Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Short Term Option Series Pilot Program, 35718-35720 [E6-9692]
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jlentini on PROD1PC65 with NOTICES
35718
Federal Register / Vol. 71, No. 119 / Wednesday, June 21, 2006 / Notices
days a copy of the executed bond or any
amendment to the bond, the
independent directors’ resolution
approving the bond, and a statement as
to the period for which premiums have
been paid on the bond. In the case of a
joint insured bond, a fund must also file
(i) a statement showing the amount the
fund would have been required to
maintain under the rule if it were
insured under a single insured bond and
(ii) the agreement between the fund and
all other insured parties regarding
recovery under the bond. A fund must
also notify the Commission in writing
within five days of any claim or
settlement on a claim under the fidelity
bond.
• Notices to Directors.
A fund must notify by registered mail
each member of its board of directors of
(i) any cancellation, termination, or
modification of the fidelity bond at least
45 days prior to the effective date, and
(ii) the filing or settlement of any claim
under the fidelity bond when
notification is filed with the
Commission.
Rule 17g–1’s independent directors’
annual review requirements, fidelity
bond content requirements, joint bond
agreement requirement and the required
notices to directors seek to ensure the
safety of fund assets against losses due
to the conduct of persons who may
obtain access to those assets. These
requirements also seek to facilitate
oversight of a fund’s fidelity bond. The
rule’s required filings with the
Commission are designed to assist the
Commission in monitoring funds’
compliance with the fidelity bond
requirements.
The Commission staff estimates that
approximately 4033 funds are subject to
the requirements of rule 17g–1, and that
on average a fund spends approximately
one hour per year complying with the
rule’s paperwork requirements. The
Commission staff therefore estimates the
total annual burden of the rule’s
paperwork requirements to be 4033
hours.
These estimates of average burden
hours are made solely for the purposes
of the Paperwork Reduction Act. These
estimates are not derived from a
comprehensive or even a representative
survey or study of Commission rules.
The collection of information required
by rule 17g–1 is mandatory and will not
be kept confidential. An agency may not
conduct or sponsor, and a person is not
required to respond to, a collection of
information unless it displays a
currently valid control number.
Written comments are requested on:
(a) Whether the collection of
information is necessary for the proper
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performance of the functions of the
Commission, including whether the
information has practical utility; (b) the
accuracy of the Commission’s estimate
of the burden of the collection of
information; (c) ways to enhance the
quality, utility and clarity of the
information collected; and (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology. Consideration will be given
to comments and suggestions submitted
in writing within 60 days of this
publication.
Please direct your written comments
to R. Corey Booth, Director/Chief
Information Officer, Securities and
Exchange Commission, C/O Shirley
Martinson, 6432 General Green Way,
Alexandria, Virginia, 22312; or send an
e-mail to: PRA_Mailbox@sec.gov.
Dated: June 14, 2006.
Nancy M. Morris,
Secretary.
[FR Doc. E6–9689 Filed 6–20–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53984; File No. SR-CBOE–
2006–48]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend the Short Term
Option Series Pilot Program
June 14, 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 June 13,
2006, the Chicago Board Options
Exchange, Incorporated (‘‘Exchange’’ or
‘‘CBOE’’) 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.
CBOE has designated this proposal as
non-controversial under Section
19(b)(3)(A)(iii) 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.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
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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
CBOE Rules 5.5(d) and 24.9(a)(2) to
extend until July 12, 2007, its pilot
program for listing and trading Short
Term Options Series (‘‘Pilot Program’’).
The text of the proposed rule change is
available on the Exchange’s Web site
(https://www.cboe.com), at the
Exchange’s principal office, 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 is to extend the Pilot Program for
an additional year, through July 12,
2007.5 The Pilot Program allows CBOE
to list and trade Short Term Option
Series, which expire one week after the
date on which a series is opened. Under
the Pilot Program, CBOE may select up
to five approved option classes on
which Short Term Option Series could
be opened.6 A series could be opened
on any Friday that is a business day and
would expire on the next Friday that is
a business day.7 If a Friday were not a
5 The Commission approved the Pilot Program on
July 12, 2005. See Securities Exchange Act Release
No. 52011 (July 12, 2005), 70 FR 41451 (July 19,
2005) (SR–CBOE–2004–63) (‘‘Pilot Program
Approval Order’’). Under Rules 5.5 and 24.9, the
Pilot Program is scheduled to expire on July 12,
2006.
