Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto To Reflect Committee Revisions, 15778-15780 [E6-4517]

Download as PDF 15778 Federal Register / Vol. 71, No. 60 / Wednesday, March 29, 2006 / Notices securities, currencies or commodities of any ETF issued by the sponsor with which such specialist, member organization or any member, officer, employee or approved person therein has entered into a business transaction. hsrobinson on PROD1PC68 with NOTICES AMEX Company Guide Relationship With Specialist Procedures, Rules and Regulations Sec. 910. Introduction and (a) through (c) No change. (d) Exchange Rules Governing Specialist’s Activities—In addition to certain provisions of the Securities Exchange Act of 1934, a number of Exchange regulations place clearly defined limits on a specialist’s activities. An awareness of both the intent and spirit of Exchange rules, and the responsibilities the Exchange places on the specialist, will help ensure that contacts between company officials and the specialist are conducted within the framework provided for above. With respect to any security in which a specialist is registered, Exchange rules prohibit specialists (and, with respect to paragraphs iii through ix, the member firm or member corporation of which the specialist is a member) from: (i) through (v) No change. (vi) effecting, directly or indirectly, any business transaction with the issuer of any such security or any officer, director or 10% stockholder of any such issuer, except as provided in Commentary .07 to Rule 190 with respect to business transactions, under certain conditions, between a specialist or his member organization or any member, officer, employee or approved person therein and the sponsor of an ETF (as defined therein) that he or it is registered as specialist in; (vii) through (ix) No change. With respect to any security in which a specialist is registered, Exchange rules require the specialist to report to the Exchange: (i) through (iii) No change. (iv) any unusual transaction in which the specialist participates as a broker or dealer; [and] (v) each purchase and sale for the specialists’ own account[.]; and (vi) a full description of any business transaction or relationship that a specialist or his member organization or any member, officer, employee or approved person therein may have, under certain conditions as provided in Commentary .07 to Rule 190, with any sponsor of an ETF (as defined therein) that he or it is registered as specialist in. (e) No change. [FR Doc. E6–4537 Filed 3–28–06; 8:45 am] BILLING CODE 8010–01–P VerDate Aug<31>2005 15:39 Mar 28, 2006 Jkt 208001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53537; File No. SR–CBOE– 2006–15] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto To Reflect Committee Revisions March 21, 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 February 6, 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, II and III below, which Items have been prepared by the Exchange. On March 13, 2006, the CBOE filed Amendment No. 1 to the proposed rule change.3 The CBOE has designated the proposed rule change as concerned solely with the administration of the Exchange under Section 19(b)(3)(A)(iii) of the Act,4 and Rule 19b–4(f)(3) thereunder,5 which renders the proposal effective upon filing with the Commission.6 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its rules to delete or modify specific references to certain committees that have been eliminated and to modify 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Amendment No. 1 replaces the original filing in its entirety. In Amendment No. 1, the Exchange: (i) revised the rule text to reflect revisions that had become effective through separate, unrelated rule change filings and to correct typographical errors; and (ii) made certain clarifications in the text of CBOE Rule 4.11, Interpretation and Policy .05(b) regarding the Exchange’s procedures in the event that a Market-Maker’s position limit exemption request is denied and in the event that the Exchange subsequently reviews a position limit exemption request that it had granted. 4 15 U.S.C. 78s(b)(3)(A)(iii). 5 17 CFR 240.19b–4(f)(3). 6 For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change, as amended, under Section 19(b)(3)(C) of the Act, the Commission considers the period to commence on March 13, 2006, the date on which the Exchange submitted Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C). 2 17 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 specific references to other committees whose titles or authorities have changed. All references that currently relate to committees that are being eliminated will be replaced with terms such as the ‘‘appropriate Exchange committee’’ or the ‘‘Exchange.’’ All references to committees that have changed titles or authorities will be amended accordingly. The text of the proposed rule change is available on the Exchange’s Web site (http:// www.cboe.com), at the Exchange’s Office of the Secretary, 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 Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change, as amended, is to delete from the CBOE Rules any specific references to the Clearing Procedures Committee, Exemption Committee, Modified Trading System Appointments (‘‘MTS’’) Committee, appropriate Screen-Based Trading (‘‘SBT’’) Trading Committee, appropriate SBT DPM Appointments Committee, and Special Product Assignment Committee. The Exchange is proposing to make these changes at this time because it recently determined to eliminate these committees and reassign their respective authorities to other committees and/or to Exchange staff.7 The Exchange is also deleting all references to the Allocation Committee in the CBOE Rules in order to simplify the rule text and avoid confusion over the division of authorities among that 7 For example, the authorities of the former MTS Committee have been reassigned to the Allocation Committee and the appropriate Market Performance Committees. There were also other committees that the Exchange eliminated for which there are no specific references in the CBOE rules that need to be updated. For example, the Market Fee Oversight Committee was eliminated and its specific authorities have been reassigned to the appropriate Market Performance Committees. E:\FR\FM\29MRN1.SGM 29MRN1 Federal Register / Vol. 71, No. 60 / Wednesday, March 29, 2006 / Notices hsrobinson on PROD1PC68 with NOTICES committee and other appropriate Exchange committees that are assuming the authorities of the former Special Product Assignment Committee. In addition, a reference to the Securities Committee in CBOE Rule 6.41 is being deleted to avoid confusion, because this committee is a committee of the Options Clearing Corporation and not of the Exchange. References to the ‘‘appropriate Floor Procedure Committee,’’ the ‘‘appropriate FPC’’ and the like are also being amended to say the ‘‘appropriate Procedure Committee’’ to reflect a change in the names of those committees.8 The Exchange also proposes to make certain clarifications in the text of CBOE Rule 4.11, Interpretation and Policy .05(b) regarding the procedures following denial of a Market-Maker’s position limit exemption request and subsequent Exchange review of a granted position limit exemption request.9 Finally, various miscellaneous changes to the rule text to accommodate the above-described changes are also being made. 8 Specifically, the Exchange has changed the titles of its Floor Procedure Committees to simply ‘‘Procedure Committees’’ (e.g., the Equity Floor Procedure Committee is now the Equity Option Procedure Committee and the Index Floor Procedure Committee is now the Index Option Procedure Committee). 9 With respect to an initial request, ordinarily a first exemption request application will be considered without the presence of the MarketMaker. If a Market-Maker’s first application request for an exemption is denied and he wishes to reapply, he may make a brief personal appearance before the Exchange. The proposed rule change deletes language that had limited a Market-Maker’s appearance to presenting only those issues not previously considered as part of the first application. Under the proposed rule change, no such restriction will apply. With respect to review of a granted request, which may be revoked or modified by the Exchange, the proposed rule change clarifies that such reviews may be considered by the Exchange without the presence of the Market-Maker that originally received the exemption. The proposed rule change also clarifies that, if a granted exemption that is reviewed by the Exchange without the presence of a Market-Maker is revoked or modified and the Market-Maker wishes to reapply for the exemption or a modified exemption, the Market-Maker may make a brief scheduled personal appearance before the Exchange. The Exchange notes that CBOE Rule 4.11, Interpretation and Policy .05 applies only to Market-Makers seeking an exemption to the standard position limits in all options traded on the Exchange for the purpose of assuring that there is sufficient depth and liquidity in the marketplace, and not to confer a right upon the Market-Maker applying for an exemption. As such and in light of the procedural safeguards described herein, as well as other procedural safeguards set out in Rule 4.11, Interpretation and Policy .05, the purpose of the exemption process, and the prohibition