Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Its Rule 8.4 To Extend for an Additional Year a Pilot Program Relating to RMM Multiple Aggregation Units, 12753-12755 [E6-3496]
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Federal Register / Vol. 71, No. 48 / Monday, March 13, 2006 / Notices
of the Act,5 in general, and Section
6(b)(4),6 in particular, in that it provides
for an equitable allocation of reasonable
dues, fees, and other charges among its
members and other persons using its
facilities.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CBOE does not believe that 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
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act 7 and
subparagraph (f)(2) of Rule 19b–4
thereunder 8 because it establishes or
changes a due, fee, or other charge. 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 rulecomments@sec.gov. Please include File
Number SR–CBOE–2006–20 on the
subject line.
wwhite on PROD1PC61 with NOTICES
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
7 15 U.S.C. 78s(b)(3)(A)(ii).
8 17 CFR 240.19b–4(f)(2).
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–CBOE–2006–20. 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 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–2006–20 and should
be submitted on or before April 3, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.9
Nancy M. Morris,
Secretary.
[FR Doc. E6–3495 Filed 3–10–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53414; File No. SR–CBOE–
2006–25]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending Its Rule 8.4 To
Extend for an Additional Year a Pilot
Program Relating to RMM Multiple
Aggregation Units
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
5 15
6 15
VerDate Aug<31>2005
17:58 Mar 10, 2006
9 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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PO 00000
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notice is hereby given that on March 2,
2006, 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 and II
below, which Items have been prepared
by the CBOE. The Exchange filed the
proposal as a ‘‘non-controversial’’
proposed rule change 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.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
The CBOE proposes to amend CBOE
Rule 8.4 to extend for an additional year
a pilot program relating to Remote
Market Makers (‘‘RMMs’’) multiple
aggregation units.6 The text of the
proposed rule change is below.
Proposed additions are in italics and
proposed deletions are in [brackets]:
Rule 8.3—Appointment of MarketMakers
Rule 8.3. This Rule governs the
appointment of Market-Makers other
than Remote Market-Makers. Rule 8.4
governs the appointment of Remote
Market-Makers.
(a) No change.
(b) No change.
(c) Absent an exemption by the
appropriate Market Performance
Committee, an appointment of a MarketMaker confers the right to quote as
described below:
(i) No change.
(ii) No change.
(iii) Additionally, a Market-Maker that
is submitting electronic quotations in
his/her appointed Hybrid and Hybrid
2.0 Classes can submit electronic
quotations in either two (2) additional
Hybrid 2.0 Classes in Tier A or Tier B
that are not located in the MarketMaker’s appointed trading station, or
five (5) additional Hybrid 2.0 Classes in
Tiers C, D, or E that are not located in
the Market-Maker’s appointed trading
station. (For purposes of this paragraph,
3 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
5 As required by Rule 19b–4(f)(6)(iii), 17 CFR
240.19b–4(f)(6)(iii), the CBOE submitted written
notice of its intent to file the proposed rule change,
along with a brief description and text of the
proposed rule change, at least five business days
prior to the date of filing.
6 The Commission notes that the Exchange is also
amending a cross-reference to this program
contained in CBOE Rule 8.3.
4 17
March 3, 2006.
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Federal Register / Vol. 71, No. 48 / Monday, March 13, 2006 / Notices
the Exchange is using the Tiers set forth
in Rule 8.4 that have been structured for
purposes of RMM appointments.) A
Market-Maker cannot be affiliated with
an e-DPM or RMM that holds an
appointment in any of these additional
Hybrid 2.0 Classes. Pursuant to a Pilot
Program that expires on September 14,
2006, a Market-Maker can be affiliated
with another Market-Maker (‘‘Affiliated
Market-Maker’’) who holds an
appointment in one of these additional
Hybrid 2.0 Classes, provided the
Market-Maker cannot submit electronic
quotations in these additional Hybrid
2.0 Classes if the Affiliated MarketMaker is submitting electronic
quotations from outside its appointed
trading station. Pursuant to a Pilot
Program that expires on March 14, 2007
[2006], if both Market-Makers operate as
multiple aggregation units under the
criteria set forth in Rule 8.4(c)(ii), the
preceding restriction does not apply.
