Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend a Pilot Program That Allows for No Minimum Size Order Requirement for the Price Improvement Period Process on the Boston Options Exchange, 38434-38435 [E6-10533]
Download as PDF
<![CDATA[
38434
Federal Register / Vol. 71, No. 129 / Thursday, July 6, 2006 / Notices
it did in the previous orders,15 that the
de minimis exemption does not relieve
brokers and dealers of their best
execution obligations under the federal
securities laws and SRO rules.
Accordingly, it is ordered, pursuant to
Section 11A of the Act and Rule 608(e)
thereunder,16 that participants of the
ITS Plan and their members are hereby
exempt from Section 8(d) of the ITS
Plan during the period covered by this
Order with respect to transactions in
DIAs and SPYs that are executed at a
price that is no more than three cents
lower than the highest bid displayed in
CQS and no more than three cents
higher than the lowest offer displayed in
CQS. This Order extends the de minimis
exemption from June 29, 2006 through
February 4, 2007.
By the Commission.
Nancy M. Morris,
Secretary.
[FR Doc. E6–10493 Filed 7–5–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54066; File No. SR–BSE–
2006–24]
Self-Regulatory Organizations; Boston
Stock Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change To Extend a
Pilot Program That Allows for No
Minimum Size Order Requirement for
the Price Improvement Period Process
on the Boston Options Exchange
June 29, 2006.
jlentini on PROD1PC65 with NOTICES
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 19,
2006, the Boston Stock Exchange, Inc.
(‘‘BSE’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which items have been prepared
by BSE. The Exchange has designated
the proposed rule change as a ‘‘noncontroversial’’ rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b–4(f)(6) thereunder,4 which
renders the proposal effective upon
filing with the Commission. The
Commission is publishing this notice to
15See
supra notes 3 to 7.
CFR 242.608(e).
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).
16 17
VerDate Aug<31>2005
17:01 Jul 05, 2006
Jkt 208001
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The text of the proposed rule change
is below. Proposed new language is
underlined; proposed deletions are in
[brackets].
*
*
*
*
*
Chapter V, Section 18
Supplementary Material to Section 18
.01 During the extended Pilot Period
[from August 7, 2005 to July 18, 2006],
there will be no minimum size
requirement for Customer Orders to be
eligible for the PIP process. During this
extended Pilot Period, BOXR will
continue to submit certain data,
periodically as required by the
Commission, to provide supporting
evidence that, among other things, there
is meaningful competition for all size
PIP orders, that there is significant price
improvement for all orders executed
through the PIP, and that there is an
active and liquid market functioning on
BOX outside of the PIP mechanism. Any
data which is submitted to the
Commission by BOXR will be provided
on a confidential basis. The Pilot Period
shall expire on July 18, 2007.
.02 No Change.
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
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 a Pilot Program
under the Rules of the Boston Options
Exchange (‘‘BOX’’) for an additional
year. The Pilot Program allows BOX to
have no minimum size requirement for
orders entered into the Price
PO 00000
Frm 00079
Fmt 4703
Sfmt 4703
Improvement Period (‘‘PIP’’) process.5
The proposed rule change retains the
text of Supplementary Material .01 to
Section 18 of Chapter V of the BOX
Rules and seeks to extend the operation
of the PIP Pilot Program until July 18,
2007.
The Exchange notes that the PIP Pilot
Program provides small customer orders
with benefits not available under the
rules of other exchanges. One of the
important factors of the PIP Pilot
Program is that it guarantees members
the right to trade with their customer
orders that are less than 50 contracts. In
particular, any order entered into the
PIP is guaranteed an execution at the
end of the auction at a price at least a
penny better than the national best bid
or offer.
In further support of this proposed
rule change, and as required by the
Original PIP Pilot Program Approval
Order, the Exchange represents that it
has been submitting to the Commission
a monthly PIP Pilot Program Report,
offering detailed data from and analysis
of the PIP Pilot Program.