against the granting of retroactive exemptions, decisions granting or denying exemptions are not subject to review under Chapter XIX of the Exchange Rules regarding Hearings and Review. VerDate Aug<31>2005 15:39 Mar 28, 2006 Jkt 208001 In trying to accommodate the reassignments, the Exchange believes a better approach than making a specific reference to a committee is to make reference to the ‘‘appropriate Exchange committee’’ in the instances where the reassignment is to another committee and to the ‘‘Exchange’’ in instances where the reassignment is to Exchange staff and/or a committee. In this way, the Exchange will have the flexibility to delegate the authorities under the rules to the appropriate committee (or appropriate Exchange staff) and will not have to make a rule change merely, for instance, to accommodate a future change in the title of a committee or to accommodate the reassignment of an authority to another committee. As the authority exercised by committees (and by Exchange staff) is delegated pursuant to Exchange rules, the Exchange believes that the title of the committees exercising their authority should not be relevant. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the requirements of Section 6(b)(5) of the Act 10 which requires, among other things, that the rules of the Exchange be designed to promote just and equitable principles of trade, foster cooperation among persons engaged in facilitating securities transactions, and protect investors and the public interest. The CBOE believes that this proposal complies with the Act because the CBOE is amending its rules to update and/or generalize certain committee references to facilitate compliance. 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 The Exchange has designated this proposal as concerned solely with the administration of the Exchange under Section 19(b)(3)(A)(iii) of the Act,11 and 10 15 11 15 PO 00000 U.S.C. 78f(b)(5). U.S.C. 78s(b)(3)(A)(iii). Frm 00089 Fmt 4703 Sfmt 4703 15779 Rule 19b–4(f)(3) thereunder,12 which renders the proposal effective upon filing with the Commission. At any time within 60 days of the filing of the proposed rule change, as amended, 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–2006–15 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 No. SR–CBOE–2006–15. 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 the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying 12 17 CFR 240.19b–4(f)(3). supra note 6. 13 See E:\FR\FM\29MRN1.SGM 29MRN1 15780 Federal Register / Vol. 71, No. 60 / Wednesday, March 29, 2006 / Notices information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR–CBOE–2006–15 and should be submitted on or before April 19, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.14 Nancy M. Morris, Secretary. [FR Doc. E6–4517 Filed 3–28–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53543; File No. SR–CBOE– 2006–21] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Revise Provisions of the Exchange’s Crossing Rule March 23, 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 February 28, 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 CBOE. The Exchange filed the proposal as a ‘‘non-controversial’’ rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. hsrobinson on PROD1PC68 with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change CBOE proposes certain changes to provisions of its rule that governs the participation rights of firms crossing orders in open outcry. The text of the proposed rule change is available on the Exchange’s Web site (http:// www.cboe.com), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 15:39 Mar 28, 2006 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Paragraphs (d) and (e) of CBOE Rule 6.74 currently provide guaranteed participation rights to floor brokers in trades that are crossed in open outcry in certain circumstances. Generally, these provisions provide that if the trade takes place at the market provided by the crowd then, after all public customer orders in the book and represented in the trading crowd at the time the market was established are satisfied, the floor broker representing the order will be entitled to cross a certain percentage of the contracts remaining in the original order. The percentage could be 40% or 20%, depending upon the particular type of option. For example, transactions in equity options are generally subject to a 40% participation guarantee under paragraph (d) and broad-based index options (where the option class is not traded at an equity option trading post) are generally subject to a 20% participation guarantee under paragraph (e). In order to clarify and simplify the crossing provisions related to the 40% and 20% participation