Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Duration of CBOE Rule 6.45A(b) Pertaining to Orders Represented in Open Outcry, 15235-15237 [E6-4367]

Download as PDF Federal Register / Vol. 71, No. 58 / Monday, March 27, 2006 / Notices transactions resulting from dividend strategies, merger strategies, and short stock interest strategies, as defined in Footnote 13 of this Fees Schedule,7 8 or cabinet trades (see CBOE Rule 6.54— Accommodation Liquidations). CBOE states that it is not amending its marketing fee program in any other respects. 2. Statutory Basis The Exchange believes that the proposed rule change, as amended, is consistent with Section 6(b) of the Act,9 in general, and furthers the objectives of Section 6(b)(4) of the Act,10 in particular, in that it is designed to provide for the 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 The Exchange does not believe that the proposed rule change, as amended, will impose any inappropriate burden on competition 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 either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change, as amended, has been designated as a wwhite on PROD1PC65 with NOTICES 7 CBOE notes that, as set forth in Footnote 13 of its Fees Schedule, a dividend strategy is defined as transactions done to achieve a dividend arbitrage involving the purchase, sale, and exercise of in-themoney options of the same class, executed prior to the date on which the underlying stock goes exdividend. CBOE states that a merger strategy is defined as transactions done to achieve a merger arbitrage involving the purchase, sale, and exercise of options of the same class and expiration date, each executed prior to the date on which shareholders of record are required to elect their respective form of consideration, i.e., cash or stock. A short stock interest strategy is defined as transactions done to achieve a short stock interest arbitrage involving the purchase, sale, and exercise of in-the-money options of the same class. 8 CBOE notes that the fees currently assessed on transactions resulting from dividend strategies, merger strategies, and short stock interest strategies, as defined in Footnote 13 of its Fees Schedule, are part of a pilot program that will expire on September 1, 2006. See Securities Exchange Act Release No. 53412 (March 3, 2006), 71 FR 12752 (March 13, 2006) (SR–CBOE–2006–20). Telephone conversation between Patrick Sexton, Associate General Counsel, Exchange, and David Liu and Michou Nguyen, Attorneys, Division of Market Regulation, Commission, on March 7, 2006. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(4). VerDate Aug<31>2005 18:19 Mar 24, 2006 Jkt 208001 fee change pursuant to Section 19(b)(3)(A)(ii) of the Act 11 and Rule 19b–4(f)(2) 12 thereunder, because it establishes or changes a due, fee, or other charge imposed by the Exchange. Accordingly, the proposal, as amended, will take effect upon filing with the Commission. At any time within 60 days of the filing of such 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, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2006–23 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 20549–9303. All submissions should refer to File Number SR–CBOE–2006–23. 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 (http://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 15 U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). 13 The effective date of the original proposed rule change is March 1, 2006, and the effective date of Amendment No. 1 is March 16, 2006. For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change, as amended, the Commission considers the period to commence on March 16, 2006, the date on which the Exchange submitted Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C). 12 17 PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 15235 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–2006–23 and should be submitted on or before April 17, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.14 Nancy M. Morris, Secretary. [FR Doc. E6–4340 Filed 3–24–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53524; File No. SR–CBOE– 2006–22] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Duration of CBOE Rule 6.45A(b) Pertaining to Orders Represented in Open Outcry March 21, 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 March 8, 2006, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘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)(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 14 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 Exchange has asked the Commission to waive the 30-day operative delay required by Rule 19b–4(f)(6)(iii), 17 CFR 240.19b–4(f)(6)(iii). See discussion infra Section III. 1 15 \\ALPHA3\E\FR\FM\27MRN1.SGM 27MRN1 15236 Federal Register / Vol. 71, No. 58 / Monday, March 27, 2006 / Notices publishing this notice to solicit comments on the proposed rule change from interested persons. on March 14, 2006, the Exchange proposes to extend the effectiveness of the Rule through July 14, 2006.8 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change 2. Statutory Basis The CBOE proposes to extend the duration of CBOE Rule 6.45A(b) (the ‘‘Rule’’), which relates to the allocation of orders represented in open outcry in equity option classes designated by the Exchange to be traded on the CBOE Hybrid Trading System (‘‘Hybrid’’) through July 14, 2006. No other substantive changes are being