Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to Changes to the Minimum Activity Charge, 39376-39378 [E6-10922]
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39376
Federal Register / Vol. 71, No. 133 / Wednesday, July 12, 2006 / Notices
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–Amex–2006–47 and should
be submitted on or before August 2,
2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.15
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6–10921 Filed 7–11–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
language is in italics; proposed
deletions are in [brackets].
[Release No. 34–54105; File No. SR–BSE–
2006–12]
Boston Options Exchange Facility
Self-Regulatory Organizations; Boston
Stock Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change and
Amendment No. 1 Thereto Relating to
Changes to the Minimum Activity
Charge
(as of July 2006)
July 6, 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 23,
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 the Exchange. On June 30,
2006, the Exchange filed Amendment
No. 1 to the proposed rule change.3 The
Exchange filed the proposal pursuant to
Section 19(b)(3)(A)(ii) of the Act 4 and
Rule 19b–4(f)(2) thereunder,5 which
renders the proposal effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change, as amended, from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
With respect to the BOX Fee
Schedule, the Exchange proposes to (a)
amend the Minimum Activity Charge
(‘‘MAC’’) for certain classes of options,
(b) exempt new BOX Market Makers
from the MAC for the first three months
as a BOX participant, (c) change the
frequency at which the MAC
classifications will be adjusted
annually, and (d) change the indexing of
the MAC Applicable Rates from overall
market share to class-by-class market
share. The text of the proposed rule
change is below. Proposed new
Fee Schedule
Sec. 1 through Sec. 2 No Change.
Sec. 3 Market Maker Trading Fees
a. No Change.
b. Minimum Activity Charge (‘‘MAC’’)
The ‘‘notional MAC’’ per options class
(see table below) is the building block
for the determination of the BOX Market
Maker’s monthly total MAC which is
payable at the end of each month if the
per contract fee of $ 0.20 per contract
traded, when multiplied by the Market
Maker’s actual trade executions for the
month, does not result in a total trading
fee payable to BOX at least equal to the
monthly total MAC.
New Market Maker’s activity will be
subject to the standard Market Maker
per contract charge. However, new
Market Makers to BOX will be exempt
from the MAC during the first three
months as a BOX market participant.
The MAC is totaled across all classes
assigned to a Market Maker so that
volume for one class is fungible against
other classes for that Market Maker. As
a result, although the volume on a given
class needed to reach an implicit cost of
$0.20 a contract may not be achieved,
this can be compensated by volume in
excess of the MAC on another class.
1. MAC ‘‘Levels’’
a. For Classes that have been trading
on any options exchange for at least six
calendar months.
The table below provides the MAC for
each of the six ‘‘categories’’ of options
classes listed by BOX. The category for
each class is determined by its total
trading volume across all U.S. options
exchanges as determined by OCC data.
The classifications will be adjusted at
least [twice] annually (in January [and
July], based on the average daily volume
for the preceding [six month period]
year).
sroberts on PROD1PC70 with NOTICES
Class
OCC average daily volume
(number of contracts)
Category:
A ..................................................
B ..................................................
C ..................................................
D ..................................................
E ..................................................
>100,000 ........................................................................................................
50,000 to 99,999 ............................................................................................
25,000 to 49,999 ............................................................................................
10,000 to 24,999 ............................................................................................
5,000 to 9,999 ................................................................................................
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 In Amendment No. 1, the Exchange (a) clarified
in the proposed rule text that all Boston Options
1 15
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18:23 Jul 11, 2006
Jkt 208001
Exchange (‘‘BOX’’) Market Makers would be
continually subject to the standard per contract
charge, (b) made non-substantive, formatting
changes to conform the proposed rule text with the
current provisions of the Fee Schedule, and (c)
PO 00000
Frm 00097
Fmt 4703
Sfmt 4703
MAC per Market Maker per
appointment per month
[$15,000] $10,000
[$3,000] $3,500
[$2,000] $2,500
$750
$250
clarified the purpose and scope of the proposed rule
change.
