Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend CBOE Membership Rules Relating to Membership Sale Process, 8324-8326 [E6-2201]
Download as PDF
<![CDATA[
8324
Federal Register / Vol. 71, No. 32 / Thursday, February 16, 2006 / Notices
dsatterwhite on PROD1PC65 with NOTICES
options.33 The Commission believes
that the proposed position and exercise
limits should serve to minimize
potential manipulation concerns.
The CBOE represents that it has
adequate surveillance procedures for
broad-based index options and that it
intends to apply its existing surveillance
procedures for index options to monitor
trading in broad-based index options
listed pursuant to CBOE Rule 24.2(f). In
addition, because CBOE Rule 24.2(f)
requires that each component of an
index be an ‘‘NMS stock,’’ as defined in
Rule 600 of Regulation NMS under the
Act,34 each index component must be
listed on a registered national securities
exchange or Nasdaq. Accordingly, the
CBOE will have access to information
concerning trading activity in the
component securities of an underlying
index through the Intermarket
Surveillance Group (‘‘ISG’’).35 CBOE
Rule 24.2(f) also provides that non-U.S.
index components that are not subject to
a comprehensive surveillance sharing
agreement between the CBOE and the
primary market(s) trading the index
components may comprise no more
than 20% of the weight of the index.36
The Commission believes that these
requirements will help to ensure that
the CBOE has the ability to monitor
trading in broad-based index options
listed pursuant to CBOE Rule 24.2(f)
and in the component securities of the
underlying indexes.
The Commission believes that the
requirements in CBOE Rule 24.2(f)
regarding, among other things, the
minimum market capitalization, trading
volume, and relative weightings of an
underlying index’s component stocks
are designed to ensure that the markets
for the index’s component stocks are
adequately capitalized and sufficiently
liquid, and that no one stock dominates
the index. In addition, CBOE Rule
24.2(f) requires that the underlying
index be ‘‘broad-based,’’ as defined in
33 See CBOE Rule 24.4(a). Under CBOE Rule 24.5,
the exercise limits for index option contracts are
equivalent to the position limits prescribed for
option contracts with the nearest expiration date in
CBOE Rule 24.4 or 24.4A.
34 17 CFR 242.600.
35 The ISG was formed on July 14, 1983, to,
among other things, coordinate more effectively
surveillance and investigative information sharing
arrangements in the stock and options markets. All
of the registered national securities exchanges and
the National Association of Securities Dealers, Inc.,
are members of the ISG. In addition, futures
exchanges and non-U.S. exchanges and associations
are affiliate members of the ISG.
36 However, such non-U.S. index components, as
‘‘NMS stocks,’’ would be registered under Section
12 of the Act, 15 U.S.C. 78l, and listed and traded
on a national securities exchange or Nasdaq, where
there is last sale reporting.
VerDate Aug<31>2005
15:56 Feb 15, 2006
Jkt 208001
CBOE Rule 24.1(i)(1).37 The
Commission believes that these
requirements minimize the potential for
manipulating the underlying index.
The Commission believes that the
requirement in CBOE Rule 24.2(f) that
the current index value be widely
disseminated at least once every 15
seconds by OPRA, CTA/CQ, NIDS, or by
one or more major market data vendors
during the time an index option trades
on the CBOE should provide
transparency with respect to current
index values and contribute to the
transparency of the market for broadbased index options. In addition, the
Commission believes, as it has noted in
other contexts, that the requirement in
CBOE Rule 24.2(f) that an index option
be settled based on the opening prices
of the index’s component securities,
rather than on closing prices, could help
to reduce the potential impact of
expiring index options on the market for
the index’s component securities.38
The Exchange has requested
accelerated approval of the proposed
rule change. The Commission finds
good cause for approving the proposed
rule change, as amended, prior to the
30th day after the date of publication of
the notice of filing in the Federal
Register. The proposal implements
listing and maintenance standards and
position and exercise limits for broadbased index options substantially the
same as those recently approved for the
International Securities Exchange,
which were subject to the full public
comment period, with no comments
received.39 The Commission does not
believe that the Exchange’s proposal
raises any novel regulatory issues.