made to the Rule. The text of the proposed rule change is available on the CBOE’s Internet Web site (http:// www.cboe.com), at the CBOE’s principal office, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the CBOE 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 those 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose wwhite on PROD1PC65 with NOTICES In March 2005, the Commission approved revisions to CBOE Rule 6.45A related to the introduction of Remote Market-Makers.6 Among other things, the Rule, pertaining to the allocation of orders represented in open outcry in equity options classes traded on Hybrid, was amended to clarify that only incrowd market participants would be eligible to participate in open outcry trade allocations. In addition, the Rule was amended to limit its duration until September 14, 2005, unless otherwise extended. The duration of the Rule was thereafter extended through December 14, 2005 and again through March 14, 2006.7 As the duration period expired 6 See Securities Exchange Act Release No. 51366 (March 14, 2005), 70 FR 13217 (March 18, 2005) (SR–CBOE–2004–75). 7 See Securities Exchange Act Release Nos. 52423 (September 14, 2005), 70 FR 55194 (September 20, 2005) (extending the duration of the Rule through VerDate Aug<31>2005 18:19 Mar 24, 2006 Jkt 208001 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 section 6(b)(5) 10 requirements 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 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 proposed rule change does not (1) significantly affect December 14, 2005) and 52957 (December 15, 2005), 70 FR 76085 (December 22, 2005) (extending the Rule through March 14, 2006). 8 In order to effect proprietary transactions on the floor of the Exchange, in addition to complying with the requirements of the Rule, members are also required to comply with the requirements of Section 11(a)(1) of the Act, 15 U.S.C. 78k(a)(1), or qualify for an exemption. Section 11(a)(1) restricts securities transactions of a member of any national securities exchange effected on that exchange for (i) the member’s own account, (ii) the account of a person associated with the member, or (iii) an account over which the member or a person associated with the member exercises discretion, unless a specific exemption is available. The Exchange issued a regulatory circular to members informing them of the applicability of these Section 11(a)(1) requirements when the duration of the Rule was extended until December 14, 2005 and again when the duration of the Rule was extended until March 14, 2006. See CBOE Regulatory Circulars RG05–103 (November 2, 2005) and RG06–001 (January 3, 2006). The Exchange represents that it expects to issue a similar regulatory circular to members reminding them of the applicability of the section 11(a)(1) requirements with respect to the proposed rule change. Telephone conversation between Jennifer Lamie, Managing Senior Attorney, CBOE, and Ronesha A. Butler, Special Counsel, Division of Market Regulation, Commission (March 14, 2006). 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 the protection of investors or the public interest; (2) impose any significant burden on competition; and (3) become operative for thirty 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, it has become effective pursuant to section 19(b)(3)(A) of the Act 11 and Rule 19b– 4(f)(6) 12 thereunder.13 A proposed rule change filed under Commission Rule 19b–4(f)(6) 14 normally does not become operative prior to thirty days after the date of filing. The CBOE requests that the Commission waive the 30-day operative delay, as specified in Rule 19b– 4(f)(6)(iii), and designate the proposed rule change to become operative immediately to allow the Exchange to continue to operate under the existing allocation parameters for orders represented in open outcry in Hybrid on an uninterrupted basis. The Commission hereby grants the request. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver will allow the CBOE to continue to operate under the Rule without interruption. For these reasons, the Commission designates the proposed rule change as effective and operative upon filing.15 At any time within 60 days of the filing of such 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 the 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: 11 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 13 Pursuant to Rule 19b–4(f)(6)(iii), the Exchange has given the Commission 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 on which the Exchange filed the proposed rule change. See 17 CFR 240.19b–4(f)(6)(iii). 14 17 CFR 240.19b–4(f)(6). 15 For the purposes only of waiving the operative date of this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 12 17 \\ALPHA3\E\FR\FM\27MRN1.SGM 27MRN1 Federal Register / Vol. 71, No. 58 / Monday, March 27, 2006 / Notices Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–CBOE–2006–22 on the subject line. Paper Comments SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53503; SR-DTC–2006–01] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Participant Exchange System March 16, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on January 19, 2006, The Depository Trust Company (‘‘DTC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule All submissions should refer to File change as described in Items I, II, and Number SR–CBOE–2006–22. This file III below, which Items have been number should be included