(d) No Change.
*
*
*
*
*
Rule 8.4—Remote Market-Makers
Rule 8.4. (a) No Change.
(b) No change.
(c) Affiliation Limitations: Except as
provided in subparagraphs (i) or (ii), an
RMM may not have an appointment as
an RMM in any class in which it or its
member organization serves as DPM, eDPM, RMM, or Market-Maker on CBOE.
(i) No change.
(ii) A CBOE Member or Member Firm
may have, as part of a pilot program
until March 14, 2007 [2006], multiple
aggregation units operating as separate
RMMs within the same class provided:
(A) No change.
(B) No change.
(C) No change.
(d) No change.
(e) No change.
(f) No change.
*
*
*
*
*
wwhite on PROD1PC61 with 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
CBOE included statements concerning
the purpose of, and basis for, the
proposed rule change and discussed any
comments it received on the proposal.
The text of these statements may be
examined at the places specified in Item
IV below. The CBOE has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
VerDate Aug<31>2005
17:58 Mar 10, 2006
Jkt 208001
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
extend for an additional year, until
March 14, 2007, an existing Pilot
Program which allows a CBOE member
or member firm to have multiple
aggregation units operating as separate
RMMs within the same class, provided
they satisfy certain criteria set forth in
CBOE Rule 8.4(c)(ii)(A)–(C).
In March 2005, CBOE amended its
rules to establish a new membership
status called RMM, who have the ability
to submit quotes to the CBOE from a
location outside of the physical trading
station of the RMM’s appointed class.7
In connection with the adoption of these
rules, CBOE also adopted provisions in
its rules relating to RMM affiliation
limitations. Specifically, CBOE Rule
8.4(c) provides that except as otherwise
provided, an RMM may not have an
appointment as an RMM in any class in
which it or its member organization
serves as DPM, e-DPM, RMM, or
Market-Maker on CBOE. One exception
that was approved on a pilot basis was
the ability of a CBOE member or
member firm to have multiple
aggregation units operating as separate
RMMs within the same class, provided
certain specific criteria were complied
with.8 These criteria were set forth in
subparagraphs (A) though (C) of CBOE
Rule 8.4(c)(ii), and were based on the
criteria contained in Regulation SHO
which was approved by the Commission
in July 2004.
CBOE’s believes that the Pilot
Program has been successful, in that it
allows a CBOE member or member firm
to have multiple aggregation units
operating as separate RMMs within the
same class, provided they comply with
certain specific criteria. CBOE has not
experienced any negative effects with
respect to the Pilot Program. Thus,
CBOE believes it would be appropriate
and beneficial to extend this Pilot
Program for an additional year, until
March 14, 2007.
7 See Securities Exchange Act Release No. 51366
(March 14, 2005), 70 FR 13217 (March 18, 2005)
(approving SR–CBOE–2004–75).
8 A second exception, also adopted on a pilot
basis for a period ending September 14, 2006 and
contained in CBOE Rule 8.4(c)(i), permits a member
or member firm operating as an RMM in a class to
have one Market-Maker affiliated with the RMM
organization trading in open outcry in any specific
class allocated to the RMM, provided such MarketMaker trades on a separate membership.
PO 00000
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Fmt 4703
Sfmt 4703
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the Act
and the rules and regulations under the
Act applicable to a national securities
exchange and, in particular, the
requirements of Section 6(b) of the Act.9
Specifically, the Exchange believes the
proposed rule change is consistent with
the requirements of Section 6(b)(5) of
the Act,10 which requires that the rules
of an exchange be 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 CBOE believes that the proposed
rule change will not impose any burden
on competition that is not necessary or
appropriate in furtherance of the
purposes of the Act, as amended.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The CBOE has neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change: (1) Does not significantly affect
the protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) by its terms does not become
operative for 30 days after the date of
this filing, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest, the proposed rule
change has become effective pursuant to
Section 19(b)(3)(A) of the Act and Rule
19b–4(f)(6) thereunder.
