Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Its Marketing Fee Program, 27756-27757 [E6-7245]

Download as PDF 27756 Federal Register / Vol. 71, No. 92 / Friday, May 12, 2006 / Notices SPDRs, [and] options on DIA, options on NDX, and options on RUT. The fee will not apply to: Market-Maker-to-Market[Release No. 34–53767; File No. SR–CBOE– Maker transactions including 2006–43] transactions resulting from orders from non-member market-makers; Self-Regulatory Organizations; transactions resulting from P/A orders; Chicago Board Options Exchange, Incorporated; Notice of Filing and transactions resulting from Immediate Effectiveness of a Proposed accommodation liquidations (cabinet Rule Change Relating to Its Marketing trades); and transactions resulting from Fee Program dividend strategies, merger strategies, and short stock interest strategies as May 8, 2006. defined in footnote 13 of this Fees Pursuant to Section 19(b)(1) of the Schedule. This fee shall not apply to Securities Exchange Act of 1934 index options and options on ETFs (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 (other than options on SPDRs, [and] notice is hereby given that on April 28, options on DIA, options on NDX, and 2006, the Chicago Board Options options on RUT). A Preferred MarketExchange, Incorporated (‘‘CBOE’’ or Maker will only be given access to the ‘‘Exchange’’) filed with the Securities marketing fee funds generated from a and Exchange Commission Preferred order if the Preferred Market(‘‘Commission’’) the proposed rule Maker has an appointment in the class change as described in Items I, II, and in which the Preferred order is received III below, which Items have been and executed. If less than 80% of the prepared by the Exchange. The CBOE marketing fee funds are paid out by the has designated this proposal as one DPM/LMM or Preferred Market-Maker establishing or changing a due, fee, or in a given month, then the Exchange other charge imposed by the CBOE under Section 19(b)(3)(A)(ii) of the Act 3 would refund such surplus at the end of and Rule 19b–4(f)(2) thereunder,4 which the month on a pro rata basis based renders the proposal effective upon upon contributions made by the Marketfiling with the Commission. The Makers, RMMs, e-DPMs, DPMs and Commission is publishing this notice to LMMs. However, if 80% or more of the solicit comments on the proposed rule accumulated funds in a given month are change from interested persons. paid out by the DPM/LMM or Preferred Market-Maker, there will not be a rebate I. Self-Regulatory Organization’s for that month and the funds will carry Statement of the Terms of Substance of over and will be included in the pool of the Proposed Rule Change funds to be used by the DPM/LMM or The CBOE proposes to amend its Fees Preferred Market-Maker the following Schedule and its marketing fee program. month. At the end of each quarter, the Below is the text of the proposed rule Exchange would then refund any change. Proposed new language is in italics; deleted language is in [brackets]. surplus, if any, on a pro rata basis based upon contributions made by the MarketChicago Board Options Exchange, Inc. Makers, RMMs, DPMs, e-DPMs and LMMs. CBOE’s marketing fee program Fees Schedule as described above will be in effect until [March 1] May 1, 2006 June 2, 2006. 1. No Change. Remainder of Fees Schedule—No 2. Marketing Fee (6)(16) .......... $.65 change. 3.–4. No Change. II. Self-Regulatory Organization’s Footnotes: Statement of the Purpose of, and (1)–(5) No Change. Statutory Basis for, the Proposed Rule (6) The Marketing Fee will be assessed only on transactions of Market- Change Makers, RMMs, e-DPMs, DPMs, and In its filing with the Commission, the LMMs resulting from orders for less Exchange included statements than 1,000 contracts (i) from payment concerning the purpose of and basis for accepting firms, or (ii) that have the proposed rule change, and discussed designated a ‘‘Preferred Market-Maker’’ any comments it received on the under CBOE Rule 8.13 at the rate of $.65 proposed rule change. The text of these per contract on all classes of equity statements may be examined at the options, options on HOLDRs, options on places specified in Item IV below. The CBOE has prepared summaries, set forth 1 15 U.S.C. 78s(b)(1). in Sections A, B, and C below, of the 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). most significant aspects of such 4 17 CFR 240.19b–4(f)(2). statements. sroberts on PROD1PC70 with NOTICES SECURITIES AND EXCHANGE COMMISSION VerDate Aug<31>2005 16:54 May 11, 2006 Jkt 208001 PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The CBOE states that, currently, its marketing fee is assessed upon DPMs, LMMs, e-DPMs, RMMs, and MarketMakers at the rate of $.65 per contract on transactions of Market-Makers, RMMs, e-DPMs, DPMs, and LMMs resulting from orders for less than 1,000 contracts (i) from payment accepting firms, or (ii) that have designated a ‘‘Preferred Market-Maker’’ under CBOE Rule 8.13. The Exchanges notes that this fee does not apply to: Market-Maker-toMarket-Maker transactions (which includes all transactions between any