6 A Short Term Option Series could be opened in
any option class that satisfied the applicable listing
criteria under CBOE rules (i.e., stock options,
options on exchange-traded funds as defined under
Interpretation and Policy .06 to CBOE rule 5.3, or
options on indexes). The Exchange could also list
and trade Short Term Option Series on any option
class that is selected by another exchange that
employs a similar pilot program, though to date the
Exchange is not aware of any other exchanges
listing Short Term Option Series.
7 Short Term Option Series are settled in the same
manner as the monthly expiration series in the
same class. Thus, if the monthly option contract for
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business day, the series could be opened
(or would expire) on the first business
day immediately prior to that Friday.
For each class selected for the Pilot
Program, the Exchange usually would
open five Short Term Option Series in
that class for each expiration date. The
strike price of each Short Term Option
Series is fixed at a price per share, with
at least two strike prices above and two
strike prices below the value of the
underlying security or calculated index
value at about the time that the Short
Term Option Series is opened. CBOE
will not open a Short Term Option
Series in the same week that the
corresponding monthly option series is
expiring, because the monthly option
series in its last week before expiration
is functionally equivalent to the Short
Term Option Series. The interval
between strike prices on a Short Term
Option Series is the same as the interval
between strike prices on the
corresponding monthly option series.
Finally, CBOE aggregates a Short Term
Option Series with its corresponding
monthly series for purposes of the
Exchange’s rules on position limits.
The Exchange has selected the
following four option classes to
participate in the Pilot Program: S&P
500 Index options (SPX), S&P 100 Index
American-style options (OEX), MiniS&P 500 Index options (XSP), and S&P
100 Index European-style options
(XEO). CBOE believes the Pilot Program
has been successful and well received
by its members and the investing public.
Thus, CBOE proposes to extend the
Pilot Program through July 12, 2007.
In support of the proposed rule
change, and as required by the Pilot
Program Approval Order, the Exchange
submitted a Pilot Program report (the
‘‘Report’’) to the Commission as Exhibit
3 to its filing. Among other things, the
Report contains data and analysis
regarding the four option classes
included in the Pilot Program. The
Report is available for examination at
the places specified in Item IV below.
The Exchange believes there is
sufficient investor interest and demand
to extend the Pilot Program another
year. The Exchange believes that the
a particular class were A.M.-settled, as most index
options are, the Short Term Option Series for that
class also would be A.M.-settled; if the monthly
option contract for a particular class were P.M.settled, as most non-index options are, the Short
Term Option Series for that class also would be
P.M.-settled. The Exchange notes that certain
monthly expiration index options—specifically,
American- and European-style options on the S&P
100 Index (OEX and XEO, respectively)—are P.M.settled. Therefore, Short Term Option Series in
these series would also be P.M.-settled. Similarly,
Short Term Option Series for a particular class are
physically settled or cash-settled in the same
manner as the monthly option contract in that class.
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Pilot Program has provided investors
with additional means of managing their
risk exposures and carrying out their
investment objectives. Furthermore, the
Exchange has not experienced any
capacity-related problems with respect
to Short Term Option Series.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act 8 in general and
furthers the objectives of Section 6(b)(5)
of the Act 9 in particular in that it is
designed to promote just and equitable
principles of trade, to prevent
fraudulent and manipulative acts, 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 Exchange believes
that extension of the Pilot Program will
result in a continuing benefit to
investors, by allowing them additional
means to manage their risk exposures
and carry out their investment
objectives, and will allow the Exchange
to further study investor interest in
Short Term Option Series.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange 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
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A) of the Act 10 and
subparagraph (f)(6) of Rule 19b–4
thereunder.11 Because the foregoing
proposed rule change (i) Does not
significantly affect the protection of
investors or the public interest; (ii) does
not impose any significant burden on
competition; and (iii) does not become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, if
consistent with the protection of
8 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
10 15 U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(F)(6).
9 15
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35719
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder. As required under Rule
19b–4(f)(6)(iii), the Exchange provided
the Commission with written notice of
its intent to file the proposed rule
change at least five business before
doing so.
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing. However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has asked the Commission to
waive the operative delay to permit the
Pilot Program extension to become
effective prior to the 30th day after
filing.12
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because it will allow the benefits of the
Pilot Program to continue without
interruption.13 Therefore, the
Commission designates that the
proposal will become operative on July
12, 2006.14
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
the rule change if it appears to the
12 Telephone conversation between Jennifer
Lamie, Managing Senior Attorney, CBOE, and
Nathan Saunders, Special Counsel, Division of
Market Regulation, Commission, June 13, 2006.