Normally, a proposed rule change
filed under Rule 19b–4(f)(6) does not
become operative for 30 days after the
date of filing. However, Rule 19b–
4(f)(6)(iii) 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 asked the Commission
to waive the 30-day operative delay.
Allowing a CBOE member or member
firm to have multiple aggregation units
operating as separate RMMs within the
same class, subject certain specific
requirements, does not raise any new or
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
10 15
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Federal Register / Vol. 71, No. 48 / Monday, March 13, 2006 / Notices
unique issues.11 The Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest because the continuation of this
practice may enhance competition and
liquidity.12 For this reason, the
Commission designates that the
proposal has become effective and
operative immediately upon filing with
the Commission. 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.13
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–CBOE–2006–25 on the
subject line.
wwhite on PROD1PC61 with NOTICES
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–2006–25. 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
11 See
supra, at n.7.
purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
13 See Rule 19b–4(f)(6)(iii), 17 CFR 240.19b–
4(f)(6)(iii).
12 For
VerDate Aug<31>2005
17:58 Mar 10, 2006
Jkt 208001
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–2006–25 and should
be submitted on or before April 3, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.14
Nancy M. Morris,
Secretary.
[FR Doc. E6–3496 Filed 3–10–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53431; File No. SR–CBOE–
2004–65]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Inc.; Notice of Filing of Proposed Rule
Change and Amendments Nos. 1 and
2 Thereto Relating to Restrictions on
Arbitrators Serving on CBOE’s
Arbitration Committee
March 7, 2006.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’)1 and Rule 19b–4 thereunder,2
notice is hereby given that on October
14, 2004, the Chicago Board Options
Exchange, Inc. (‘‘CBOE’’ or the
‘‘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 CBOE. On December 13, 2005 and
February 15, 2006, CBOE filed
Amendments Nos. 1 and 2, respectively,
to the proposed rule change.3 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Amendment No. 1 replaces the original filing in
its entirety. Amendment No. 2 replaces the rule text
in the original filing and Amendment No. 1 in their
entirety. Also, Amendment No. 2 supplements the
‘‘Purpose’’ section of Amendment No. 1 with
additional explanation as to the bases for certain
proposed rule amendments.
1 15
PO 00000
Frm 00085
Fmt 4703
Sfmt 4703
12755
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Exchange rules relating to arbitrations.
Below is the text of the proposed rule
change. Proposed new language is in
italics; proposed deletions are in
brackets.
*
*
*
*
*
Chapter XVIII
Rule 18.10—Designation of Number of
Arbitrators
Rule 18.10. (a)–(b) No change.
(c) Arbitrator Restrictions. The
following restrictions shall apply to
persons who serve on the Arbitration
Committee.
(i) No member of the Arbitration
Committee shall represent a party as
counsel in any dispute, claim or
controversy submitted for CBOE
arbitration (‘‘CBOE Arbitration’’) while
that member is serving on the
Arbitration Committee and for a period
of six months after the date on which
that member ceases being a member of
the Arbitration Committee and,
(ii) if a Committee member is
appointed as an arbitrator in a pending
CBOE Arbitration (‘‘Pending CBOE
Arbitration’’) and subsequently ceases
being a member of the Committee, but
continues to serve as an arbitrator in the
Pending CBOE Arbitration, that person
cannot represent a party as counsel in
a separate CBOE Arbitration until he or
she has ceased serving as an arbitrator
in the Pending CBOE Arbitration.
*
*
*
*
*
Rule 18.13—Disclosures Required of
Arbitrators
Rule 18.13. (a)–(c) No Change.
(d) Removal by the Director.
(1) The Director of Arbitration may
remove an arbitrator based on
information that is required to be
disclosed pursuant to this Rule.
(2) After [Prior to] the beginning of (A)
the first pre-hearing conference or (B)
the first hearing session, whichever is
earlier, the Director of Arbitration may
remove an arbitrator based on
information not known to the parties
when the arbitrator was selected.