Therefore, the Commission finds good
cause, consistent with Section 19(b)(2)
of the Act,40 to approve the proposed
rule change, as amended, on an
accelerated basis.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,41 that the
proposed rule change (SR–CBOE–2005–
37 See
supra note 6.
e.g., Securities Exchange Act Release No.
30944 (July 21, 1992), 57 FR 33376 (July 28, 1992)
(order approving a CBOE proposal to establish
opening price settlement for S&P 500 Index
options).
39 See Securities Exchange Act Release No. 52578
(October 7, 2005), 70 FR 60590 (October 18, 2005).
See also Securities Exchange Act Release No. 52781
(November 16, 2005), 70 FR 70898 (November 23,
2005) (order approving on an accelerated basis
generic broad-based index option listing standards
for the American Stock Exchange).
40 15 U.S.C. 78s(b)(2).
41 Id.
38 See,
PO 00000
Frm 00054
Fmt 4703
Sfmt 4703
59), as amended, is hereby approved on
an accelerated basis.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.42
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6–2197 Filed 2–15–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53260; File No. SR–CBOE–
2006–04]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend CBOE
Membership Rules Relating to
Membership Sale Process
February 9, 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 9,
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 as a
‘‘non-controversial’’ proposed rule
change pursuant to Section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b–4(f)(6) thereunder,4 which renders
it effective upon filing with the
Commission.5 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
CBOE proposes to revise Exchange
membership rules related to the
membership sale process. The text of
the proposed rule change is available on
CBOE’s Web site, https://www.cboe.com,
at CBOE’s principal office, and at the
Commission’s Public Reference Room.
42 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
5 The CBOE provided the Commission with
written notice of its intent to file the proposed rule
change on December 7, 2005. CBOE asked the
Commission to waive the 30-day operative delay.
See Section 19(b)(3)(A) of the Act, and Rule 19b–
4(f)(6)(iii) thereunder. 15 U.S.C. 78s(b)(1), 17 CFR
240.19b–4(f)(6)(iii).
1 15
E:\FR\FM\16FEN1.SGM
16FEN1
Federal Register / Vol. 71, No. 32 / Thursday, February 16, 2006 / Notices
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 parts of such
statements.
dsatterwhite on PROD1PC65 with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange is revising CBOE Rules
3.13(b) and 3.14(a) to implement new
provisions that would take effect in the
event of a ‘‘crossed’’ membership
market. Specifically, the proposed rule
change would provide that (i) when a
bid is submitted that exceeds the best
offer posted on the Exchange, a seat sale
transaction will occur at the best offer
posted on the Exchange, and (ii) when
an offer is submitted that is less than the
best bid posted on the Exchange, a seat
sale transaction will occur at the best
bid posted on the Exchange. For
example, if the seat market is a $500,000
bid and a $525,000 offer, and
subsequently a properly submitted bid
is received by the CBOE Membership
Department for $530,000, a seat sale
transaction will occur at the posted offer
of $525,000. Likewise, if the seat market
is a $500,000 bid and a $525,000 offer,
and thereafter a properly submitted offer
is received by the CBOE Membership
Department for $495,000, a seat sale
transaction will occur at the posted bid
of $500,000. The Exchange expects this
rule would be used rarely since the
Exchange provides prompt updates of
all properly submitted bids and offers
on the Exchange Bulletin Board, the
Exchange ‘‘seat market’’ telephone
hotline, and the Exchange’s Web site.
However, it is possible for a bid or offer
to be submitted that ‘‘crosses’’ the
current membership market. Current
CBOE Rules 3.13 and 3.14 only
explicitly address what occurs in the
event that the bid and offer are matched
with the same price. The Exchange
believes that this rule filing will
improve those rules by explicitly
addressing what shall occur when a bid
is submitted that exceeds the best offer
or an offer is submitted that is less than
the best bid.
VerDate Aug<31>2005
15:56 Feb 15, 2006
Jkt 208001
The proposed rule change also makes
clear that bids and offers must be
submitted in writing during seat market
hours.6 The purpose of this proposed
rule change is to ensure that all bids and
offers are received by the Membership
Department and processed in an orderly
manner. The Exchange will issue an
information circular to the Exchange’s
membership to inform them of the hours
that will constitute seat market hours.
The Exchange notes that the proposed
rule change was reviewed and endorsed
by the Exchange’s Membership
Committee, which is comprised of a
cross-section of Exchange members and
representatives of member
organizations.
