Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change to Amend its Rules Governing the Hours of Trading in Equity Options and Narrow-Based Index Options, 75513-75514 [E5-7549]
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Federal Register / Vol. 70, No. 243 / Tuesday, December 20, 2005 / Notices
more spread strategies that are currently
recognized in the Exchange’s margin
rules is consistent with the
requirements of Section 6(b)(5) because
the amendments will allow the
Exchange to set levels of margin that
more precisely represent the actual net
risk of the option positions in the
account and enable customers to
implement these strategies more
efficiently.
these changes become effective February
1, 2006. The text of the proposed rule
change is available on the CBOE’s Web
site (https://www.cboe.com), at the
CBOE’s Office of the Secretary, and at
the Commission’s Public Reference
Room.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,9 that the
proposed rule change (File No. SR–
CBOE–2004–53), as amended, be, and it
hereby is, approved.
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.10
Jonathan G. Katz,
Secretary.
[FR Doc. E5–7522 Filed 12–19–05; 8:45 am]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52949; File No. SR–CBOE–
2005–104]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing of a
Proposed Rule Change to Amend its
Rules Governing the Hours of Trading
in Equity Options and Narrow-Based
Index Options
December 13, 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 December
6, 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. The Commission
is publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The CBOE proposes to amend its rules
governing the hours of trading in equity
options and narrow-based index
options. The Exchange proposes that
9 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
10 17
VerDate Aug<31>2005
19:23 Dec 19, 2005
Jkt 208001
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this rule change is to
amend the CBOE’s rules governing the
hours of trading in equity options and
narrow-based index options.
Specifically, the CBOE proposes to
amend its rules to change the close of
the normal trading hours in equity
options and in narrow-based index
options from 3:02 p.m. (Chicago time) to
3 p.m. (Chicago time). After the change,
the time of the close of trading in these
CBOE options will correspond to the
normal time set for the close of trading
on the primary exchanges listing the
stocks underlying the CBOE options.
The primary exchanges generally close
at 3 p.m. (Chicago time).
According to the Exchange, in 1997,
the CBOE decided to change its closing
time for equity options and narrowbased index options from 3:10 p.m. to
3:02 p.m. At the time, the CBOE
determined that there were reasons to
continue trading options for a limited
period of time after the close of trading
of the primary markets for the
underlying securities. Specifically, the
Exchange believed that the extended
period allowed for options traders to
respond to late reports of closing prices
over the consolidated tape. If the price
of a late reported trade on an underlying
security was substantially different from
the previous reported price, the
extended trading session gave options
traders the opportunity to bring options
quotes in line with the closing price of
the underlying security.
PO 00000
Frm 00069
Fmt 4703
Sfmt 4703
75513
However, because of improvements in
the processing and reporting of
transactions, the CBOE believes that
there are no longer significant delays in
the reporting of closing prices; and
therefore, a two minute session is no
longer needed to trade options after the
underlying securities close trading.
Additionally, the Exchange believes that
pricing aberrations can occur if an
option is traded when the underlying
stock is no longer trading, since there is
a close relationship in the price of the
underlying stock and the overlying
option. As a result, the CBOE believes
that it is difficult for the market to price
options accurately when the underlying
security is not trading.
As noted above, the Exchange also
proposes to change the closing time for
narrow-based indexes under CBOE Rule
24.6 because these indexes are subject to
the same pricing problems as options on
individual stocks. According to the
CBOE, a significant news announcement
on one component of a narrow-based
index could have a significant effect on
that index. However, the Exchange is
not at this time proposing to change the
closing time of 3:15 p.m. for broadbased index options because it does not
believe that a significant news
announcement by the issuer of one
component stock of a broad-based index
is likely to have a significant effect on
the price of that broad-based index.
Accordingly, the CBOE proposes to
amend its rules, including CBOE Rules
6.1, 6.2, 12.3, 24.6, and 24.16, in which
references are made to a 3:02 p.m.
closing time for equity options and
narrow-based index options.