2. Statutory Basis
The Exchange believes that the data
demonstrates that there is sufficient
investor interest and demand to extend
the Pilot Program for another year. The
Exchange represents that the proposed
rule change is designed to provide
investors with real and significant price
improvement regardless of the size of
the order. Accordingly, the Exchange
believes that the proposal is consistent
with the requirements of Section 6(b) of
the Act,6 in general, and Section 6(b)(5)
of the Act,7 in particular, in that it is
designed to provide price improvement
to any order, which is consistent with
the public interest and protection of
investors from a best execution
standpoint. Additionally, the Exchange
believes that price improvement to any
size order creates competition for the
best execution of all orders, without
unduly burdening competition.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will result in
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
5 The Pilot Program is currently set to expire on
July 18, 2006. See Securities Exchange Act Release
No. 52149 (July 28, 2005), 70 FR 44704 (August 3,
2005). See also Securities Exchange Act Release No.
49068 (January 13, 2004), 69 FR 2768 (January 20,
2004) (‘‘Original PIP Pilot Program Approval
Order’’).
6 15 U.S.C. 78f(b).
7 7 15 U.S.C. 78f(b)(5).
E:\FR\FM\06JYN1.SGM
06JYN1
38435
Federal Register / Vol. 71, No. 129 / Thursday, July 6, 2006 / Notices
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has neither solicited
nor received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has designated the
foregoing rule change as a ‘‘noncontroversial’’ rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act 8 and
Rule 19b–4(f)(6) thereunder 9 because
the rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; or (iii) become operative
for 30 days from the day 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 Exchange asserts
that this proposed rule filing does not
raise any additional or substantive
issues from those raised when the
Exchange sought to implement the Pilot
Program. The Exchange also asserts that
the information provided in the Pilot
Program Reports supports the
representations made at that time.
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
jlentini on PROD1PC65 with NOTICES
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–BSE–2006–24 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–BSE–2006–24. 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 BSE. 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–BSE–2006–24 and should
be submitted on or before July 27, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.10
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6–10533 Filed 7–5–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54067; File No. SR–CBOE–
2006–57]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change to Amend CBOE Rule 8.7
Relating to Bid/Ask Differentials
June 29, 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 21,
2006, the Chicago Board Options
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
Exchange, Incorporated (‘‘CBOE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The CBOE
has filed this proposal pursuant to
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b–4(f)(6) thereunder,4 which
renders the proposal effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
CBOE Rule 8.7, ‘‘Obligations of MarketMakers,’’ relating to bid/ask differentials
in Hybrid and Hybrid 2.0 classes. The
text of the proposed rule change appears
below. Additions are italicized.
*
*
*
*
*
Chicago Board Options Exchange,
Incorporated Rules
*
*
*
*
*
Rule 8.7—Obligations of Market-Makers
Rule 8.7. (a) No change.
(b) No change.
(i)–(iii) No change.
(iv) To price options contracts fairly
by, among other things, bidding and/or
offering in the following manner:
(A) No change.
(B) No change.
(C) Option Classes Trading on the
Hybrid Trading System and Hybrid 2.0
Platform. Except as provided in
subparagraphs (i) and (ii) below, option
classes trading on the Hybrid Trading
System and the Hybrid 2.0 Platform may
be quoted electronically with a
difference not to exceed $5 between the
bid and offer regardless of the price of
the bid. The provisions of Rule
8.7(b)(iv)(A) shall apply to any quotes
given in open outcry in Hybrid classes
and Hybrid 2.0 classes.
i. The $5 bid/ask differential stated in
subparagraph (C) above shall not apply
to at-the-money series or in-the-money
series where the quote width on the
primary market of the underlying
security, or the quote width calculated
by the Exchange or its agent for various
indices pursuant to Interpretation .08, is
wider than $5. For these series, the bid/
ask differential may be as wide as the
quote width on the primary market of
the underlying security or calculated by
the Exchange or its agent, as applicable.
10 17
8 15
U.S.C. 78s(b)(3)(A)(iii).
9 17 CFR 240.19b–4(f)(6).
