Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change Extending the Exchange's Preferred Market-Maker Pilot Program, 33017-33019 [E6-8805]

Download as PDF rwilkins on PROD1PC63 with NOTICES Federal Register / Vol. 71, No. 109 / Wednesday, June 7, 2006 / Notices spreads must be expressed in decimal increments no smaller than $0.05. Thus, the minimum increment applicable to OEX options will be the same as that which is currently applicable to SPX options. The Exchange believes that this change is appropriate given the complexity of these orders and the size of the underlying S&P 100 Index. As discussed above, the Exchange is also proposing to clarify in Exchange Rule 6.53C that complex orders entered into and resting in the COB may be expressed on a net price basis in a multiple of the minimum increment (i.e., $0.05 or $0.10, as applicable) or in a one-cent increment as determined by the appropriate Exchange committee on a class-by-class basis. The Exchange is also proposing to make some clarifications with respect to the execution of the individual legs of a complex order. By way of background, after a complex order has been executed at the total net debit or credit price, the contract quantity and price for each individual component leg of the trade are reported as executions. However, the Exchange’s rules are silent as to the minimum increment in which these resulting legs may be reported for execution. In the past, when a complex order was expressed in increments smaller than $0.05 or $0.10 in open outcry, each of the component legs of a resulting trade typically would be reported in ‘‘split’’ prices in order to reach the quoted debit or credit price. However, with the introduction of the COB, that system may report the legs of a resulting trade in one-cent increments. Because the Exchange rules do not specifically address the minimum increment in which the legs of a resulting complex order transaction are to be reported, CBOE is proposing to include language in Exchange Rules 6.42 and 6.53C to clarify that the legs of a complex order may be executed in open outcry, via COB or via a COA in one-cent increments, regardless of the minimum quoting increments otherwise appropriate to the individual legs of the order. This change applies a consistent standard for reporting the legs of a complex order transaction whether the transaction takes place in open outcry or via electronic trading, and the Exchange believes that it will enable members to more efficiently execute transactions with less component parts in the transaction. Lastly, the Exchange is proposing to update the provisions of its rules that refer to the trading of various types of complex orders such as spreads, straddles and combinations. These provisions will now include a cross reference to the various other types of VerDate Aug<31>2005 17:54 Jun 06, 2006 Jkt 208001 33017 Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, 2. Statutory Basis Securities and Exchange Commission, The Exchange believes the proposed 100 F Street, NE., Washington, DC rule change is consistent with Section 20549–1090. 19 in general, and furthers 6(b) of the Act, All submissions should refer to File the objectives of Section 6(b)(5) of the Number SR–CBOE–2005–65. This file 20 in particular, in that it is designed Act, to promote just and equitable principles number should be included on the of trade, to remove impediments to, and subject line if e-mail is used. To help the Commission process and review your perfect the mechanism of, a free and comments more efficiently, please use open market and a national market system, and to protect investors and the only one method. The Commission will post all comments on the Commission’s public interest. Internet Web site (http://www.sec.gov/ B. Self-Regulatory Organization’s rules/sro.shtml). Copies of the Statement on Burden on Competition submission, all subsequent amendments, all written statements CBOE does not believe that the with respect to the proposed rule proposed rule change will impose any burden on competition not necessary or change that are filed with the Commission, and all written appropriate in furtherance of the communications relating to the purposes of the Act. proposed rule change between the C. Self-Regulatory Organization’s Commission and any person, other than Statement on Comments on the those that may be withheld from the Proposed Rule Change Received From public in accordance with the Members, Participants or Others provisions of 5 U.S.C. 552, will be No written comments were solicited available for inspection and copying in or received with respect to the proposed the Commission’s Public Reference rule change. Room. Copies of the filing also will be available for inspection and copying at III. Date of Effectiveness of the the principal office of the Exchange. All Proposed Rule Change and Timing for comments received will be posted Commission Action without change; the Commission does Within 35 days of the date of not edit personal identifying publication of this notice in the Federal information from submissions. You Register or within such longer period (i) should submit only information that as the Commission may designate up to you wish to make available publicly. All 90 days of such date if it finds such submissions should refer to File longer period to be appropriate and Number SR–CBOE–2005–65 and should publishes its reasons for so finding or be submitted on or before June 28, 2006. (ii) as to which the Exchange consents, For the Commission, by the Division of the Commission will: Market Regulation, pursuant to delegated (A) By order approve such proposed authority.21 rule change, or J. Lynn Taylor, (B) Institute proceedings to determine Assistant Secretary. whether the proposed rule change [FR Doc. E6–8801 Filed 6–6–06; 8:45 am] should be disapproved. complex orders defined in Exchange Rule 6.53C. 