13 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
14 As set forth in the Commission’s original
release providing notice of the Pilot Program, if the
Exchange were to propose an extension, an
expansion, or permanent approval of the Pilot
Program, the Exchange would submit, along with
any filing proposing such amendments to the
program, a report that would provide an analysis of
the Pilot Program covering the entire period during
which the Pilot Program was in effect. The report
would include, at a minimum: (1) Data and written
analysis on the open interest and trading volume in
the classes for which Short Term Option Series
were opened; (2) an assessment of the
appropriateness of the option classes selected for
the Pilot Program; (3) an assessment of the impact
of the Pilot Program on the capacity of CBOE,
OPRA, and market data vendors (to the extent data
from market data vendors is available); (4) any
capacity problems or other problems that arose
during the operation of the Pilot Program and how
CBOE addressed such problems; (5) any complaints
that CBOE received during the operation of the Pilot
Program and how CBOE addressed them; and (6)
any additional information that would assist in
assessing the operation of the Pilot Program. The
report must be submitted to the Commission at least
sixty (60) days prior to the expiration date of the
Pilot Program. See Securities Exchange Act Release
No. 51172 (February 9, 2005), 70 FR 7979, 7980
(February 16, 2005) (SR–CBOE–2004–63).
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Federal Register / Vol. 71, No. 119 / Wednesday, June 21, 2006 / Notices
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
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.15
Nancy M. Morris,
Secretary.
[FR Doc. E6–9692 Filed 6–20–06; 8:45 am]
BILLING CODE 8010–01–P
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
No. SR–CBOE–2006–48 on the subject
line.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53982; File No. SR–NASD–
2006–063]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change and Amendment No. 1
Thereto Relating to Fee for Extension
of Time Requests
June 14, 2006.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
• Send paper comments in triplicate
notice is hereby given that on May 15,
to Nancy M. Morris, Secretary,
2006, the National Association of
Securities and Exchange Commission,
Securities Dealers, Inc. (‘‘NASD’’) filed
with the Securities and Exchange
100 F Street, NE., Washington, DC
Commission (‘‘SEC’’ or ‘‘Commission’’)
20549–1090.
the proposed rule change as described
All submissions should refer to File
in Items I, II, and III below, which Items
Number SR–CBOE–2006–48. This file
have been prepared by NASD. On May
number should be included on the
25, 2006, NASD filed Amendment No.
subject line if e-mail is used. To help the
1 to the proposed rule change.3 NASD
Commission process and review your
has designated this proposal as one
comments more efficiently, please use
establishing or changing a due, fee, or
only one method. The Commission will
other charge under section
post all comments on the Commission’s 19(b)(3)(A)(ii) of the Act 4 and Rule 19b–
Internet Web site (https://www.sec.gov/
4(f)(2) thereunder,5 which renders the
rules/sro.shtml). Copies of the
proposal effective upon filing with
submission, all subsequent
Commission. The Commission is
amendments, all written statements
publishing this notice to solicit
with respect to the proposed rule
comments on the proposed rule change,
change that are filed with the
as amended, from interested persons.
Commission, and all written
I. Self-Regulatory Organization’s
communications relating to the
Statement of the Terms of Substance of
proposed rule change between the
Commission and any person, other than the Proposed Rule Change
those that may be withheld from the
NASD is proposing to amend Section
public in accordance with the
8 of Schedule A to NASD’s By-Laws to
provisions of 5 U.S.C. 552, will be
increase the service charge for
available for inspection and copying in
processing extension requests to $4.00
the Commission’s Public Reference
per request. Below is the text of the
Room. Copies of such filing also will be proposed rule change. Proposed new
available for inspection and copying at
language is in italics; proposed
the principal office of the Exchange. All deletions are in brackets.
comments received will be posted
*
*
*
*
*
without change; the Commission does
not edit personal identifying
15 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
information from submissions. You
2 17 CFR 240.19b–4.
should submit only information that
3 In Amendment No. 1, NASD made nonyou wish to make available publicly. All
substantive changes to the discussion of the
submissions should refer to File
purpose of the proposed rule filing.
Number SR–CBOE–2006–48 and should
4 15 U.S.C. 78s(b)(3)(A)(ii).
be submitted on or before July 12, 2006.
5 17 CFR 240.19b–4(f)(2).
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Paper Comments
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SCHEDULE A TO NASD BY-LAWS
*
*
*
*
*
Section 8—Service Charge for
Processing Extension of Time Requests
(a) No Change.