4 15 U.S.C. 78s(b)(3)(A)(ii).
5 17 CFR 240.19b–4(f)(2).
E:\FR\FM\12JYN1.SGM
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Federal Register / Vol. 71, No. 133 / Wednesday, July 12, 2006 / Notices
OCC average daily volume
(number of contracts)
Class
F ..................................................
the MAC will be applied the date the
class is listed on BOX.
Any MAC that becomes applicable on
a day other than the first trading day of
a calendar month is applied on a pro
rata basis based on the number of
trading days in that month for which the
class was traded on BOX.
Furthermore, the MAC will be
‘‘indexed’’ to BOX’s [overall] market
share as determined by OCC clearing
volumes on a class-by-class basis. At the
beginning of each calendar month, BOX
will calculate its market share for the
previous month (market share equals
total BOX traded volume divided by the
total OCC cleared volume for the classes
that BOX has listed). If BOX’s [overall]
market share in that particular class is
less than 10%, BOX will reduce the
MAC applicable for each Market Maker
according to the following table.
[BOX market share]
[0% to 4.99%] ...........
[5% to 9.99%] ...........
[10% and more] ........
Market share
[MAC applicable rate]
[33.3%]
[66.7%]
[Full MAC]
MAC applicable rate
sroberts on PROD1PC70 with NOTICES
2. MAC ‘‘Adjustments’’
With respect to market makers
appointed to classes traded by BOX
Market Makers on the date of such
appointment, if the market maker is not
already a BOX Market Maker in at least
one other class, the MAC will be
applied the earlier of either (i) the date
the Market Maker commences quoting
the class, or (ii) three months after the
date of such appointment. However, if
the market maker is already a BOX
Market Maker in at least one other class,
the MAC will not be applied until the
earlier of either (i) the date the Market
Maker commences quoting the class, or
(ii) the eleventh trading day after the
date of such appointment.
With respect to market makers
appointed to classes not traded by BOX
Market Makers on the date of such
appointment, if the market maker is not
already a BOX Market Maker in at least
one other class, the MAC will be
applied [the earlier of either (i) the date
the Market Maker commences quoting
the class, or (ii)] three months after the
date of such appointment. However, if
the market maker is already a BOX
Market Maker in at least one other class,
VerDate Aug<31>2005
18:23 Jul 11, 2006
MAC per Market Maker per
appointment per month
Less than 5,000 .............................................................................................
b. For classes that have not been
trading on any options exchange for at
least six calendar months.
A class will not be placed into a MAC
category until a class has been trading
on any options exchange for a full
calendar month. After a class has been
trading for a full calendar month, the
MAC category for such class will be
determined, applying the criteria set
forth in the table above, based on the
average daily volume for such full
calendar month across all U.S. options
exchanges as determined by OCC data.
The classification will be adjusted at the
beginning of each new calendar month
thereafter based on the average daily
trading volume for the previous
calendar months in which the options
class was traded for the entire month,
until the class has been trading for six
full calendar months. Thereafter, the
classification will be adjusted at least
[twice] annually (in January [and July],
based on the average daily volume for
the preceding [six month period] year)
as set forth in subsection 1.a. above.
Until an options class is placed in a
MAC category, only per contract trade
execution fees will apply to trades in
that class.
Jkt 208001
0% to
2% to
4% to
5% to
6% to
8% to
10%+
1.99% .............
3.99% .............
4.99% .............
5.99% .............
7.99% .............
9.99% .............
.........................
$.20 per contract
20%
40%
40%
60%
80%
100%
These adjustments are subject to
subsection 1.b. above.
*
*
*
*
*
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.
PO 00000
Frm 00098
Fmt 4703
Sfmt 4703
39377
$100
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
BOX levies a monthly fixed fee to its
participant Market Makers for each
option class traded by such participants.