The Exchange notes that if it were to
unilaterally modify its closing time, the
existence of dissimilar closing times
applicable to the different options
exchanges would likely lead to
confusion for options investors and
broker–dealers. Accordingly, in
September 2005, the Exchange
requestedfrom the Commission’s
Division of Market Regulation express
authorization to jointly discuss this
operational issue with the other options
exchanges who are participants in the
Options Price Reporting Authority,3 and
received such authorization.4 The CBOE
believes that all of the options
exchanges will make similar changes to
3 See letter from Joanne Moffic-Silver, Executive
Vice President, General Counsel & Corporate
Secretary, CBOE, to Robert L.D. Colby, Deputy
Director, Division of Market Regulation
(‘‘Division’’), Commission, dated September 16,
2005.
4 See letter from Robert L.D. Colby, Deputy
Director, Division, Commission, to Joanne MofficSilver, Executive Vice President, General Counsel
and Secretary, CBOE, dated September 16, 2005.
E:\FR\FM\20DEN1.SGM
20DEN1
75514
Federal Register / Vol. 70, No. 243 / Tuesday, December 20, 2005 / Notices
their rules to revise the closing time in
equity options and narrow-based index
options from 3:02 p.m. (Chicago time) to
3 p.m. (Chicago time). According to the
CBOE, the options exchanges
collectively have determined that they
would implement this new closing time
on February 1, 2006.
Electronic Comments
• Use the Commission’s Internet
comment form at (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–CBOE–2005–104 on the
subject line.
2. Statutory Basis
Paper Comments
The Exchange believes that the
proposed rule change is consistent with
the Section 6(b) of the Act 5 in general,
and furthers the objectives of Section
6(b)(5) of the Act 6 in particular because
it is designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, and, in general, to protect
investors and the public interest.
• 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–2005–104. 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
Section. 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–2005–104 and
should be submitted on or before
January 10, 2006.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The CBOE does not believe that the
proposed rule change 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
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 Exchange 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:
5 15
6 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
VerDate Aug<31>2005
19:23 Dec 19, 2005
Jkt 208001
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.7
Jonathan G. Katz,
Secretary.
[FR Doc. E5–7549 Filed 12–19–05; 8:45 am]
BILLING CODE 8010–01–P
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Amendment No. 1 clarifies that the central
element in determining whether a communication
is a solicitation is whether the communication
occurs with the purpose of obtaining or retaining
municipal securities business, and makes certain
other changes.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52948; File No. SR–MSRB–
2005–11]
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Notice of Filing of Proposed
Rule Change and Amendment No. 1
Thereto Relating to Definition of
Solicitation Under MSRB Rules G–37
and G–38
December 13, 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 June 10,
2005, the Municipal Securities
Rulemaking Board (‘‘MSRB’’ or
‘‘Board’’) filed with the Securities and
Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the MSRB. On December 7,
2005, the MSRB filed Amendment No.
1 to the proposed rule change.3 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 MSRB has filed with the
Commission a proposal consisting of an
interpretive notice relating to the
definition of solicitation for purposes of
Rules G–37 and G–38. The text of the
proposed rule change, as amended, is
available on the MSRB’s Web site
(https://www.msrb.org), at the MSRB’s
principal office, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
MSRB 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 MSRB has
prepared summaries, set forth in
7 17
1 15
PO 00000
Frm 00070
Fmt 4703
Sfmt 4703
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Amendment No. 1 clarifies that the central
element in determining whether a communication
is a solicitation is whether the communication
occurs with the purpose of obtaining or retaining
municipal securities business, and makes certain
other changes.
2 17
E:\FR\FM\20DEN1.SGM
20DEN1
]]>Agencies
[Federal Register Volume 70, Number 243 (Tuesday, December 20, 2005)]
[Notices]
[Pages 75513-75514]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-7549]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52949; File No. SR-CBOE-2005-104]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing of a Proposed Rule Change to Amend its
Rules Governing the Hours of Trading in Equity Options and Narrow-Based
Index Options
December 13, 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 December 6, 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.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The CBOE proposes to amend its rules governing the hours of trading
in equity options and narrow-based index options. The Exchange proposes
that these changes become effective February 1, 2006. The text of the
proposed rule change is available on the CBOE's Web site (https://
www.cboe.com), at the CBOE's Office of the Secretary, and at the
Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this rule change is to amend the CBOE's rules
governing the hours of trading in equity options and narrow-based index
options. Specifically, the CBOE proposes to amend its rules to change
the close of the normal trading hours in equity options and in narrow-
based index options from 3:02 p.m. (Chicago time) to 3 p.m. (Chicago
time). After the change, the time of the close of trading in these CBOE
options will correspond to the normal time set for the close of trading
on the primary exchanges listing the stocks underlying the CBOE
options. The primary exchanges generally close at 3 p.m. (Chicago
time).