entitlements, the Exchange is deleting the current crossing entitlement provisions in paragraphs (d) and (e) of CBOE Rule 6.74 and creating a new crossing entitlement provision (proposed new paragraph (d) of CBOE Rule 6.74), which combines aspects of current paragraphs (d) and (e) of the current rule. The new paragraph (d) would provide a crossing entitlement for all option classes traded on the Exchange,5 and set forth applicable parameters that 5 Currently, the crossing entitlements of CBOE Rule 6.74(d) and (e) apply only to trading in equity and broad-based index options. See Telephone conversation between David Doherty, Attorney, CBOE, and Jan Woo, Attorney, Division of Market Regulation, Commission, March 15, 2006 (‘‘Telephone conversation of March 15, 2006’’). 14 17 VerDate Aug<31>2005 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, 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 these statements may be examined at the places specified in Item IV below. CBOE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. Jkt 208001 PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 would be set by the appropriate Exchange Procedure Committee on a class-by-class basis.6 In addition, proposed CBOE Rule 6.74(d)(viii) would provide that the appropriate Procedure Committee would have the authority to exempt an option class from the section of the rule that provides for the crossing guarantee.7 For each class that is subject to the crossing entitlement provisions, the appropriate Procedure Committee would determine the following: (i) Whether the crossing guarantee applies to facilitations and/or solicitations; 8 (ii) a crossing guarantee percentage of either 20% or 40% (after public customer orders are satisfied); 9 and (iii) the eligible size for an order that may be subject to the guaranteed crossing entitlement, although the eligible order size may not be less than 50 contracts.10 6 The particular open outcry trading procedures applicable to the crossing guarantee will continue to apply unchanged. Generally, a floor broker representing an order eligible for crossing must request bids and offers and make all persons in the trading crowd aware of the request. When the cross involves a facilitation of a public customer order, the floor broker must make certain disclosures on the order ticket for the public customer and must disclose all securities that are components of the public customer order before requesting bids and offers for the execution of all components of the order. Once the trading crowd has provided a quote, the floor broker is entitled to cross a certain percentage of the order after all public customer orders that were on the limit order book and represented in the trading crowd at the time the market was established have been satisfied. The current provisions describing the Designated Primary Market-Maker’s (‘‘DPM’’) guaranteed participation level (the guaranteed participation level will be a percentage that when combined with the percentage the originating firm crossed, does not exceed 40% of the order that remains after satisfying those public customer orders which trade ahead of the cross transaction) and priority of members of the trading crowd who established the market also apply unchanged under the proposed rule change. As is also provided in the existing procedures, nothing prohibits a floor broker or DPM from trading more than their applicable participation entitlements if the other members of the trading crowd do not choose to trade the remaining portion of the order. The proposed rule change also includes references to Lead MarketMakers, since that category of Exchange market participant may be entitled to a participation entitlement pursuant to CBOE Rule 8.15B. 7 This exemptive provision is identical to what is currently provided in subparagraph (e)(viii) of CBOE Rule 6.74 with respect to broad-based index options. Telephone conversation of March 15, 2006. 8 Currently, CBOE Rule 6.74(d) and Commentary .08 to CBOE Rule 6.74 provide for a crossing guarantee for both facilitation and solicitation orders in the case of equity options, and CBOE Rule 6.74(e) provides a crossing guarantee for facilitation orders only in the case of broad-based index options. Telephone conversation of March 15, 2006. 9 As described above, the current rules provide a 20% crossing guarantee in the case of broad-based index options and a 40% crossing guarantee in the case of equity options. Telephone conversation of March 15, 2006. 10 The proposed rule change also would establish that, in determining whether an order satisfies the eligible order size requirement, any multi-part or complex order (including a spread, straddle, E:\FR\FM\29MRN1.SGM 29MRN1