BOX classifies its traded classes into six
categories (A through F), and the fee for
each category is determined by overall
OCC cleared volume. For example,
classes trading less than 5,000 average
daily OCC cleared contracts are assigned
to category F, classes trading between
5,000 and 9,999 average daily OCC
cleared contracts are assigned to
category E, etc. The MAC amounts
increase with higher traded volumes
and range from $100 per month for
Category F to $15,000 per month for
Category A. Monthly discounts are
subsequently applied to each firm’s
MAC based on overall OCC market
share that BOX achieves on a monthly
basis. The following are proposed
changes to the MAC:
(a) Changes to the Activity Levels:
BSE proposes to amend BOX’s Fee
Schedule to account for the effect that
current market conditions have had on
the MAC. Recent increases in options
trading have resulted in many BOX
listed classes to be reclassified into
higher MAC categories. BOX therefore
seeks to amend its existing MAC
program to modify the MAC for certain
classes of options and provide uniform
fee adjustments to BOX’s participants.
No changes are being sought to alter the
fundamental structure of the existing
MAC program.
(b) Exemption for New Market
Makers:
BSE proposes to exempt new Market
Makers from the MAC for the first three
months as a BOX participant. BSE
believes that it would be more equitable
to allow new Market Maker participants
to become familiar with BOX before
imposing a fee based on a minimum
level of activity.
(c) Changing the Frequency of MAC
Reclassifications:
BSE proposes to change the frequency
of MAC reclassifications from at least
twice annually to at least once annually.
BSE believes that this change would
lessen the impact that market volatility
has on BOX market participants.
(d) Indexing the MAC on a Class-byClass Basis:
E:\FR\FM\12JYN1.SGM
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39378
Federal Register / Vol. 71, No. 133 / Wednesday, July 12, 2006 / Notices
BSE proposes to change the indexing
of the MAC from overall market share to
class-by-class market share. BSE
believes that this new structure would
be more equitable and that Market
Makers should pay for the level of
liquidity in each class in which they
trade.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the requirements of Section 6(b) of the
Act,6 in general, and furthers the
objectives of Section 6(b)(4) of the Act,7
in particular, because it is designed to
provide for the equitable allocation of
reasonable dues, fees, and other charges
among members of the Exchange.
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
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 foregoing proposed rule change,
which has been designated as a fee
change pursuant to Section
19(b)(3)(A)(ii) of the Act 8 and Rule 19b–
4(f)(2) 9 thereunder, is effective upon
filing with the Commission. 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.10
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
6 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
8 15 U.S.C. 78s(b)(3)(A)(ii).
9 17 CFR 240.19b–4(f)(2).
10 The effective date of the original proposed rule
change is June 23, 2006, and the effective date of
Amendment No. 1 is June 30, 2006. For purposes
of calculating the 60-day period within which the
Commission may summarily abrogate the proposed
rule change under Section 19(b)(3)(C) of the Act, the
Commission considers such period to commence on
June 30, 2006, the date on which the Exchange filed
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
sroberts on PROD1PC70 with NOTICES
7 15
VerDate Aug<31>2005
18:23 Jul 11, 2006
Jkt 208001
arguments concerning the foregoing,
including whether the proposed rule
change, as amended, is consistent with
the Act. Comments may be submitted by
any of the following methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Order
Approving Proposed Rule Change
Relating to Participant Fees and
Credits
• 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–BSE–2006–12 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File No.
SR–BSE–2006–12. 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 will also 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 No.
SR–BSE–2006–12 and should be
submitted on or before August 2, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.11
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6–10922 Filed 7–11–06; 8:45 am]
BILLING CODE 8010–01–P
PO 00000
11 17
CFR 200.30–3(a)(12).
Frm 00099
Fmt 4703
Sfmt 4703
[Release No. 34–54100; File No. SR–CHX–
2006–13]
July 5, 2006.