According to the Exchange, in 1997, the CBOE decided to change its
closing time for equity options and narrow-based index options from
3:10 p.m. to 3:02 p.m. At the time, the CBOE determined that there were
reasons to continue trading options for a limited period of time after
the close of trading of the primary markets for the underlying
securities. Specifically, the Exchange believed that the extended
period allowed for options traders to respond to late reports of
closing prices over the consolidated tape. If the price of a late
reported trade on an underlying security was substantially different
from the previous reported price, the extended trading session gave
options traders the opportunity to bring options quotes in line with
the closing price of the underlying security.
However, because of improvements in the processing and reporting of
transactions, the CBOE believes that there are no longer significant
delays in the reporting of closing prices; and therefore, a two minute
session is no longer needed to trade options after the underlying
securities close trading. Additionally, the Exchange believes that
pricing aberrations can occur if an option is traded when the
underlying stock is no longer trading, since there is a close
relationship in the price of the underlying stock and the overlying
option. As a result, the CBOE believes that it is difficult for the
market to price options accurately when the underlying security is not
trading.
As noted above, the Exchange also proposes to change the closing
time for narrow-based indexes under CBOE Rule 24.6 because these
indexes are subject to the same pricing problems as options on
individual stocks. According to the CBOE, a significant news
announcement on one component of a narrow-based index could have a
significant effect on that index. However, the Exchange is not at this
time proposing to change the closing time of 3:15 p.m. for broad-based
index options because it does not believe that a significant news
announcement by the issuer of one component stock of a broad-based
index is likely to have a significant effect on the price of that
broad-based index.
Accordingly, the CBOE proposes to amend its rules, including CBOE
Rules 6.1, 6.2, 12.3, 24.6, and 24.16, in which references are made to
a 3:02 p.m. closing time for equity options and narrow-based index
options.
The Exchange notes that if it were to unilaterally modify its
closing time, the existence of dissimilar closing times applicable to
the different options exchanges would likely lead to confusion for
options investors and broker-dealers. Accordingly, in September 2005,
the Exchange requestedfrom the Commission's Division of Market
Regulation express authorization to jointly discuss this operational
issue with the other options exchanges who are participants in the
Options Price Reporting Authority,\3\ and received such
authorization.\4\ The CBOE believes that all of the options exchanges
will make similar changes to
[[Page 75514]]
their rules to revise the closing time in equity options and narrow-
based index options from 3:02 p.m. (Chicago time) to 3 p.m. (Chicago
time). According to the CBOE, the options exchanges collectively have
determined that they would implement this new closing time on February
1, 2006.
---------------------------------------------------------------------------
\3\ See letter from Joanne Moffic-Silver, Executive Vice
President, General Counsel & Corporate Secretary, CBOE, to Robert
L.D. Colby, Deputy Director, Division of Market Regulation
(``Division''), Commission, dated September 16, 2005.
\4\ See letter from Robert L.D. Colby, Deputy Director,
Division, Commission, to Joanne Moffic-Silver, Executive Vice
President, General Counsel and Secretary, CBOE, dated September 16,
2005.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the Section 6(b) of the Act \5\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \6\ in particular because it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, and, in general, to
protect investors and the public interest.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The CBOE does not believe that the proposed rule change 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
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 Exchange 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 at (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-CBOE-2005-104 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-2005-104. 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 Section. 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-2005-104 and should be submitted on or before
January 10, 2006.
---------------------------------------------------------------------------
\7\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\7\
Jonathan G. Katz,
Secretary.
[FR Doc. E5-7549 Filed 12-19-05; 8:45 am]
BILLING CODE 8010-01-P