[disclosed pursuant to this section. The
Director of Arbitration shall also inform
the parties of any information disclosed
pursuant to this section, if the arbitrator
who disclosed the information is not
removed.]
(3) The Director of Arbitration will
grant a party’s request to disqualify an
arbitrator if it is reasonable to infer,
based on information known at the time
of the request, that the arbitrator is
E:\FR\FM\13MRN1.SGM
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]]>Agencies
[Federal Register Volume 71, Number 48 (Monday, March 13, 2006)]
[Notices]
[Pages 12753-12755]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-3496]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53414; File No. SR-CBOE-2006-25]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Amending Its Rule 8.4 To Extend for an Additional Year a
Pilot Program Relating to RMM Multiple Aggregation Units
March 3, 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 March 2, 2006, 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 and II below, which Items have been prepared by the CBOE. The
Exchange filed the proposal as a ``non-controversial'' proposed rule
change 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.\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).
\4\ 17 CFR 240.19b-4(f)(6).
\5\ As required by Rule 19b-4(f)(6)(iii), 17 CFR 240.19b-
4(f)(6)(iii), the CBOE submitted written notice of its intent to
file the proposed rule change, along with a brief description and
text of the proposed rule change, at least five business days prior
to the date of filing.
---------------------------------------------------------------------------
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 to extend for an
additional year a pilot program relating to Remote Market Makers
(``RMMs'') multiple aggregation units.\6\ The text of the proposed rule
change is below. Proposed additions are in italics and proposed
deletions are in [brackets]:
---------------------------------------------------------------------------
\6\ The Commission notes that the Exchange is also amending a
cross-reference to this program contained in CBOE Rule 8.3.
---------------------------------------------------------------------------
Rule 8.3--Appointment of Market-Makers
Rule 8.3. This Rule governs the appointment of Market-Makers other
than Remote Market-Makers. Rule 8.4 governs the appointment of Remote
Market-Makers.
(a) No change.
(b) No change.
(c) Absent an exemption by the appropriate Market Performance
Committee, an appointment of a Market-Maker confers the right to quote
as described below:
(i) No change.
(ii) No change.
(iii) Additionally, a Market-Maker that is submitting electronic
quotations in his/her appointed Hybrid and Hybrid 2.0 Classes can
submit electronic quotations in either two (2) additional Hybrid 2.0
Classes in Tier A or Tier B that are not located in the Market-Maker's
appointed trading station, or five (5) additional Hybrid 2.0 Classes in
Tiers C, D, or E that are not located in the Market-Maker's appointed
trading station. (For purposes of this paragraph,
[[Page 12754]]
the Exchange is using the Tiers set forth in Rule 8.4 that have been
structured for purposes of RMM appointments.) A Market-Maker cannot be
affiliated with an e-DPM or RMM that holds an appointment in any of
these additional Hybrid 2.0 Classes. Pursuant to a Pilot Program that
expires on September 14, 2006, a Market-Maker can be affiliated with
another Market-Maker (``Affiliated Market-Maker'') who holds an
appointment in one of these additional Hybrid 2.0 Classes, provided the
Market-Maker cannot submit electronic quotations in these additional
Hybrid 2.0 Classes if the Affiliated Market-Maker is submitting
electronic quotations from outside its appointed trading station.
Pursuant to a Pilot Program that expires on March 14, 2007 [2006], if
both Market-Makers operate as multiple aggregation units under the
criteria set forth in Rule 8.4(c)(ii), the preceding restriction does
not apply.
(d) No Change.
* * * * *
Rule 8.4--Remote Market-Makers
Rule 8.4. (a) No Change.
(b) No change.
(c) Affiliation Limitations: Except as provided in subparagraphs
(i) or (ii), an RMM may not have an appointment as an RMM in any class
in which it or its member organization serves as DPM, e-DPM, RMM, or
Market-Maker on CBOE.
(i) No change.
(ii) A CBOE Member or Member Firm may have, as part of a pilot
program until March 14, 2007 [2006], multiple aggregation units
operating as separate RMMs within the same class provided:
(A) No change.