On April 24, 2006, the Chicago Stock
Exchange, Inc. (‘‘CHX’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to amend its Participant Fee
Schedule (‘‘Fee Schedule’’) to reduce,
retroactively to March 1, 2006, the
assignment fees charged to specialist
firms seeking the right to trade
securities, when the securities are
assigned in competition with other
firms. The proposed rule change was
published for comment in the Federal
Register on June 1, 2006.3 The
Commission received no comments
regarding the proposal.
The Commission finds that the
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to a national securities
exchange, and in particular, with
section 6(b)(4) of the Act,4 which
requires that the rules of the Exchange
provide for the equitable allocation of
reasonable dues, fees and other charges
among its members and other persons
using its facilities.5 The proposed
retroactive fee reduction was filed
simultaneously with, and is identical to,
a fee reduction applied by the Exchange
prospectively as of April 24, 2006.6 That
fee reduction was based on the
Exchange’s belief that the right to trade
securities as an Exchange specialist has
only a short-term benefit, in view of an
Exchange proposal pending with the
Commission to implement a new
trading model that does not involve the
use of specialists to handle customer
orders.7 The Exchange believes that it is
appropriate to apply the fee reduction
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 53868
(May 25, 2006), 71 FR 31242.
4 15 U.S.C. 78f(b)(4).
5 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition and capital
formation. See 15 U.S.C. 78c(f).
6 See Securities Exchange Act Release No. 53781
(May 10, 2006), 71 FR 28727 (May 17, 2006) (notice
and immediate effectiveness of SR–CHX–2006–12).
7 See SR–CHX–2006–05.
2 17
E:\FR\FM\12JYN1.SGM
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]]>Agencies
[Federal Register Volume 71, Number 133 (Wednesday, July 12, 2006)]
[Notices]
[Pages 39376-39378]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-10922]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54105; File No. SR-BSE-2006-12]
Self-Regulatory Organizations; Boston Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
and Amendment No. 1 Thereto Relating to Changes to the Minimum Activity
Charge
July 6, 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 23, 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 the Exchange. On June
30, 2006, the Exchange filed Amendment No. 1 to the proposed rule
change.\3\ The Exchange filed the proposal pursuant to Section
19(b)(3)(A)(ii) of the Act \4\ and Rule 19b-4(f)(2) thereunder,\5\
which renders the proposal effective upon filing with the Commission.
The Commission is publishing this notice to solicit comments on the
proposed rule change, as amended, from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ In Amendment No. 1, the Exchange (a) clarified in the
proposed rule text that all Boston Options Exchange (``BOX'') Market
Makers would be continually subject to the standard per contract
charge, (b) made non-substantive, formatting changes to conform the
proposed rule text with the current provisions of the Fee Schedule,
and (c) clarified the purpose and scope of the proposed rule change.
\4\ 15 U.S.C. 78s(b)(3)(A)(ii).
\5\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
With respect to the BOX Fee Schedule, the Exchange proposes to (a)
amend the Minimum Activity Charge (``MAC'') for certain classes of
options, (b) exempt new BOX Market Makers from the MAC for the first
three months as a BOX participant, (c) change the frequency at which
the MAC classifications will be adjusted annually, and (d) change the
indexing of the MAC Applicable Rates from overall market share to
class-by-class market share. The text of the proposed rule change is
below. Proposed new language is in italics; proposed deletions are in
[brackets].
Boston Options Exchange Facility
Fee Schedule
(as of July 2006)
Sec. 1 through Sec. 2 No Change.
Sec. 3 Market Maker Trading Fees
a. No Change.
b. Minimum Activity Charge (``MAC'')
The ``notional MAC'' per options class (see table below) is the
building block for the determination of the BOX Market Maker's monthly
total MAC which is payable at the end of each month if the per contract
fee of $ 0.20 per contract traded, when multiplied by the Market
Maker's actual trade executions for the month, does not result in a
total trading fee payable to BOX at least equal to the monthly total
MAC.
New Market Maker's activity will be subject to the standard Market
Maker per contract charge. However, new Market Makers to BOX will be
exempt from the MAC during the first three months as a BOX market
participant.