on the prepared primarily by DTC. The subject line if e-mail is used. To help the Commission is publishing this notice to Commission process and review your solicit comments on the proposed rule comments more efficiently, please use change from interested persons. only one method. The Commission will post all comments on the Commission’s I. Self-Regulatory Organization’s Statement of the Terms of Substance of Internet Web site (http://www.sec.gov/ the Proposed Rule Change rules/sro.shtml). Copies of the Under the proposed rule change, DTC submission, all subsequent will disable its Participant Exchange amendments, all written statements (‘‘PEX’’) buy-in functionality for the with respect to the proposed rule National Securities Clearing change that are filed with the Corporation’s (‘‘NSCC’’) Continuous Net Commission, and all written Settlement (‘‘CNS’’) buy-ins on or about communications relating to the February 10, 2006. proposed rule change between the Commission and any person, other than II. Self-Regulatory Organization’s Statement of the Purpose of, and those that may be withheld from the Statutory Basis for, the Proposed Rule public in accordance with the Change provisions of 5 U.S.C. 552, will be available for inspection and copying in In its filing with the Commission, the Commission’s Public Reference DTC included statements concerning Room. Copies of such filing also will be the purpose of and basis for the available for inspection and copying at proposed rule change and discussed any comments it received on the proposed the principal office of the CBOE. All rule change. The text of these statements comments received will be posted may be examined at the places specified without change; the Commission does in Item IV below. DTC has prepared not edit personal identifying summaries, set forth in sections A, B, information from submissions. You and C below, of the most significant should submit only information that you wish to make available publicly. All aspects of such statements. submissions should refer to File A. Self-Regulatory Organization’s Number SR–CBOE–2006–22 and should Statement of the Purpose of, and be submitted on or before April 17, Statutory Basis for, the Proposed Rule 2006. Change Between 2003 and 2005, DTC made For the Commission, by the Division of several rule filings to establish and Market Regulation, pursuant to delegated enhance its SMART/Track service.2 In authority.16 rule filing SR–DTC–2005–19, DTC Nancy M. Morris, • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. Secretary. [FR Doc. E6–4367 Filed 3–24–06; 8:45 am] wwhite on PROD1PC65 with NOTICES BILLING CODE 8010–01–P 16 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 18:19 Mar 24, 2006 Jkt 208001 1 15 U.S.C. 78s(b)(1). Exchange Act Release Nos. 50029 (July 15, 2004), 69 FR 43870 (July 22, 2004) (Universal Hub, Stock Loan notification service); 50887 (Dec. 20, 2004), 69 FR 77802 (Dec. 28, 2004) (Corporate Action Liability Notification Service); 52104 (July 21, 2005), 70 FR 43730 (July 28, 2005) (SMART/Track for Agency Lending Disclosure); and 53032 (Dec. 28, 2005), 71 FR 1457 (Jan. 9, 2006) (SMART/Track for Buy-Ins) [SR–DTC–2005–19]. 2 Securities PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 15237 added the SMART/Track for Buy-Ins service that provides automated communication, warehousing, and tracking of various types of buy-in related notices.3 As part of that filing, DTC announced that the SMART/Track for Buy-Ins service would replace the buy-in functionality of DTC’s PEX platform. Under this proposed rule change, DTC will disable the PEX functionality for NSCC’s CNS buy-ins on or about February 10, 2006.4 Accordingly, DTC participants and NSCC CNS users must register for the SMART/Track for BuyIns service. DTC has been assisting its participants and CNS users in this regard. The PEX buy-in functionality for buyins other than NSCC CNS buy-ins (i.e. NYSE, AMEX, NASD, and NSCC Balance Order buy-ins) and for Municipal Securities Rulemaking Board closeouts will remain active until the final phase of SMART/Track for Buy-Ins is implemented, which is currently anticipated to happen in June 2006. When that happens, all PEX buy-in functionality will be disabled pursuant to a rule filing that DTC will file at that time.5 DTC and NSCC will notify their participants of the exact date of such termination through Important Notices. DTC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act 6 and the rules and regulations thereunder because it is consistent with DTC’s obligation to safeguard securities and funds in its custody or control. B. Self-Regulatory Organization’s Statement on Burden on Competition DTC does not believe that the proposed rule change will have any impact or impose any burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others DTC has not solicited or received written comments relating to the proposed rule change. DTC will notify the Commission of any written comments it receives. 3 Securities Exchange Act Release No. 53032 supra note 2. 4 DTC and NSCC have notified their respective participants of this action. DTC Important Notice B#9049–06 (Jan. 19, 2006) available online at http:// www.dtc.org/impNtc/ope/ope_9049-06.pdf; NSCC Important Notice A#6189 (Jan. 19, 2006), available online at http://www.nscc.com/impnot/notices/ notice2006/a6189.pdf. 5 PEX will remain a DTC service for other functions not related to buy-ins. 6 15 U.S.C. 78q–1. \\ALPHA3\E\FR\FM\27MRN1.SGM 27MRN1

