Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving Proposed Rule Change To Prohibit the Practice of Unbundling Orders To Maximize Rebates of Fees, 2605 [E6-397]
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Federal Register / Vol. 71, No. 10 / Tuesday, January 17, 2006 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53088; File No. SR–CBOE–
2005–92]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Order Approving
Proposed Rule Change To Prohibit the
Practice of Unbundling Orders To
Maximize Rebates of Fees
January 10, 2006.
I. Introduction
On November 7, 2005, the Chicago
Board Options Exchange, Incorporated
(‘‘CBOE’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) pursuant to section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
prohibit the practice of unbundling
orders to maximize rebates of fees. The
proposed rule change was published for
notice and comment in the Federal
Register on December 8, 2005.3 The
Commission received no comments on
the proposal. This order approves the
proposed rule change.
II. Description of the Proposal
CBOE proposed to adopt a new rule
to expressly prohibit its members from
dividing single orders into multiple
orders for the sole purpose of
maximizing market data rebates.
III. Discussion and Commission
Findings
The Commission has reviewed
carefully the proposed rule change and
finds that it is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities exchange,4
particularly section 6(b)(5) of the Act
which, among other things, requires that
the rules of a national securities
exchange be designed to promote just
and equitable principles of trade, to
foster cooperation and coordination
with persons engaged in regulating
securities transactions, to remove
impediments to perfect the mechanism
of a free and open market and a national
market system and, in general, to protect
investors and the public interest.5 The
Commission believes that the proposed
1 15
U.S.C. 78s(b)(l).
CFR 240. 19b–4.
3 See Securities Exchange Act Release No. 52872
(December 1, 2005), 70 FR 73043.
4 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
5 15 U.S.C. 78f(b)(5).
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rule change should help eliminate the
distortive practice of trade shredding,
and, therefore, promote just and
equitable principles of trade.
IV. Conclusion
It is therefore ordered, pursuant to
section 19(b)(2) of the Act,6 that the
proposed rule change (File No. SR–
CBOE–2005–92), be and hereby is,
approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.7
Nancy M. Morris,
Secretary.
[FR Doc. E6–397 Filed 1–13–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53072; File No. SR–CBOE–
2006–02]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend CBOE Rule 8.4
Relating to Remote Market-Maker
Appointments
January 6, 2006.
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 January 5,
2006, the Chicago Board Options
Exchange, Incorporated (‘‘Exchange’’ or
‘‘CBOE’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I and II below, which Items
have been prepared by the Exchange.
The Exchange filed the proposal
pursuant to section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6) thereunder,4
which renders the proposal effective
upon filing with the Commission. 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 CBOE
Rule 8.4 relating to Remote MarketMaker appointments. Below is the text
of the proposed rule change. Proposed
6 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.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
7 17
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2605
new language is italicized; proposed
deletions are in [brackets].
*
*
*
*
*
Rule 8.4—Remote Market-Makers
Rule 8.4. (a) No Change.
(b) No change.
(c) No change.
(d) Appointment of RMMs: An RMM
will have a Virtual Trading Crowd
(‘‘VTC’’) Appointment, which confers
the right to quote electronically (and not
in open outcry) an appropriate number
of products selected from ‘‘tiers’’ that
have been structured according to
trading volume statistics. Of the
products included in the Hybrid 2.0
Platform, Tier A will consist of the 20%
most actively-traded products over the
preceding three calendar months,
excluding ‘‘A+’’ tier products, Tier B
will consist of the next 20% most
actively-traded products, etc., through
Tier E, which will consist of the 20%
least actively-traded products. Tier
‘‘A+’’ will consist of options on
Standard & Poor’s Depositary Receipts,
options on the Nasdaq-100 Index
Tracking Stock, options on Diamonds,
[and] reduced value options on the
Standard & Poor’s 500 Stock Index, and
options based on The Dow Jones
Industrial Average.
*
*
*
*
*
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 CBOE Rule 8.4 relating to
Remote Market-Maker (‘‘RMM’’)
appointments. CBOE Rule 8.4 provides
that RMMs will have a Virtual Trading
Crowd (‘‘VTC’’) Appointment, which
confers the right to quote electronically
in a certain number of products selected
from various ‘‘tiers’’. There are five tiers
that are structured according to trading
volume statistics and an ‘‘A+’’ Tier
E:\FR\FM\17JAN1.SGM
17JAN1
]]>Agencies
[Federal Register Volume 71, Number 10 (Tuesday, January 17, 2006)]
[Notices]
[Page 2605]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-397]
[[Page 2605]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53088; File No. SR-CBOE-2005-92]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Order Approving Proposed Rule Change To Prohibit the
Practice of Unbundling Orders To Maximize Rebates of Fees
January 10, 2006.
I. Introduction
On November 7, 2005, the Chicago Board Options Exchange,
Incorporated (``CBOE'' or ``Exchange'') filed with the Securities and
Exchange Commission (``Commission'') pursuant to section 19(b)(1) of
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to prohibit the practice of
unbundling orders to maximize rebates of fees. The proposed rule change
was published for notice and comment in the Federal Register on
December 8, 2005.\3\ The Commission received no comments on the
proposal. This order approves the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(l).
\2\ 17 CFR 240. 19b-4.
\3\ See Securities Exchange Act Release No. 52872 (December 1,
2005), 70 FR 73043.
---------------------------------------------------------------------------
II. Description of the Proposal
CBOE proposed to adopt a new rule to expressly prohibit its members
from dividing single orders into multiple orders for the sole purpose
of maximizing market data rebates.
III. Discussion and Commission Findings
The Commission has reviewed carefully the proposed rule change and
finds that it is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
exchange,\4\ particularly section 6(b)(5) of the Act which, among other
things, requires that the rules of a national securities exchange be
designed to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating
securities transactions, to remove impediments to perfect the mechanism
of a free and open market and a national market system and, in general,
to protect investors and the public interest.\5\ The Commission
believes that the proposed rule change should help eliminate the
distortive practice of trade shredding, and, therefore, promote just
and equitable principles of trade.
---------------------------------------------------------------------------
\4\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\6\ that the proposed rule change (File No. SR-CBOE-2005-92), be
and hereby is, approved.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\7\
---------------------------------------------------------------------------
\7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Nancy M. Morris,
Secretary.
[FR Doc. E6-397 Filed 1-13-06; 8:45 am]
BILLING CODE 8010-01-P