2. Statutory Basis
The Exchange states that the proposed
rule change is designed to improve the
operation of the CBOE seat market
thereby benefiting both the Exchange
and its members. Therefore, the
Exchange believes that the proposed
rule change is consistent with the
requirements of Section 6(b) of the Act,7
in general, and furthers the objectives of
Section 6(b)(5),8 in particular, in that it
is designed to promote just and
equitable principles of trade, to prevent
fraudulent and manipulative acts 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.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing rule 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 protection of investors and the
public interest, provided that the
6 Seat market hours, as specified on the forms for
submitting a bid or offer for membership purchase,
are currently 7 a.m. to 4 p.m. Central time.
7 15 U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00055
Fmt 4703
Sfmt 4703
8325
Exchange has given the Commission
written notice of its intent to file the
proposed rule change at least five
business days prior to the date of filing
of the proposed rule change or such
shorter time as designated by the
Commission,9 the proposed rule change
has become effective pursuant to
Section 19(b)(3)(A) of the Act 10 and
Rule 19b–4(f)(6) thereunder.11
A proposed rule change filed under
Rule 19b–4(f)(6) under the Act 12
normally may not become operative
prior to 30 days after the date of filing.
However, Rule 19b–4(f)(6)(iii) 13 permits
the Commission to designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The CBOE has requested that
the Commission waive the 30-day
operative delay, which would make the
rule change operative immediately. The
Commission believes that such waiver is
consistent with the protection of
investors and the public interest, for it
will allow the CBOE to clarify CBOE
Rules 3.13 and 3.14 to address what
shall occur with respect to trading in
CBOE memberships in the event of a
‘‘crossed’’ membership market. In
addition, the proposed rule change
clarifies that bids and offers for CBOE
memberships must be submitted in
writing during CBOE’s seat market
hours. For these reasons, the
Commission designates that the
proposal become operative
immediately.14
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.15
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:
9 As required under Rule 19b–4(f)(6)(iii) under
the Act, the Exchange provided the Commission
with written 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 15 U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(6).
12 17 CFR 240.19b–4(f)(6).
13 17 CFR 240.19b–4(f)(6)(iii).
14 For purposes only of waiving the 30-day preoperative period, the Commission has considered
the proposed rule’s impact on efficiency,
competition, and capital formation. 15 U.S.C. 78c(f).
15 See 15 U.S.C. 78s(b)(3)(C).
E:\FR\FM\16FEN1.SGM
16FEN1
8326
Federal Register / Vol. 71, No. 32 / Thursday, February 16, 2006 / Notices
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–2006–04 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53269; File No. SR–NASD–
2006–018]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change and Amendment No. 1
Thereto To Modify the Routing
Sequence for Directed Cross Orders
February 10, 2006.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
All submissions should refer to File
notice is hereby given that on February
Number SR–CBOE–2006–04. This file
2, 2006, the National Association of
number should be included on the
subject line if e-mail is used. To help the Securities Dealers, Inc. (’’NASD’’),
through its subsidiary, The Nasdaq
Commission process and review your
Stock Market, Inc. (‘‘Nasdaq’’),
comments more efficiently, please use
submitted to the Securities and
only one method. The Commission will
Exchange Commission (‘‘Commission’’)
post all comments on the Commission’s the proposed rule change as described
Internet Web site (https://www.sec.gov/
in Items I and II below, which Items
rules/sro.shtml). Copies of the
have been prepared by Nasdaq. Nasdaq
submission, all subsequent
filed the proposed rule change pursuant
amendments, all written statements
to Section 19(b)(3)(A) of the Act3 which
with respect to the proposed rule
renders it effective upon filing with the
change that are filed with the
Commission. On February 9, 2006,
Commission, and all written
Nasdaq filed Amendment No. 1 to the
communications relating to the
proposed rule change.4 The Commission
proposed rule change between the
is publishing this notice to solicit
Commission and any person, other than comments on the proposed rule change,
as amended, from interested persons.