combination of DPMs, e-DPMs, RMMs, LMMs, and Market-Makers, and transactions resulting from orders from non-member market-makers); transactions resulting from inbound P/A orders; transactions resulting from accommodation liquidation (cabinet trades); or transactions resulting from dividend strategies, merger strategies, and short stock interest strategies. CBOE states that the marketing fee is assessed on all equity option classes and options on HOLDRs, options on SPDRs, and options on DIA. CBOE now proposes to amend its marketing fee program to assess the fee on options on the Nasdaq-100 (NDXTM) Index and options on the Russell 2000 (RUT) Index. The fee would commence in NDX and RUT options on May 1, 2006. CBOE states that it is not amending its marketing fee program in any other respect. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,5 in general, and furthers the objectives of Section 6(b)(4) of the Act,6 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among CBOE members. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any inappropriate burden on competition not necessary or appropriate in furtherance of the purposes of the Act. 5 15 6 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). E:\FR\FM\12MYN1.SGM 12MYN1 27757 Federal Register / Vol. 71, No. 92 / Friday, May 12, 2006 / Notices 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 has been designated as a fee change pursuant to Section 19(b)(3)(A)(ii) of the Act 7 and Rule 19b–4(f)(2) 8 thereunder, because it establishes or changes a due, fee, or other charge imposed by the Exchange. Accordingly, the proposal 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. 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: sroberts on PROD1PC70 with 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 Number SR–CBOE–2006–43 on the subject line. 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–2006–43 and should be submitted on or before June 2, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.9 Nancy M. Morris, Secretary. [FR Doc. E6–7245 Filed 5–11–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53771; File No. SR–CBOE– 2006–39] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change Regarding the e-DPM Membership Ownership Requirement May 8, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 Paper Comments notice is hereby given that on April 20, • Send paper comments in triplicate 2006, the Chicago Board Options to Nancy M. Morris, Secretary, Exchange, Incorporated (‘‘CBOE’’ or Securities and Exchange Commission, ‘‘Exchange’’) filed with the Securities 100 F Street, NE., Washington, DC and Exchange Commission 20549–1090. (‘‘Commission’’) the proposed rule All submissions should refer to File change as described in Items I, II, and Number SR–CBOE–2006–43. This file III below, which Items have been number should be included on the prepared by the CBOE. The Commission subject line if e-mail is used. To help the is publishing this notice to solicit Commission process and review your comments on the proposed rule change comments more efficiently, please use 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 submission, all subsequent The Exchange proposes to clarify the amendments, all written statements application of the e-DPM membership with respect to the proposed rule ownership requirement. The text of the change that are filed with the 9 17 7 15 8 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). VerDate Aug<31>2005 16:54 May 11, 2006 Jkt 208001 PO 00000 Frm 00097 Fmt 4703 proposed rule change is set forth below. New text is in italics. Chicago Board Options Exchange, Incorporated * * * * * Rule 8.92. Electronic DPM Program (a)–(c) No change. (d) Membership Requirement. Until July 12, 2007, each e-DPM organization is required to (i) own one Exchange membership for every 30 products allocated to the e-DPM; or (ii) lease one Exchange membership for every 20 products allocated to the e-DPM. After July 12, 2007, each e-DPM organization is required to own one Exchange membership for every 30 products allocated to the e-DPM. An Exchange membership shall include a transferable regular membership or a Chicago Board of Trade full membership that has effectively been exercised pursuant to Article Fifth(b) of the Certificate of Incorporation. Memberships used to satisfy this requirement may not be used for any other purpose including being leased to another member, to comply with the DPM membership ownership requirement of Rule 8.85(e), or for trading on the trading floor. For purposes of this Rule, the term ‘‘product’’ refers to all options of the same single underlying security/value. An e-DPM organization shall be deemed to own or lease an Exchange membership for purposes of this paragraph (d) if its parent company owns or leases seats that are used solely for the e-DPM organization’s e-DPM activities. (e) No change. * * * * * II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, 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. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to clarify the application of CBOE Rule 8.92(d) Sfmt 4703 E:\FR\FM\12MYN1.SGM 12MYN1

