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
<![CDATA[
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 (https://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 (https://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 (https://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 (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
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]
-----------------------------------------------------------------------
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.
---------------------------------------------------------------------------
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 (https://
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 (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
[[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