(b) The service charge for processing
each initial extension of time request
and for all subsequent extension of time
requests (1) involving the same
transaction under Regulation T and/or
(2) involving an extension of time
previously granted pursuant to SEC
Rule 15c3–3(n) shall be [$2.00;
provided, however, that the service
charge shall be $1.00 for extension of
time requests filed electronically by
members using NASD’s Automated
Regulatory Reporting System]$4.00 per
request.
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
NASD 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. NASD 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
Regulation T, issued by the Board of
Governors of the Federal Reserve
System (‘‘FRB’’) pursuant to the Act,
among other things, governs the
extension of credit to customers by
broker-dealers for purchasing
securities.6 Rule 15c3–3 under the Act
governs, among other things, the time
period in which broker-dealers must
complete sell orders on behalf of
customers.7 Under SEC Rule 15c3–3(n),
a self-regulatory organization (‘‘SRO’’)
may grant a broker-dealer an extension
of time for delivery on sales of securities
6 12 CFR 220.4(c) and 220.8(d). Regulation T
generally requires that customers with a cash
account pay for securities within five business days
of purchase; for customers with a margin account,
there must be sufficient minimum margin (typically
50%) to support the purchase.
7 17 CFR 240.15c3–3. In particular, Rule 15c3–
3(m) requires a broker-dealer that executes a
customer sell order to obtain possession of the
securities within ten business days of the settlement
date or to close the transaction by purchasing the
securities.
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]]>Agencies
[Federal Register Volume 71, Number 119 (Wednesday, June 21, 2006)]
[Notices]
[Pages 35718-35720]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-9692]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53984; File No. SR-CBOE-2006-48]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Extend the Short Term Option Series Pilot Program
June 14, 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 June 13, 2006, the Chicago Board Options Exchange, Incorporated
(``Exchange'' or ``CBOE'') 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.
CBOE has designated this proposal as non-controversial under Section
19(b)(3)(A)(iii) 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend CBOE Rules 5.5(d) and 24.9(a)(2) to
extend until July 12, 2007, its pilot program for listing and trading
Short Term Options Series (``Pilot Program''). The text of the proposed
rule change is available on the Exchange's Web site (https://
www.cboe.com), at the Exchange's principal office, 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 is to extend the Pilot
Program for an additional year, through July 12, 2007.\5\ The Pilot
Program allows CBOE to list and trade Short Term Option Series, which
expire one week after the date on which a series is opened. Under the
Pilot Program, CBOE may select up to five approved option classes on
which Short Term Option Series could be opened.\6\ A series could be
opened on any Friday that is a business day and would expire on the
next Friday that is a business day.\7\ If a Friday were not a
[[Page 35719]]
business day, the series could be opened (or would expire) on the first
business day immediately prior to that Friday.
---------------------------------------------------------------------------
\5\ The Commission approved the Pilot Program on July 12, 2005.
See Securities Exchange Act Release No. 52011 (July 12, 2005), 70 FR
41451 (July 19, 2005) (SR-CBOE-2004-63) (``Pilot Program Approval
Order''). Under Rules 5.5 and 24.9, the Pilot Program is scheduled
to expire on July 12, 2006.
\6\ A Short Term Option Series could be opened in any option
class that satisfied the applicable listing criteria under CBOE
rules (i.e., stock options, options on exchange-traded funds as
defined under Interpretation and Policy .06 to CBOE rule 5.3, or
options on indexes). The Exchange could also list and trade Short
Term Option Series on any option class that is selected by another
exchange that employs a similar pilot program, though to date the
Exchange is not aware of any other exchanges listing Short Term
Option Series.
\7\ Short Term Option Series are settled in the same manner as
the monthly expiration series in the same class. Thus, if the
monthly option contract for a particular class were A.M.-settled, as
most index options are, the Short Term Option Series for that class
also would be A.M.-settled; if the monthly option contract for a
particular class were P.M.-settled, as most non-index options are,
the Short Term Option Series for that class also would be P.M.-
settled. The Exchange notes that certain monthly expiration index
options--specifically, American- and European-style options on the
S&P 100 Index (OEX and XEO, respectively)--are P.M.-settled.
Therefore, Short Term Option Series in these series would also be
P.M.-settled. Similarly, Short Term Option Series for a particular
class are physically settled or cash-settled in the same manner as
the monthly option contract in that class.
---------------------------------------------------------------------------
For each class selected for the Pilot Program, the Exchange usually
would open five Short Term Option Series in that class for each
expiration date. The strike price of each Short Term Option Series is
fixed at a price per share, with at least two strike prices above and
two strike prices below the value of the underlying security or
calculated index value at about the time that the Short Term Option
Series is opened. CBOE will not open a Short Term Option Series in the
same week that the corresponding monthly option series is expiring,
because the monthly option series in its last week before expiration is
functionally equivalent to the Short Term Option Series. The interval
between strike prices on a Short Term Option Series is the same as the
interval between strike prices on the corresponding monthly option
series. Finally, CBOE aggregates a Short Term Option Series with its
corresponding monthly series for purposes of the Exchange's rules on
position limits.
