II. Self-Regulatory Organization’s
not edit personal identifying
Statement of the Purpose of, and
information from submissions. You
Statutory Basis for, the Proposed Rule
should submit only information that
you wish to make available publicly. All Change
In its filing with the Commission, the
submissions should refer to File
Number SR–CBOE–2005–88 and should CBOE included statements concerning
be submitted on or before December 29, the purpose of, and basis for, the
proposed rule change and discussed any
2005.
comments it received on the proposed
For the Commission, by the Division of
rule change. The text of these statements
Market Regulation, pursuant to delegated
may be examined at the places specified
12
authority.
in Item IV below. The CBOE has
Jonathan G. Katz,
prepared summaries, set forth in
Secretary.
Sections A, B, and C below, of the most
[FR Doc. E5–7067 Filed 12–7–05; 8:45 am]
significant aspects of such statements.
BILLING CODE 8010–01–P
1 15
12 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00067
Fmt 4703
Sfmt 4703
2 17
E:\FR\FM\08DEN1.SGM
U.S.C. 78s(b)(l).
CFR 240.19b–4.
08DEN1
73044
Federal Register / Vol. 70, No. 235 / Thursday, December 8, 2005 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this rule change is to
amend CBOE rules to expressly prohibit
the practice of tape shredding, i.e., the
practice of splitting large orders into
multiple smaller orders for the purpose
of maximizing market data revenues.
The Commission has requested that all
U.S. self-regulatory organizations
implement rule changes to inhibit the
practice of tape shredding.
CBOE agrees that the practice of ‘‘tape
shredding’’ is a distortive practice. For
options trading, CBOE’s members do not
have any incentive to engage in this
practice because CBOE does not share
its market data revenue in options with
its members. With regard to its limited
stock trading, until very recently CBOE
did not share market data revenue with
its members.3 Nonetheless, because
CBOE shares the Commission’s
concerns about this dubious practice,
CBOE agrees that it would be
appropriate for CBOE to amend its rules
to expressly prohibit its members from
dividing single orders into multiple
orders for the sole purpose of
maximizing market data rebates.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the Act,4
in general, and furthers the objectives of
Section 6(b)(5) of the Act,5 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 regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to,
and perfect the mechanism of, a free and
open market and a national market
system, and in general, to protect
investors and the public interest.
3 CBOE recently adopted a revenue sharing
program with its Designated Primary MarketMakers and Market-Makers for trades in Tape B
securities, of which CBOE trades a very small
number, upon the launch of CBOE’s new stock
trading platform. Because CBOE’s revenue sharing
plan does not propose to share revenue with order
flow providers, only with CBOE’s DPMs and
Market-Makers in these Tape B securities, CBOE
does not believe that its plan promotes the breaking
up of single orders into multiple orders to maximize
market data rebates.
4 15 U.S.C. 78f(b).
5 15 U.S.C. 78f(b)(5).
VerDate Aug<31>2005
16:29 Dec 07, 2005
Jkt 208001
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange believes that the
proposed rule change will impose no
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has neither solicited
nor received comments 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 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–2005–92 on the
subject line.
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room. Copies of such filing also will be
available for inspection and copying at
the principal offices of 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–2005–92 and should
be submitted on or before December 29,
2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.6
Jonathan G. Katz,
Secretary.
[FR Doc. E5–7071 Filed 12–7–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52868; File No. SR–OCC–
2005–18]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change Relating to
Margin Deposits for a Customers’ Lien
Account
December 1, 2005
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’,1 notice is hereby given that on
November 9, 2005, The Options
Clearing Corporation (‘‘OCC’’) filed with
Paper Comments
the Securities and Exchange
• Send paper comments in triplicate
Commission (‘‘Commission’’) the
to Jonathan G. Katz, Secretary,
proposed rule change described in Items
Securities and Exchange Commission,
I, II, and III below, which items have
Station Place, 100 F Street, NE.,
been prepared primarily by OCC. OCC
Washington, DC 20549–9303.
filed the proposed rule change pursuant
All submissions should refer to File
to Section 19(b)(3)(A)(i) of the Act 2 and
Number SR–CBOE–2005–92. This file
Rule 19b–4(f)(1) thereunder 3 so that the
number should be included on the
proposal was effective upon filing with
subject line if e-mail is used. To help the the Commission. The Commission is
Commission process and review your
publishing this notice to solicit
comments more efficiently, please use
only one method. The Commission will
6 17 CFR 200.30–3(a)(12).
post all comments on the Commission’s
1 15 U.S.C. 78s(b)(1).