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 rulecomments@sec.gov. Please include File Number SR–CBOE–2005–65 on the subject line. 19 15 20 15 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(5). Frm 00105 Fmt 4703 BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53922; File No. SR–CBOE– 2006–52] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change Extending the Exchange’s Preferred MarketMaker Pilot Program June 1, 2006. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 21 17 Sfmt 4703 E:\FR\FM\07JNN1.SGM CFR 200.30–3(a)(12). 07JNN1 33018 Federal Register / Vol. 71, No. 109 / Wednesday, June 7, 2006 / Notices (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on May 22, 2006, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons and is approving the proposal on an accelerated basis, for a pilot period through June 2, 2007. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its rules to extend the Preferred MarketMaker Pilot Program for one year, until June 2, 2007. The text of the proposed rule change is set forth below. Brackets indicate deletions; italics indicates new text. * * * * * Chicago Board Options Exchange, Incorporated Rules * * * Rule 8.13 Program * * Preferred Market-Maker (a) Generally. The Exchange may allow, on a class-by-class basis, for the receipt of marketable orders, through the Exchange’s Order Routing System when the Exchange’s disseminated quote is the NBBO, that carry a designation from the member transmitting the order that specifies a Market-Maker in that class as the ‘‘Preferred Market-Maker’’ for that order. A qualifying recipient of a Preferred Market-Maker order shall be afforded a participation entitlement as set forth in subparagraph (c) below. The Preferred Market-Maker Program shall be in effect until June 2, 2007[6] on a pilot basis. (b)–(c) No change. * * * * * rwilkins on PROD1PC63 with NOTICES II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the 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 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Aug<31>2005 17:54 Jun 06, 2006 Jkt 208001 statements may be examined at the places specified in Item III 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 In June 2005, CBOE obtained approval of a filing adopting a Preferred DPM Program.3 This allowed order providers to send orders to the Exchange designating a Preferred DPM from among the DPM complex. If the Preferred DPM was quoting at the NBBO at the time the order was received by CBOE, the Preferred DPM was entitled to the entire DPM participation entitlement. The Exchange subsequently modified the applicable participation entitlement percentages under the program 4 and, then expanded the scope of the program to apply to qualifying Market-Makers (as opposed to just DPMs).5 At that time, the program was renamed the Preferred Market-Maker Program. CBOE Rule 8.13 establishes a Preferred Market-Maker Program on a pilot basis. The pilot is due to expire on June 2, 2006. CBOE proposes extending the pilot program an additional year, until June 2, 2007. According to CBOE, since the pilot program was put into operation it has been positively received by the options trading community. CBOE believes that there has not been any adverse or unanticipated negative impact on the market by the presence of the Preferred Market-Maker Program. Further, CBOE believes that the pilot program helps generate greater order flow for the Exchange. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with section 6(b) of the Act 6 in general, and furthers the objectives of section 6(b)(5) of the Act 7 in particular, in that it should promote just and equitable principles of trade, serve to remove 3 See Securities Exchange Act Release No. 51779 (June 2, 2005), 70 FR 33564 (June 8, 2005) (approving SR–CBOE–2004–71). 4 See Securities Exchange Act Release Nos. 51824 (June 10, 2005), 70 FR 35476 (June 20, 2005) (approving SR–CBOE–2005–45); and 52021 (July 13, 2005), 70 FR 41462 (July 19, 2005) (approving SR–CBOE–2005–50). 5 See Securities Exchange Act Release No. 52506 (September 23, 2005), 70 FR 57340 (September 30, 2005) (approving SR–CBOE–2005–58). 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 impediments to and perfect the mechanism of a free and open market and a national market system, and protect investors and the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange believes that the proposed rule change does not 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 has not solicited, and does not intend to solicit comments on the proposed rule change. III. 