Agencies

[Federal Register Volume 71, Number 58 (Monday, March 27, 2006)]
[Notices]
[Pages 15235-15237]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-4367]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53524; File No. SR-CBOE-2006-22]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Extend the Duration of CBOE Rule 6.45A(b) Pertaining to 
Orders Represented in Open Outcry

March 21, 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 March 8, 2006, the Chicago Board Options Exchange, 
Incorporated (``CBOE'' or ``Exchange'') filed with the Securities and 
Exchange Commission (the ``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)(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

[[Page 15236]]

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 Exchange has asked the Commission to waive the 30-day 
operative delay required by Rule 19b-4(f)(6)(iii), 17 CFR 240.19b-
4(f)(6)(iii). See discussion infra Section III.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The CBOE proposes to extend the duration of CBOE Rule 6.45A(b) (the 
``Rule''), which relates to the allocation of orders represented in 
open outcry in equity option classes designated by the Exchange to be 
traded on the CBOE Hybrid Trading System (``Hybrid'') through July 14, 
2006. No other substantive changes are being made to the Rule. The text 
of the proposed rule change is available on the CBOE's Internet Web 
site (http://www.cboe.com), at the CBOE's principal office, and at the 
Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the CBOE 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 those 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    In March 2005, the Commission approved revisions to CBOE Rule 6.45A 
related to the introduction of Remote Market-Makers.\6\ Among other 
things, the Rule, pertaining to the allocation of orders represented in 
open outcry in equity options classes traded on Hybrid, was amended to 
clarify that only in-crowd market participants would be eligible to 
participate in open outcry trade allocations. In addition, the Rule was 
amended to limit its duration until September 14, 2005, unless 
otherwise extended. The duration of the Rule was thereafter extended 
through December 14, 2005 and again through March 14, 2006.\7\ As the 
duration period expired on March 14, 2006, the Exchange proposes to 
extend the effectiveness of the Rule through July 14, 2006.\8\
---------------------------------------------------------------------------

    \6\  See Securities Exchange Act Release No. 51366 (March 14, 
2005), 70 FR 13217 (March 18, 2005) (SR-CBOE-2004-75).
    \7\ See Securities Exchange Act Release Nos. 52423 (September 
14, 2005), 70 FR 55194 (September 20, 2005) (extending the duration 
of the Rule through December 14, 2005) and 52957 (December 15, 
2005), 70 FR 76085 (December 22, 2005) (extending the Rule through 
March 14, 2006).
    \8\ In order to effect proprietary transactions on the floor of 
the Exchange, in addition to complying with the requirements of the 
Rule, members are also required to comply with the requirements of 
Section 11(a)(1) of the Act, 15 U.S.C. 78k(a)(1), or qualify for an 
exemption. Section 11(a)(1) restricts securities transactions of a 
member of any national securities exchange effected on that exchange 
for (i) the member's own account, (ii) the account of a person 
associated with the member, or (iii) an account over which the 
member or a person associated with the member exercises discretion, 
unless a specific exemption is available. The Exchange issued a 
regulatory circular to members informing them of the applicability 
of these Section 11(a)(1) requirements when the duration of the Rule 
was extended until December 14, 2005 and again when the duration of 
the Rule was extended until March 14, 2006. See CBOE Regulatory 
Circulars RG05-103 (November 2, 2005) and RG06-001 (January 3, 
2006). The Exchange represents that it expects to issue a similar 
regulatory circular to members reminding them of the applicability 
of the section 11(a)(1) requirements with respect to the proposed 
rule change. Telephone conversation between Jennifer Lamie, Managing 
Senior Attorney, CBOE, and Ronesha A. Butler, Special Counsel, 
Division of Market Regulation, Commission (March 14, 2006).
---------------------------------------------------------------------------

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 section 6(b)(5) \10\ 
requirements 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The CBOE does not believe that the proposed rule change will impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    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 proposed rule change does not (1) 
significantly affect the protection of investors or the public 
interest; (2) impose any significant burden on competition; and (3) 
become operative for thirty 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, it has become 
effective pursuant to section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6) \12\ thereunder.\13\
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ Pursuant to Rule 19b-4(f)(6)(iii), the Exchange has given 
the Commission 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 on which 
the Exchange filed the proposed rule change. See 17 CFR 240.19b-
4(f)(6)(iii).
---------------------------------------------------------------------------

    A proposed rule change filed under Commission Rule 19b-4(f)(6) \14\ 
normally does not become operative prior to thirty days after the date 
of filing. The CBOE requests that the Commission waive the 30-day 
operative delay, as specified in Rule 19b-4(f)(6)(iii), and designate 
the proposed rule change to become operative immediately to allow the 
Exchange to continue to operate under the existing allocation 
parameters for orders represented in open outcry in Hybrid on an 
uninterrupted basis. The Commission hereby grants the request. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because such waiver will allow the CBOE to continue to operate under 
the Rule without interruption. For these reasons, the Commission 
designates the proposed rule change as effective and operative upon 
filing.\15\
---------------------------------------------------------------------------

    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ For the purposes only of waiving the operative date of this 
proposal, 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 such 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 the 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:

[[Page 15237]]

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-CBOE-2006-22 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 20549-1090.

All submissions should refer to File Number SR-CBOE-2006-22. 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 (http://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-2006-22 and should be submitted on or before April 
17, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-4367 Filed 3-24-06; 8:45 am]
BILLING CODE 8010-01-P