2 15 U.S.C. 78s(b)(3)(A)(i).
Internet Web site (https://www.sec.gov/
3 17 U.S.C. 240.19b–4(f)(1).
rules/sro.shtml). Copies of the
PO 00000
Frm 00068
Fmt 4703
Sfmt 4703
E:\FR\FM\08DEN1.SGM
08DEN1
]]>Agencies
[Federal Register Volume 70, Number 235 (Thursday, December 8, 2005)]
[Notices]
[Pages 73043-73044]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-7071]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52872; File No. SR-CBOE-2005-92]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing of Proposed Rule Change To Prohibit the
Practice of Unbundling Orders to Maximize Rebates of Fees
December 1, 2005.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of
1934, as amended, (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is
hereby given that on November 7, 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 Commission is publishing this notice
to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(l).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
CBOE proposes to adopt a new rule to prohibit the practice of
unbundling orders in order to maximize rebates of fees. The text of the
proposed rule change appears below. Additions are in italics.
* * * * *
Rule 4.23--Unbundling of Orders to Maximize Rebates of Fees
Rule 4.23. No member shall divide an order into multiple smaller
orders for the primary purpose of maximizing rebates of fees resulting
from the execution of such orders, or any other similar payment of
value to the member.
* * * * *
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 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 CBOE has prepared summaries, set forth in Sections
A, B, and C below, of the most significant aspects of such statements.
[[Page 73044]]
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this rule change is to amend CBOE rules to expressly
prohibit the practice of tape shredding, i.e., the practice of
splitting large orders into multiple smaller orders for the purpose of
maximizing market data revenues. The Commission has requested that all
U.S. self-regulatory organizations implement rule changes to inhibit
the practice of tape shredding.
CBOE agrees that the practice of ``tape shredding'' is a distortive
practice. For options trading, CBOE's members do not have any incentive
to engage in this practice because CBOE does not share its market data
revenue in options with its members. With regard to its limited stock
trading, until very recently CBOE did not share market data revenue
with its members.\3\ Nonetheless, because CBOE shares the Commission's
concerns about this dubious practice, CBOE agrees that it would be
appropriate for CBOE to amend its rules to expressly prohibit its
members from dividing single orders into multiple orders for the sole
purpose of maximizing market data rebates.
---------------------------------------------------------------------------
\3\ CBOE recently adopted a revenue sharing program with its
Designated Primary Market-Makers and Market-Makers for trades in
Tape B securities, of which CBOE trades a very small number, upon
the launch of CBOE's new stock trading platform. Because CBOE's
revenue sharing plan does not propose to share revenue with order
flow providers, only with CBOE's DPMs and Market-Makers in these
Tape B securities, CBOE does not believe that its plan promotes the
breaking up of single orders into multiple orders to maximize market
data rebates.
---------------------------------------------------------------------------
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\4\ in general, and furthers the objectives of Section 6(b)(5) of
the Act,\5\ 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 regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to, and perfect the mechanism of, a
free and open market and a national market system, and in general, to
protect investors and the public interest.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that the proposed rule change will impose no
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange has neither solicited nor received comments 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 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-2005-92 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-9303.
All submissions should refer to File Number SR-CBOE-2005-92. 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 such
filing also will be available for inspection and copying at the
principal offices of 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-2005-92 and should be submitted on or before December 29, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\6\
---------------------------------------------------------------------------
\6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Jonathan G. Katz,
Secretary.
[FR Doc. E5-7071 Filed 12-7-05; 8:45 am]
BILLING CODE 8010-01-P