The Exchange has selected the following four option classes to
participate in the Pilot Program: S&P 500 Index options (SPX), S&P 100
Index American-style options (OEX), Mini-S&P 500 Index options (XSP),
and S&P 100 Index European-style options (XEO). CBOE believes the Pilot
Program has been successful and well received by its members and the
investing public. Thus, CBOE proposes to extend the Pilot Program
through July 12, 2007.
In support of the proposed rule change, and as required by the
Pilot Program Approval Order, the Exchange submitted a Pilot Program
report (the ``Report'') to the Commission as Exhibit 3 to its filing.
Among other things, the Report contains data and analysis regarding the
four option classes included in the Pilot Program. The Report is
available for examination at the places specified in Item IV below.
The Exchange believes there is sufficient investor interest and
demand to extend the Pilot Program another year. The Exchange believes
that the Pilot Program has provided investors with additional means of
managing their risk exposures and carrying out their investment
objectives. Furthermore, the Exchange has not experienced any capacity-
related problems with respect to Short Term Option Series.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \8\ in general and furthers the objectives
of Section 6(b)(5) of the Act \9\ in particular in that it is designed
to promote just and equitable principles of trade, to prevent
fraudulent and manipulative acts, 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
Exchange believes that extension of the Pilot Program will result in a
continuing benefit to investors, by allowing them additional means to
manage their risk exposures and carry out their investment objectives,
and will allow the Exchange to further study investor interest in Short
Term Option Series.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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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 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
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \10\ and subparagraph (f)(6) of Rule 19b-4
thereunder.\11\ Because the foregoing proposed rule change (i) Does not
significantly affect the protection of investors or the public
interest; (ii) does not impose any significant burden on competition;
and (iii) does not become operative for 30 days from the date on which
it was filed, or such shorter time as the Commission may designate, if
consistent with the protection of investors and the public interest,
the proposed rule change has become effective pursuant to Section
19(b)(3)(A) of the Act and Rule 19b-4(f)(6)(iii) thereunder. As
required under Rule 19b-4(f)(6)(iii), the Exchange provided the
Commission with written notice of its intent to file the proposed rule
change at least five business before doing so.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(F)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange has asked the Commission to waive the
operative delay to permit the Pilot Program extension to become
effective prior to the 30th day after filing.\12\
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\12\ Telephone conversation between Jennifer Lamie, Managing
Senior Attorney, CBOE, and Nathan Saunders, Special Counsel,
Division of Market Regulation, Commission, June 13, 2006.
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because it will allow the benefits of the Pilot Program to continue
without interruption.\13\ Therefore, the Commission designates that the
proposal will become operative on July 12, 2006.\14\
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\13\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
\14\ As set forth in the Commission's original release providing
notice of the Pilot Program, if the Exchange were to propose an
extension, an expansion, or permanent approval of the Pilot Program,
the Exchange would submit, along with any filing proposing such
amendments to the program, a report that would provide an analysis
of the Pilot Program covering the entire period during which the
Pilot Program was in effect. The report would include, at a minimum:
(1) Data and written analysis on the open interest and trading
volume in the classes for which Short Term Option Series were
opened; (2) an assessment of the appropriateness of the option
classes selected for the Pilot Program; (3) an assessment of the
impact of the Pilot Program on the capacity of CBOE, OPRA, and
market data vendors (to the extent data from market data vendors is
available); (4) any capacity problems or other problems that arose
during the operation of the Pilot Program and how CBOE addressed
such problems; (5) any complaints that CBOE received during the
operation of the Pilot Program and how CBOE addressed them; and (6)
any additional information that would assist in assessing the
operation of the Pilot Program. The report must be submitted to the
Commission at least sixty (60) days prior to the expiration date of
the Pilot Program. See Securities Exchange Act Release No. 51172
(February 9, 2005), 70 FR 7979, 7980 (February 16, 2005) (SR-CBOE-
2004-63).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate the rule change if it
appears to the
[[Page 35720]]
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:
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 No. SR-CBOE-2006-48 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-2006-48. 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 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-2006-48 and should be submitted on or before July
12, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-9692 Filed 6-20-06; 8:45 am]
BILLING CODE 8010-01-P