Agencies

[Federal Register Volume 71, Number 60 (Wednesday, March 29, 2006)]
[Notices]
[Pages 15778-15780]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-4517]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53537; File No. SR-CBOE-2006-15]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change and Amendment No. 1 Thereto To Reflect Committee Revisions

March 21, 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 February 6, 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, II and III below, which Items have been prepared by the 
Exchange. On March 13, 2006, the CBOE filed Amendment No. 1 to the 
proposed rule change.\3\ The CBOE has designated the proposed rule 
change as concerned solely with the administration of the Exchange 
under Section 19(b)(3)(A)(iii) of the Act,\4\ and Rule 19b-4(f)(3) 
thereunder,\5\ which renders the proposal effective upon filing with 
the Commission.\6\ The Commission is publishing this notice to solicit 
comments on the proposed rule change, as amended, from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 replaces the original filing in its 
entirety. In Amendment No. 1, the Exchange: (i) revised the rule 
text to reflect revisions that had become effective through 
separate, unrelated rule change filings and to correct typographical 
errors; and (ii) made certain clarifications in the text of CBOE 
Rule 4.11, Interpretation and Policy .05(b) regarding the Exchange's 
procedures in the event that a Market-Maker's position limit 
exemption request is denied and in the event that the Exchange 
subsequently reviews a position limit exemption request that it had 
granted.
    \4\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \5\ 17 CFR 240.19b-4(f)(3).
    \6\ For purposes of calculating the 60-day period within which 
the Commission may summarily abrogate the proposed rule change, as 
amended, under Section 19(b)(3)(C) of the Act, the Commission 
considers the period to commence on March 13, 2006, the date on 
which the Exchange submitted Amendment No. 1. See 15 U.S.C. 
78s(b)(3)(C).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its rules to delete or modify 
specific references to certain committees that have been eliminated and 
to modify specific references to other committees whose titles or 
authorities have changed. All references that currently relate to 
committees that are being eliminated will be replaced with terms such 
as the ``appropriate Exchange committee'' or the ``Exchange.'' All 
references to committees that have changed titles or authorities will 
be amended accordingly. The text of the proposed rule change is 
available on the Exchange's Web site (http://www.cboe.com), at the 
Exchange's Office of the Secretary, 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 Exchange included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant aspects of such 
statements.

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

1. Purpose
    The purpose of the proposed rule change, as amended, is to delete 
from the CBOE Rules any specific references to the Clearing Procedures 
Committee, Exemption Committee, Modified Trading System Appointments 
(``MTS'') Committee, appropriate Screen-Based Trading (``SBT'') Trading 
Committee, appropriate SBT DPM Appointments Committee, and Special 
Product Assignment Committee. The Exchange is proposing to make these 
changes at this time because it recently determined to eliminate these 
committees and reassign their respective authorities to other 
committees and/or to Exchange staff.\7\ The Exchange is also deleting 
all references to the Allocation Committee in the CBOE Rules in order 
to simplify the rule text and avoid confusion over the division of 
authorities among that

[[Page 15779]]