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 and whether the pilot time frame is appropriate. 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–2006–52 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–2006–52. 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 E:\FR\FM\07JNN1.SGM 07JNN1 Federal Register / Vol. 71, No. 109 / Wednesday, June 7, 2006 / Notices approval of the proposed rule change would allow the pilot program to continue without disruption while the Commission and the Exchange continue to review the pilot program’s impact on the options market. Accordingly, the Commission finds good cause, consistent with section 19(b)(2) of the Act,11 for approving the proposed rule change prior to the thirtieth day after publication of notice thereof in the Federal Register. IV. Commission’s Findings and Order Granting Accelerated Approval of the Proposed Rule Change The Exchange has asked the Commission to approve the proposed rule change on an accelerated basis for an additional year so that the pilot program may continue uninterrupted. After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of section 6 of the Act 8 and the rules and regulations thereunder applicable to a national securities exchange,9 and, in particular, the requirements of section 6(b)(5) of the Act.10 Section 6(b)(5) requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Commission notes that the current pilot was approved on a one-year basis to give the Commission an opportunity to evaluate the impact of the pilot program on the options markets to determine whether it would be beneficial to customers and to the options markets as a whole before approving any request for permanent approval of the pilot program. The Commission believes that a one-year extension of the pilot period would provide the Commission with additional time to continue evaluate the Exchange’s Preferred Market-Maker Program. The Exchange has requested that the Commission find good cause for approving the proposed rule change prior to the thirtieth day after publication of notice thereof in the Federal Register. The Commission believes that granting accelerated rwilkins on PROD1PC63 with NOTICES the Commission’s Public Reference Room. Copies of such 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 information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CBOE–2006–52 and should be submitted on or before June 28, 2006. V. Conclusion 8 15 U.S.C. 78f. approving this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 10 15 U.S.C. 78f(b)(5). 9 In VerDate Aug<31>2005 17:54 Jun 06, 2006 Jkt 208001 It is therefore ordered, pursuant to section 19(b)(2) of the Act,12 that the proposed rule change (SR–CBOE–2006– 52), which institutes the pilot program through June 2, 2007, is hereby approved on an accelerated basis. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.13 J. Lynn Taylor, Assistant Secretary. [FR Doc. E6–8805 Filed 6–6–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53921; File No. SR–ISE– 2006–28] Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change To Extend the Pilot Period for Preferenced Orders June 1, 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 May 18, 2006, the International Securities Exchange, Inc. (‘‘ISE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons and is approving the proposal on an accelerated basis, for a pilot period through June 10, 2007. 11 15 U.S.C. 78s(b)(2). U.S.C. 78s(b)(2). 13 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 12 15 PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 33019 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is proposing to extend the pilot program for Preferenced Orders until June 10, 2007. The text of the proposed rule change is set forth below. Brackets indicate deletions; italics indicates new text. * * * * * Rule 713. Priority of Quotes and Orders (a) through (f) no change. Supplementary Material to Rule 713 .01 through .02 no change. .03 Preferenced Orders. For a pilot period ending [June 10, 2006] June 10, 2007, an Electronic Access Member may designate a ‘‘Preferred Market Maker’’ on orders it enters into the System (‘‘Preferenced Orders’’). (a) through (c) 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 III 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 According to the Exchange, the purpose of the proposed rule change is to extend, until June 10, 2007, the pilot period for preferenced orders as provided in paragraph .03 of the Supplementary Material to ISE Rule 713. The proposal amends ISE’s procedure for allocating trades among market makers and non-customer orders under ISE Rule 713 to provide an enhanced allocation to a ‘‘Preferred Market Maker’’ when it is quoting at the national best bid or offer (‘‘NBBO’’). Specifically, under the proposal, an Electronic Access Member may designate any market maker appointed to an options class to be a Preferred Market Maker on orders it enters into the Exchange’s system (‘‘Preferenced Orders’’). If the Preferred Market Maker is not quoting at the NBBO at the time E:\FR\FM\07JNN1.SGM 07JNN1