(B) No change.
(C) No change.
(d) No change.
(e) No change.
(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, the CBOE included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposal. The text of these
statements may be examined at the places specified in Item IV below.
The CBOE has prepared summaries, set forth in Sections A, B, and C
below, of the most significant aspects of such statements.
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 extend for an additional
year, until March 14, 2007, an existing Pilot Program which allows a
CBOE member or member firm to have multiple aggregation units operating
as separate RMMs within the same class, provided they satisfy certain
criteria set forth in CBOE Rule 8.4(c)(ii)(A)-(C).
In March 2005, CBOE amended its rules to establish a new membership
status called RMM, who have the ability to submit quotes to the CBOE
from a location outside of the physical trading station of the RMM's
appointed class.\7\ In connection with the adoption of these rules,
CBOE also adopted provisions in its rules relating to RMM affiliation
limitations. Specifically, CBOE Rule 8.4(c) provides that except as
otherwise provided, an RMM may not have an appointment as an RMM in any
class in which it or its member organization serves as DPM, e-DPM, RMM,
or Market-Maker on CBOE. One exception that was approved on a pilot
basis was the ability of a CBOE member or member firm to have multiple
aggregation units operating as separate RMMs within the same class,
provided certain specific criteria were complied with.\8\ These
criteria were set forth in subparagraphs (A) though (C) of CBOE Rule
8.4(c)(ii), and were based on the criteria contained in Regulation SHO
which was approved by the Commission in July 2004.
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\7\ See Securities Exchange Act Release No. 51366 (March 14,
2005), 70 FR 13217 (March 18, 2005) (approving SR-CBOE-2004-75).
\8\ A second exception, also adopted on a pilot basis for a
period ending September 14, 2006 and contained in CBOE Rule
8.4(c)(i), permits a member or member firm operating as an RMM in a
class to have one Market-Maker affiliated with the RMM organization
trading in open outcry in any specific class allocated to the RMM,
provided such Market-Maker trades on a separate membership.
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CBOE's believes that the Pilot Program has been successful, in that
it allows a CBOE member or member firm to have multiple aggregation
units operating as separate RMMs within the same class, provided they
comply with certain specific criteria. CBOE has not experienced any
negative effects with respect to the Pilot Program. Thus, CBOE believes
it would be appropriate and beneficial to extend this Pilot Program for
an additional year, until March 14, 2007.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations under the Act applicable to a
national securities exchange and, in particular, the requirements of
Section 6(b) of the Act.\9\ Specifically, the Exchange believes the
proposed rule change is consistent with the requirements of Section
6(b)(5) of the Act,\10\ which requires that the rules of an exchange be
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.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The CBOE believes that the proposed rule change will not impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The CBOE has neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) by its terms does not become operative for 30 days after the
date of this filing, or such shorter time as the Commission may
designate if consistent with the protection of investors and the public
interest, the proposed rule change has become effective pursuant to
Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.
Normally, a proposed rule change filed under Rule 19b-4(f)(6) does
not become operative for 30 days after the date of filing. However,
Rule 19b-4(f)(6)(iii) 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 asked the Commission to waive the 30-day operative
delay. Allowing a CBOE member or member firm to have multiple
aggregation units operating as separate RMMs within the same class,
subject certain specific requirements, does not raise any new or
[[Page 12755]]
unique issues.\11\ The Commission believes that waiving the 30-day
operative delay is consistent with the protection of investors and the
public interest because the continuation of this practice may enhance
competition and liquidity.\12\ For this reason, the Commission
designates that the proposal has become effective and operative
immediately upon filing with the Commission. 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.\13\
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\11\ See supra, at n.7.
\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. 15 U.S.C. 78c(f).
\13\ See Rule 19b-4(f)(6)(iii), 17 CFR 240.19b-4(f)(6)(iii).
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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-2006-25 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-2006-25. 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-2006-25
and should be submitted on or before April 3, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
Nancy M. Morris,
Secretary.
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\14\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E6-3496 Filed 3-10-06; 8:45 am]
BILLING CODE 8010-01-P
