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, 2605-2606 [E6-400]
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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).
sroberts on PROD1PC69 with NOTICES
2 17
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15:57 Jan 13, 2006
Jkt 208001
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
PO 00000
Frm 00094
Fmt 4703
Sfmt 4703
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
2606
Federal Register / Vol. 71, No. 10 / Tuesday, January 17, 2006 / Notices
which consists of four option classes—
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.
CBOE proposes to amend CBOE Rule
8.4(d) relating to the ‘‘A+’’ Tier to
include an additional option class in the
‘‘A+’’ Tier, namely options based on
The Dow Jones Industrial Average
(‘‘DJX’’). CBOE believes it is appropriate
to include this option class in this tier
based on its trading volume.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
section 6(b) of the Act,5 in general, and
furthers the objectives of Section
6(b)(5),6 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, 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.
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 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 neither solicited nor
received comments on the proposal.
IV. Solicitation of Comments
sroberts on PROD1PC69 with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange asserts that the
foregoing proposed rule change has
become effective upon filing pursuant to
section 19(b)(3)(A) of the Act 7 and Rule
19b–4(f)(6) thereunder 8 because it does
not:
(i) significantly affect the protection of
investors or the public interest;
(ii) impose any significant burden on
competition; and
(iii) become operative for 30 days
from the date on which it was filed, or
such shorter time as the Commission
may designate if consistent with the
5 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
7 15 U.S.C. 78s(b)(3)(A).
8 17 CFR 240.19b–4(f)(6).
6 15
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15:57 Jan 13, 2006
Jkt 208001
protection of investors and the public
interest; provided that the Exchange has
given the Commission written notice of
its intent to file the proposed rule
change at least five business days prior
to the filing date of the proposal or such
shorter time as designated by the
Commission.9
A proposed rule change filed under
Rule 19b–4(f)(6) normally may not
become operative prior to 30 days after
the date of filing.10 However, Rule 19b–
4(f)(6)(iii) 11 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the five days
prefiling requirement and waive the 30day pre-operative period, which would
make the rule change operative
immediately. The Commission believes
that waiving the five day prefiling
requirement and waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest.12 The proposed change to the
‘‘A+’’ Tier that is described in this
proposed rule change does not raise any
new, unique, or substantive issues from
those raised in previous filings with the
Commission.13 Accordingly, the
Commission designates that the
proposal become operative immediately.
At any time within 60 days of the
filing of the proposed rule change, 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.
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
9 As required under Rule 19b–4(f)(6)(iii), the
Exchange provided the Commission with notice of
its intent to file the proposed rule change at least
five business days prior to the date of filing of the
proposal.
10 17 CFR 240.19b–4(f)(6)(iii).
11 Id.
12 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
13 See Securities Exchange Act Release Nos.
51543 (April 14, 2005), 70 FR 20952 (April 22,
2005) (File No. SR–CBOE–2005–23) (establishing
the ‘‘A+’’ Tier); 52398 (September 8, 2005), 70 FR
54597 (September 15, 2005) (File No. SR–CBOE–
2005–74) (adding options on Diamonds to the ‘‘A+’’
Tier); and 52624 (October 18, 2005), 70 FR 61480
(October 24, 2005) (File No. SR–CBOE–2005–79)
(adding reduced value options on the Standard &
Poor’s 500 Stock Index to the ‘‘A+’’ Tier).
PO 00000
Frm 00095
Fmt 4703
Sfmt 4703
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–2006–02 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–9303.
All submissions should refer to File
Number SR–CBOE–2006–02. 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 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–2006–02 and should
be submitted on or before February 7,
2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.14
Nancy M. Morris,
Secretary.
[FR Doc. E6–400 Filed 1–13–06; 8:45 am]
BILLING CODE 8010–01–P
14 17
E:\FR\FM\17JAN1.SGM
CFR 200.30–3(a)(12).
17JAN1
]]>Agencies
[Federal Register Volume 71, Number 10 (Tuesday, January 17, 2006)]
[Notices]
[Pages 2605-2606]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-400]
-----------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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 Market-
Maker appointments. Below is the text of the proposed rule change.
Proposed 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
[[Page 2606]]
which consists of four option classes--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.
CBOE proposes to amend CBOE Rule 8.4(d) relating to the ``A+'' Tier
to include an additional option class in the ``A+'' Tier, namely
options based on The Dow Jones Industrial Average (``DJX''). CBOE
believes it is appropriate to include this option class in this tier
based on its trading volume.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with section 6(b) of the Act,\5\ in general, and furthers the
objectives of Section 6(b)(5),\6\ in particular, in that it is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, 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.
---------------------------------------------------------------------------
\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 Exchange 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
The Exchange neither solicited nor received comments on the
proposal.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange asserts that the foregoing proposed rule change has
become effective upon filing pursuant to section 19(b)(3)(A) of the Act
\7\ and Rule 19b-4(f)(6) thereunder \8\ because it does not:
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
(i) significantly affect the protection of investors or the public
interest;
(ii) impose any significant burden on competition; and
(iii) become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate if
consistent with the protection of investors and the public interest;
provided that the Exchange has given the Commission written notice of
its intent to file the proposed rule change at least five business days
prior to the filing date of the proposal or such shorter time as
designated by the Commission.\9\
---------------------------------------------------------------------------
\9\ As required under Rule 19b-4(f)(6)(iii), the Exchange
provided the Commission with notice of its intent to file the
proposed rule change at least five business days prior to the date
of filing of the proposal.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of filing.\10\
However, Rule 19b-4(f)(6)(iii) \11\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the five days prefiling requirement and waive the 30-
day pre-operative period, which would make the rule change operative
immediately. The Commission believes that waiving the five day
prefiling requirement and waiving the 30-day operative delay is
consistent with the protection of investors and the public
interest.\12\ The proposed change to the ``A+'' Tier that is described
in this proposed rule change does not raise any new, unique, or
substantive issues from those raised in previous filings with the
Commission.\13\ Accordingly, the Commission designates that the
proposal become operative immediately.
---------------------------------------------------------------------------
\10\ 17 CFR 240.19b-4(f)(6)(iii).
\11\ Id.
\12\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
\13\ See Securities Exchange Act Release Nos. 51543 (April 14,
2005), 70 FR 20952 (April 22, 2005) (File No. SR-CBOE-2005-23)
(establishing the ``A+'' Tier); 52398 (September 8, 2005), 70 FR
54597 (September 15, 2005) (File No. SR-CBOE-2005-74) (adding
options on Diamonds to the ``A+'' Tier); and 52624 (October 18,
2005), 70 FR 61480 (October 24, 2005) (File No. SR-CBOE-2005-79)
(adding reduced value options on the Standard & Poor's 500 Stock
Index to the ``A+'' Tier).
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, 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.
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-2006-02 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-9303.
All submissions should refer to File Number SR-CBOE-2006-02. 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 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-2006-02 and should be submitted on or before
February 7, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Nancy M. Morris,
Secretary.
[FR Doc. E6-400 Filed 1-13-06; 8:45 am]
BILLING CODE 8010-01-P