Agencies

[Federal Register Volume 71, Number 109 (Wednesday, June 7, 2006)]
[Notices]
[Pages 33017-33019]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-8805]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53922; File No. SR-CBOE-2006-52]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Order Granting Accelerated Approval 
of a Proposed Rule Change Extending the Exchange's Preferred Market-
Maker Pilot Program

June 1, 2006.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 33018]]

(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on May 22, 2006, the Chicago Board Options Exchange, Incorporated 
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by the Exchange. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons and is approving the 
proposal on an accelerated basis, for a pilot period through June 2, 
2007.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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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 extend the Preferred 
Market-Maker Pilot Program for one year, until June 2, 2007. The text 
of the proposed rule change is set forth below. Brackets indicate 
deletions; italics indicates new text.
* * * * *

Chicago Board Options Exchange, Incorporated

Rules

* * * * *

Rule 8.13 Preferred Market-Maker Program

    (a) Generally. The Exchange may allow, on a class-by-class basis, 
for the receipt of marketable orders, through the Exchange's Order 
Routing System when the Exchange's disseminated quote is the NBBO, that 
carry a designation from the member transmitting the order that 
specifies a Market-Maker in that class as the ``Preferred Market-
Maker'' for that order. A qualifying recipient of a Preferred Market-
Maker order shall be afforded a participation entitlement as set forth 
in subparagraph (c) below. The Preferred Market-Maker Program shall be 
in effect until June 2, 2007[6] on a pilot basis.
    (b)-(c) 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 III 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
    In June 2005, CBOE obtained approval of a filing adopting a 
Preferred DPM Program.\3\ This allowed order providers to send orders 
to the Exchange designating a Preferred DPM from among the DPM complex. 
If the Preferred DPM was quoting at the NBBO at the time the order was 
received by CBOE, the Preferred DPM was entitled to the entire DPM 
participation entitlement. The Exchange subsequently modified the 
applicable participation entitlement percentages under the program \4\ 
and, then expanded the scope of the program to apply to qualifying 
Market-Makers (as opposed to just DPMs).\5\ At that time, the program 
was renamed the Preferred Market-Maker Program.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 51779 (June 2, 
2005), 70 FR 33564 (June 8, 2005) (approving SR-CBOE-2004-71).
    \4\ See Securities Exchange Act Release Nos. 51824 (June 10, 
2005), 70 FR 35476 (June 20, 2005) (approving SR-CBOE-2005-45); and 
52021 (July 13, 2005), 70 FR 41462 (July 19, 2005) (approving SR-
CBOE-2005-50).
    \5\ See Securities Exchange Act Release No. 52506 (September 23, 
2005), 70 FR 57340 (September 30, 2005) (approving SR-CBOE-2005-58).
---------------------------------------------------------------------------

    CBOE Rule 8.13 establishes a Preferred Market-Maker Program on a 
pilot basis. The pilot is due to expire on June 2, 2006. CBOE proposes 
extending the pilot program an additional year, until June 2, 2007. 
According to CBOE, since the pilot program was put into operation it 
has been positively received by the options trading community. CBOE 
believes that there has not been any adverse or unanticipated negative 
impact on the market by the presence of the Preferred Market-Maker 
Program. Further, CBOE believes that the pilot program helps generate 
greater order flow for the Exchange.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act \6\ in general, and furthers the 
objectives of section 6(b)(5) of the Act \7\ in particular, in that it 
should promote just and equitable principles of trade, serve to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and protect investors and the public 
interest.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    The Exchange believes that the proposed rule change does not 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 has not solicited, and does not intend to solicit 
comments on the proposed rule change.

III. 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 and whether the pilot time frame is 
appropriate. 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-2006-52 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-2006-52. 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

[[Page 33019]]

the Commission's Public Reference Room. Copies of such 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 information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
CBOE-2006-52 and should be submitted on or before June 28, 2006.

IV. Commission's Findings and Order Granting Accelerated Approval of 
the Proposed Rule Change

    The Exchange has asked the Commission to approve the proposed rule 
change on an accelerated basis for an additional year so that the pilot 
program may continue uninterrupted. After careful consideration, the 
Commission finds that the proposed rule change is consistent with the 
requirements of section 6 of the Act \8\ and the rules and regulations 
thereunder applicable to a national securities exchange,\9\ and, in 
particular, the requirements of section 6(b)(5) of the Act.\10\ Section 
6(b)(5) requires, among other things, that the rules of a national 
securities exchange be designed to prevent fraudulent and manipulative 
acts and practices, to promote just and equitable principles of trade, 
to remove impediments to and perfect the mechanism of a free and open 
market and a national market system, and, in general, to protect 
investors and the public interest. The Commission notes that the 
current pilot was approved on a one-year basis to give the Commission 
an opportunity to evaluate the impact of the pilot program on the 
options markets to determine whether it would be beneficial to 
customers and to the options markets as a whole before approving any 
request for permanent approval of the pilot program. The Commission 
believes that a one-year extension of the pilot period would provide 
the Commission with additional time to continue evaluate the Exchange's 
Preferred Market-Maker Program.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f.
    \9\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange has requested that the Commission find good cause for 
approving the proposed rule change prior to the thirtieth day after 
publication of notice thereof in the Federal Register. The Commission 
believes that granting accelerated approval of the proposed rule change 
would allow the pilot program to continue without disruption while the 
Commission and the Exchange continue to review the pilot program's 
impact on the options market. Accordingly, the Commission finds good 
cause, consistent with section 19(b)(2) of the Act,\11\ for approving 
the proposed rule change prior to the thirtieth day after publication 
of notice thereof in the Federal Register.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

V. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\12\ that the proposed rule change (SR-CBOE-2006-52), which 
institutes the pilot program through June 2, 2007, is hereby approved 
on an accelerated basis.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E6-8805 Filed 6-6-06; 8:45 am]
BILLING CODE 8010-01-P