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]
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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
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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.
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
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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 (https://
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.
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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.
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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
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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 (https://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 (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room. Copies of the filing also will be
available for inspection and copying at
the principal office of the 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
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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 (https://
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
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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.
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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,
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]]>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]
-----------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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 (https://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\
---------------------------------------------------------------------------
\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 (https://
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 (https://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room. Copies of the filing
also will be available for inspection and copying at the principal
office of the 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