Agencies

[Federal Register Volume 71, Number 92 (Friday, May 12, 2006)]
[Notices]
[Pages 27756-27757]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-7245]



[[Page 27756]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53767; File No. SR-CBOE-2006-43]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to Its Marketing Fee Program

May 8, 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 April 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, II, and III below, which Items have been prepared by the 
Exchange. The CBOE has designated this proposal as one establishing or 
changing a due, fee, or other charge imposed by the CBOE under Section 
19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ 
which renders the proposal effective upon filing with the Commission. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The CBOE proposes to amend its Fees Schedule and its marketing fee 
program. Below is the text of the proposed rule change. Proposed new 
language is in italics; deleted language is in [brackets].

Chicago Board Options Exchange, Inc.

Fees Schedule

[March 1] May 1, 2006

    1. No Change.

  2. Marketing Fee (6)(16).......................................   $.65
 

    3.-4. No Change.
    Footnotes:
    (1)-(5) No Change.
    (6) The Marketing Fee will be assessed only on transactions of 
Market-Makers, RMMs, e-DPMs, DPMs, and LMMs resulting from orders for 
less than 1,000 contracts (i) from payment accepting firms, or (ii) 
that have designated a ``Preferred Market-Maker'' under CBOE Rule 8.13 
at the rate of $.65 per contract on all classes of equity options, 
options on HOLDRs, options on SPDRs, [and] options on DIA, options on 
NDX, and options on RUT. The fee will not apply to: Market-Maker-to-
Market-Maker transactions including transactions resulting from orders 
from non-member market-makers; transactions resulting from P/A orders; 
transactions resulting from accommodation liquidations (cabinet 
trades); and transactions resulting from dividend strategies, merger 
strategies, and short stock interest strategies as defined in footnote 
13 of this Fees Schedule. This fee shall not apply to index options and 
options on ETFs (other than options on SPDRs, [and] options on DIA, 
options on NDX, and options on RUT). A Preferred Market-Maker will only 
be given access to the marketing fee funds generated from a Preferred 
order if the Preferred Market-Maker has an appointment in the class in 
which the Preferred order is received and executed. If less than 80% of 
the marketing fee funds are paid out by the DPM/LMM or Preferred 
Market-Maker in a given month, then the Exchange would refund such 
surplus at the end of the month on a pro rata basis based upon 
contributions made by the Market-Makers, RMMs, e-DPMs, DPMs and LMMs. 
However, if 80% or more of the accumulated funds in a given month are 
paid out by the DPM/LMM or Preferred Market-Maker, there will not be a 
rebate for that month and the funds will carry over and will be 
included in the pool of funds to be used by the DPM/LMM or Preferred 
Market-Maker the following month. At the end of each quarter, the 
Exchange would then refund any surplus, if any, on a pro rata basis 
based upon contributions made by the Market-Makers, RMMs, DPMs, e-DPMs 
and LMMs. CBOE's marketing fee program as described above will be in 
effect until June 2, 2006.
    Remainder of Fees Schedule--No change.

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

    In its filing with the Commission, the 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 CBOE has prepared summaries, set forth in Sections 
A, B, and C below, of the most significant aspects of such statements.

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

1. Purpose
    The CBOE states that, currently, its marketing fee is assessed upon 
DPMs, LMMs, e-DPMs, RMMs, and Market-Makers at the rate of $.65 per 
contract on transactions of Market-Makers, RMMs, e-DPMs, DPMs, and LMMs 
resulting from orders for less than 1,000 contracts (i) from payment 
accepting firms, or (ii) that have designated a ``Preferred Market-
Maker'' under CBOE Rule 8.13. The Exchanges notes that this fee does 
not apply to: Market-Maker-to-Market-Maker transactions (which includes 
all transactions between any combination of DPMs, e-DPMs, RMMs, LMMs, 
and Market-Makers, and transactions resulting from orders from non-
member market-makers); transactions resulting from inbound P/A orders; 
transactions resulting from accommodation liquidation (cabinet trades); 
or transactions resulting from dividend strategies, merger strategies, 
and short stock interest strategies. CBOE states that the marketing fee 
is assessed on all equity option classes and options on HOLDRs[reg], 
options on SPDRs[reg], and options on DIA.
    CBOE now proposes to amend its marketing fee program to assess the 
fee on options on the Nasdaq-100[reg] (NDXTM) Index and 
options on the Russell 2000[reg] (RUT) Index. The fee would commence in 
NDX and RUT options on May 1, 2006.
    CBOE states that it is not amending its marketing fee program in 
any other respect.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\5\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act,\6\ in particular, in that it 
is designed to provide for the equitable allocation of reasonable dues, 
fees, and other charges among CBOE members.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

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

[[Page 27757]]

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 has been designated as a fee 
change pursuant to Section 19(b)(3)(A)(ii) of the Act \7\ and Rule 19b-
4(f)(2) \8\ thereunder, because it establishes or changes a due, fee, 
or other charge imposed by the Exchange. Accordingly, the proposal 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.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2006-43 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2006-43. 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-2006-43 and should be submitted on or before June 
2, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-7245 Filed 5-11-06; 8:45 am]
BILLING CODE 8010-01-P