VerDate Aug<31>2005
17:01 Jul 05, 2006
1 15
Jkt 208001
PO 00000
Frm 00080
Fmt 4703
Sfmt 4703
3 15
4 17
E:\FR\FM\06JYN1.SGM
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
06JYN1
]]>Agencies
[Federal Register Volume 71, Number 129 (Thursday, July 6, 2006)]
[Notices]
[Pages 38434-38435]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-10533]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54066; File No. SR-BSE-2006-24]
Self-Regulatory Organizations; Boston Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Extend a Pilot Program That Allows for No Minimum Size Order
Requirement for the Price Improvement Period Process on the Boston
Options Exchange
June 29, 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 19, 2006, the Boston Stock Exchange, Inc. (``BSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which items have been prepared by BSE. The Exchange has
designated the proposed rule change as a ``non-controversial'' rule
change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule
19b-4(f)(6) thereunder,\4\ which renders the proposal effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\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 text of the proposed rule change is below. Proposed new
language is underlined; proposed deletions are in [brackets].
* * * * *
Chapter V, Section 18
Supplementary Material to Section 18
.01 During the extended Pilot Period [from August 7, 2005 to July
18, 2006], there will be no minimum size requirement for Customer
Orders to be eligible for the PIP process. During this extended Pilot
Period, BOXR will continue to submit certain data, periodically as
required by the Commission, to provide supporting evidence that, among
other things, there is meaningful competition for all size PIP orders,
that there is significant price improvement for all orders executed
through the PIP, and that there is an active and liquid market
functioning on BOX outside of the PIP mechanism. Any data which is
submitted to the Commission by BOXR will be provided on a confidential
basis. The Pilot Period shall expire on July 18, 2007.
.02 No Change.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The 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 a Pilot
Program under the Rules of the Boston Options Exchange (``BOX'') for an
additional year. The Pilot Program allows BOX to have no minimum size
requirement for orders entered into the Price Improvement Period
(``PIP'') process.\5\ The proposed rule change retains the text of
Supplementary Material .01 to Section 18 of Chapter V of the BOX Rules
and seeks to extend the operation of the PIP Pilot Program until July
18, 2007.
---------------------------------------------------------------------------
\5\ The Pilot Program is currently set to expire on July 18,
2006. See Securities Exchange Act Release No. 52149 (July 28, 2005),
70 FR 44704 (August 3, 2005). See also Securities Exchange Act
Release No. 49068 (January 13, 2004), 69 FR 2768 (January 20, 2004)
(``Original PIP Pilot Program Approval Order'').
---------------------------------------------------------------------------
The Exchange notes that the PIP Pilot Program provides small
customer orders with benefits not available under the rules of other
exchanges. One of the important factors of the PIP Pilot Program is
that it guarantees members the right to trade with their customer
orders that are less than 50 contracts. In particular, any order
entered into the PIP is guaranteed an execution at the end of the
auction at a price at least a penny better than the national best bid
or offer.
In further support of this proposed rule change, and as required by
the Original PIP Pilot Program Approval Order, the Exchange represents
that it has been submitting to the Commission a monthly PIP Pilot
Program Report, offering detailed data from and analysis of the PIP
Pilot Program.
2. Statutory Basis
The Exchange believes that the data demonstrates that there is
sufficient investor interest and demand to extend the Pilot Program for
another year. The Exchange represents that the proposed rule change is
designed to provide investors with real and significant price
improvement regardless of the size of the order. Accordingly, the
Exchange believes that the proposal is consistent with the requirements
of Section 6(b) of the Act,\6\ in general, and Section 6(b)(5) of the
Act,\7\ in particular, in that it is designed to provide price
improvement to any order, which is consistent with the public interest
and protection of investors from a best execution standpoint.
Additionally, the Exchange believes that price improvement to any size
order creates competition for the best execution of all orders, without
unduly burdening competition.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 7 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act.
[[Page 38435]]
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has designated the foregoing rule change as a ``non-
controversial'' rule change pursuant to Section 19(b)(3)(A)(iii) of the
Act \8\ and Rule 19b-4(f)(6) thereunder \9\ because the rule change
does not: (i) Significantly affect the protection of investors or the
public interest; (ii) impose any significant burden on competition; or
(iii) become operative for 30 days from the day 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 Exchange
asserts that this proposed rule filing does not raise any additional or
substantive issues from those raised when the Exchange sought to
implement the Pilot Program. The Exchange also asserts that the
information provided in the Pilot Program Reports supports the
representations made at that time.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
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-BSE-2006-24 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-BSE-2006-24. 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 BSE. 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-BSE-2006-24 and should be submitted on or before July 27, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-10533 Filed 7-5-06; 8:45 am]
BILLING CODE 8010-01-P