those that may be withheld from the
public in accordance with the
I. Self-Regulatory Organization’s
provisions of 5 U.S.C. 552, will be
Statement of the Terms of Substance of
available for inspection and copying in
the Proposed Rule Change
the Commission’s Public Reference
The proposed rule change is intended
Room. Copies of the filing also will be
to explicitly add INET to the routing
available for inspection and copying at
sequence for Directed Cross Orders in
the principal office of the CBOE. All
exchange-listed securities directed to
comments received will be posted
the NYSE and to allow subscribers to
without change; the Commission does
determine whether they wish to route to
not edit personal identifying
market centers in addition to Brut,
information from submissions. You
Nasdaq, and INET prior to the NYSE
should submit only information that
when the NYSE is the final destination
you wish to make available publicly. All
of the order.5 The text of the proposed
submissions should refer to File
rule change is below. Proposed new
Number SR–CBOE–2006–04 and should
language is in italics; deletions are in
be submitted on or before March 9,
[brackets].6
2006.
*
*
*
*
*
dsatterwhite on PROD1PC65 with NOTICES
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.16
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6–2201 Filed 2–15–06; 8:45 am]
BILLING CODE 8010–01–P
16 17
CFR 200.30–3(a)(12).
VerDate Aug<31>2005
15:56 Feb 15, 2006
Jkt 208001
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 Amendment No. 1 made clarifying changes to
the rule text and Section I of this notice.
5 See Amendment No. 1.
6 Changes are marked to the rule text that appears
in the electronic NASD Manual found at
www.nasd.com. Prior to the date when The
NASDAQ Stock Market LLC (‘‘NASDAQ LLC’’)
commences operations, NASDAQ LLC will file a
conforming change to the rules of NASDAQ LLC
approved in Securities Exchange Act Release No.
53128 (January 13, 2006).
2 17
PO 00000
Frm 00056
Fmt 4703
Sfmt 4703
4903. Order Entry Parameters
(a) To Brut Orders—No Change
(b) Brut Cross Orders—
(1) No Change
(A)–(C) No Change
(D) A Brut Cross Order may also be
designated as a Directed Cross Order. A
Directed Cross Order is an order that is
entered into the System during market
hours and is executable against
marketable contra-side orders in the
System. The order also is eligible for
routing to other market centers. After
being processed in the Brut System and
exhausting available liquidity in the
Brut System, the order is automatically
routed by Brut to the specific market
center selected by the entering party for
potential execution. Any portion of the
Directed Cross Order that remains
unfilled after being routed to the
selected market center will be returned
to the entering party. For Directed Cross
Orders in exchange-listed securities
directed to the New York Stock
Exchange if, after being processed in the
Brut System and exhausting available
liquidity in the Brut System, such
orders will be automatically routed to
the Nasdaq Market Center and INET for
potential execution and thereafter, if
instructed by the entering party, to other
market centers that provide automated
electronic executions before being sent
to the New York Stock Exchange.
Directed Cross Orders in exchangelisted securities directed to the New
York Stock Exchange shall remain at the
New York Stock E[e]xchange7 until
executed or cancelled by the entering
party.
(1)(E)–(F) No Change
(c)–(f) No Change
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
Nasdaq 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. Nasdaq has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
7 See
E:\FR\FM\16FEN1.SGM
Amendment No. 1.
16FEN1
]]>Agencies
[Federal Register Volume 71, Number 32 (Thursday, February 16, 2006)]
[Notices]
[Pages 8324-8326]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-2201]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53260; File No. SR-CBOE-2006-04]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Amend CBOE Membership Rules Relating to Membership Sale
Process
February 9, 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 9, 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 as a ``non-controversial'' proposed
rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and
Rule 19b-4(f)(6) thereunder,\4\ which renders it effective upon filing
with the Commission.\5\ 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)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
\5\ The CBOE provided the Commission with written notice of its
intent to file the proposed rule change on December 7, 2005. CBOE
asked the Commission to waive the 30-day operative delay. See
Section 19(b)(3)(A) of the Act, and Rule 19b-4(f)(6)(iii)
thereunder. 15 U.S.C. 78s(b)(1), 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
CBOE proposes to revise Exchange membership rules related to the
membership sale process. The text of the proposed rule change is
available on CBOE's Web site, https://www.cboe.com, at CBOE's principal
office, and at the Commission's Public Reference Room.