committee and other appropriate Exchange committees that are assuming 
the authorities of the former Special Product Assignment Committee. In 
addition, a reference to the Securities Committee in CBOE Rule 6.41 is 
being deleted to avoid confusion, because this committee is a committee 
of the Options Clearing Corporation and not of the Exchange. References 
to the ``appropriate Floor Procedure Committee,'' the ``appropriate 
FPC'' and the like are also being amended to say the ``appropriate 
Procedure Committee'' to reflect a change in the names of those 
committees.\8\
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    \7\ For example, the authorities of the former MTS Committee 
have been reassigned to the Allocation Committee and the appropriate 
Market Performance Committees. There were also other committees that 
the Exchange eliminated for which there are no specific references 
in the CBOE rules that need to be updated. For example, the Market 
Fee Oversight Committee was eliminated and its specific authorities 
have been reassigned to the appropriate Market Performance 
Committees.
    \8\ Specifically, the Exchange has changed the titles of its 
Floor Procedure Committees to simply ``Procedure Committees'' (e.g., 
the Equity Floor Procedure Committee is now the Equity Option 
Procedure Committee and the Index Floor Procedure Committee is now 
the Index Option Procedure Committee).
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    The Exchange also proposes to make certain clarifications in the 
text of CBOE Rule 4.11, Interpretation and Policy .05(b) regarding the 
procedures following denial of a Market-Maker's position limit 
exemption request and subsequent Exchange review of a granted position 
limit exemption request.\9\
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    \9\ With respect to an initial request, ordinarily a first 
exemption request application will be considered without the 
presence of the Market-Maker. If a Market-Maker's first application 
request for an exemption is denied and he wishes to reapply, he may 
make a brief personal appearance before the Exchange. The proposed 
rule change deletes language that had limited a Market-Maker's 
appearance to presenting only those issues not previously considered 
as part of the first application. Under the proposed rule change, no 
such restriction will apply. With respect to review of a granted 
request, which may be revoked or modified by the Exchange, the 
proposed rule change clarifies that such reviews may be considered 
by the Exchange without the presence of the Market-Maker that 
originally received the exemption. The proposed rule change also 
clarifies that, if a granted exemption that is reviewed by the 
Exchange without the presence of a Market-Maker is revoked or 
modified and the Market-Maker wishes to reapply for the exemption or 
a modified exemption, the Market-Maker may make a brief scheduled 
personal appearance before the Exchange. The Exchange notes that 
CBOE Rule 4.11, Interpretation and Policy .05 applies only to 
Market-Makers seeking an exemption to the standard position limits 
in all options traded on the Exchange for the purpose of assuring 
that there is sufficient depth and liquidity in the marketplace, and 
not to confer a right upon the Market-Maker applying for an 
exemption. As such and in light of the procedural safeguards 
described herein, as well as other procedural safeguards set out in 
Rule 4.11, Interpretation and Policy .05, the purpose of the 
exemption process, and the prohibition against the granting of 
retroactive exemptions, decisions granting or denying exemptions are 
not subject to review under Chapter XIX of the Exchange Rules 
regarding Hearings and Review.
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    Finally, various miscellaneous changes to the rule text to 
accommodate the above-described changes are also being made.
    In trying to accommodate the reassignments, the Exchange believes a 
better approach than making a specific reference to a committee is to 
make reference to the ``appropriate Exchange committee'' in the 
instances where the reassignment is to another committee and to the 
``Exchange'' in instances where the reassignment is to Exchange staff 
and/or a committee. In this way, the Exchange will have the flexibility 
to delegate the authorities under the rules to the appropriate 
committee (or appropriate Exchange staff) and will not have to make a 
rule change merely, for instance, to accommodate a future change in the 
title of a committee or to accommodate the reassignment of an authority 
to another committee. As the authority exercised by committees (and by 
Exchange staff) is delegated pursuant to Exchange rules, the Exchange 
believes that the title of the committees exercising their authority 
should not be relevant.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the requirements of Section 6(b)(5) of the Act \10\ which requires, 
among other things, that the rules of the Exchange be designed to 
promote just and equitable principles of trade, foster cooperation 
among persons engaged in facilitating securities transactions, and 
protect investors and the public interest. The CBOE believes that this 
proposal complies with the Act because the CBOE is amending its rules 
to update and/or generalize certain committee references to facilitate 
compliance.
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    \10\ 15 U.S.C. 78f(b)(5).
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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

    The Exchange has designated this proposal as concerned solely with 
the administration of the Exchange under Section 19(b)(3)(A)(iii) of 
the Act,\11\ and Rule 19b-4(f)(3) thereunder,\12\ which renders the 
proposal effective upon filing with the Commission.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 17 CFR 240.19b-4(f)(3).
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    At any time within 60 days of the filing of the proposed rule 
change, as amended, 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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    \13\ See supra note 6.
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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, 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 rule-comments@sec.gov. Please include 
File Number SR-CBOE-2006-15 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 No. SR-CBOE-2006-15. 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 the filing 
also will be available for inspection and copying at the principal 
office of the Exchange. All comments received will be posted without 
change; the Commission does not edit personal identifying

[[Page 15780]]

information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File No. SR-CBOE-2006-15 and should be submitted on or before April 19, 
2006.
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    \14\ 17 CFR 200.30-3(a)(12).

For the Commission, by the Division of Market Regulation, pursuant 
to delegated authority.\14\
Nancy M. Morris,
Secretary.
[FR Doc. E6-4517 Filed 3-28-06; 8:45 am]
BILLING CODE 8010-01-P