[[Page 8325]]
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 parts 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 is revising CBOE Rules 3.13(b) and 3.14(a) to
implement new provisions that would take effect in the event of a
``crossed'' membership market. Specifically, the proposed rule change
would provide that (i) when a bid is submitted that exceeds the best
offer posted on the Exchange, a seat sale transaction will occur at the
best offer posted on the Exchange, and (ii) when an offer is submitted
that is less than the best bid posted on the Exchange, a seat sale
transaction will occur at the best bid posted on the Exchange. For
example, if the seat market is a $500,000 bid and a $525,000 offer, and
subsequently a properly submitted bid is received by the CBOE
Membership Department for $530,000, a seat sale transaction will occur
at the posted offer of $525,000. Likewise, if the seat market is a
$500,000 bid and a $525,000 offer, and thereafter a properly submitted
offer is received by the CBOE Membership Department for $495,000, a
seat sale transaction will occur at the posted bid of $500,000. The
Exchange expects this rule would be used rarely since the Exchange
provides prompt updates of all properly submitted bids and offers on
the Exchange Bulletin Board, the Exchange ``seat market'' telephone
hotline, and the Exchange's Web site. However, it is possible for a bid
or offer to be submitted that ``crosses'' the current membership
market. Current CBOE Rules 3.13 and 3.14 only explicitly address what
occurs in the event that the bid and offer are matched with the same
price. The Exchange believes that this rule filing will improve those
rules by explicitly addressing what shall occur when a bid is submitted
that exceeds the best offer or an offer is submitted that is less than
the best bid.
The proposed rule change also makes clear that bids and offers must
be submitted in writing during seat market hours.\6\ The purpose of
this proposed rule change is to ensure that all bids and offers are
received by the Membership Department and processed in an orderly
manner. The Exchange will issue an information circular to the
Exchange's membership to inform them of the hours that will constitute
seat market hours.
---------------------------------------------------------------------------
\6\ Seat market hours, as specified on the forms for submitting
a bid or offer for membership purchase, are currently 7 a.m. to 4
p.m. Central time.
---------------------------------------------------------------------------
The Exchange notes that the proposed rule change was reviewed and
endorsed by the Exchange's Membership Committee, which is comprised of
a cross-section of Exchange members and representatives of member
organizations.
2. Statutory Basis
The Exchange states that the proposed rule change is designed to
improve the operation of the CBOE seat market thereby benefiting both
the Exchange and its members. Therefore, the Exchange believes that the
proposed rule change is consistent with the requirements of Section
6(b) of the Act,\7\ in general, and furthers the objectives of Section
6(b)(5),\8\ in particular, in that it is designed to promote just and
equitable principles of trade, to prevent fraudulent and manipulative
acts and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 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
Because the foregoing rule 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 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 date of filing of the
proposed rule change or such shorter time as designated by the
Commission,\9\ the proposed rule change has become effective pursuant
to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6)
thereunder.\11\
---------------------------------------------------------------------------
\9\ As required under Rule 19b-4(f)(6)(iii) under the Act, the
Exchange provided the Commission with written 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\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) under the Act
\12\ normally may not become operative prior to 30 days after the date
of filing. However, Rule 19b-4(f)(6)(iii) \13\ permits the Commission
to designate a shorter time if such action is consistent with the
protection of investors and the public interest. The CBOE has requested
that the Commission waive the 30-day operative delay, which would make
the rule change operative immediately. The Commission believes that
such waiver is consistent with the protection of investors and the
public interest, for it will allow the CBOE to clarify CBOE Rules 3.13
and 3.14 to address what shall occur with respect to trading in CBOE
memberships in the event of a ``crossed'' membership market. In
addition, the proposed rule change clarifies that bids and offers for
CBOE memberships must be submitted in writing during CBOE's seat market
hours. For these reasons, the Commission designates that the proposal
become operative immediately.\14\
---------------------------------------------------------------------------
\12\ 17 CFR 240.19b-4(f)(6).
\13\ 17 CFR 240.19b-4(f)(6)(iii).
\14\ For purposes only of waiving the 30-day pre-operative
period, the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
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.\15\
---------------------------------------------------------------------------
\15\ See 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------
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:
[[Page 8326]]
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-2006-04 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-CBOE-2006-04. 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 the 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-2006-04 and should be submitted on or before March 9, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------
\16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-2201 Filed 2-15-06; 8:45 am]
BILLING CODE 8010-01-P