The MAC is totaled across all classes assigned to a Market Maker so
that volume for one class is fungible against other classes for that
Market Maker. As a result, although the volume on a given class needed
to reach an implicit cost of $0.20 a contract may not be achieved, this
can be compensated by volume in excess of the MAC on another class.
1. MAC ``Levels''
a. For Classes that have been trading on any options exchange for
at least six calendar months.
The table below provides the MAC for each of the six ``categories''
of options classes listed by BOX. The category for each class is
determined by its total trading volume across all U.S. options
exchanges as determined by OCC data. The classifications will be
adjusted at least [twice] annually (in January [and July], based on the
average daily volume for the preceding [six month period] year).
----------------------------------------------------------------------------------------------------------------
OCC average daily volume MAC per Market Maker per appointment per
Class (number of contracts) month
----------------------------------------------------------------------------------------------------------------
Category:
A................................ >100,000..................... [$15,000] $10,000
B................................ 50,000 to 99,999............. [$3,000] $3,500
C................................ 25,000 to 49,999............. [$2,000] $2,500
D................................ 10,000 to 24,999............. $750
E................................ 5,000 to 9,999............... $250
[[Page 39377]]
F................................ Less than 5,000.............. $100
----------------------------------------------------------------------------------------------------------------
b. For classes that have not been trading on any options exchange
for at least six calendar months.
A class will not be placed into a MAC category until a class has
been trading on any options exchange for a full calendar month. After a
class has been trading for a full calendar month, the MAC category for
such class will be determined, applying the criteria set forth in the
table above, based on the average daily volume for such full calendar
month across all U.S. options exchanges as determined by OCC data. The
classification will be adjusted at the beginning of each new calendar
month thereafter based on the average daily trading volume for the
previous calendar months in which the options class was traded for the
entire month, until the class has been trading for six full calendar
months. Thereafter, the classification will be adjusted at least
[twice] annually (in January [and July], based on the average daily
volume for the preceding [six month period] year) as set forth in
subsection 1.a. above. Until an options class is placed in a MAC
category, only per contract trade execution fees will apply to trades
in that class.
2. MAC ``Adjustments''
With respect to market makers appointed to classes traded by BOX
Market Makers on the date of such appointment, if the market maker is
not already a BOX Market Maker in at least one other class, the MAC
will be applied the earlier of either (i) the date the Market Maker
commences quoting the class, or (ii) three months after the date of
such appointment. However, if the market maker is already a BOX Market
Maker in at least one other class, the MAC will not be applied until
the earlier of either (i) the date the Market Maker commences quoting
the class, or (ii) the eleventh trading day after the date of such
appointment.
With respect to market makers appointed to classes not traded by
BOX Market Makers on the date of such appointment, if the market maker
is not already a BOX Market Maker in at least one other class, the MAC
will be applied [the earlier of either (i) the date the Market Maker
commences quoting the class, or (ii)] three months after the date of
such appointment. However, if the market maker is already a BOX Market
Maker in at least one other class, the MAC will be applied the date the
class is listed on BOX.
Any MAC that becomes applicable on a day other than the first
trading day of a calendar month is applied on a pro rata basis based on
the number of trading days in that month for which the class was traded
on BOX.
Furthermore, the MAC will be ``indexed'' to BOX's [overall] market
share as determined by OCC clearing volumes on a class-by-class basis.
At the beginning of each calendar month, BOX will calculate its market
share for the previous month (market share equals total BOX traded
volume divided by the total OCC cleared volume for the classes that BOX
has listed). If BOX's [overall] market share in that particular class
is less than 10%, BOX will reduce the MAC applicable for each Market
Maker according to the following table.
------------------------------------------------------------------------
[BOX market share] [MAC applicable rate]
------------------------------------------------------------------------
[0% to 4.99%]............................. [33.3%]
[5% to 9.99%]............................. [66.7%]
[10% and more]............................ [Full MAC]
------------------------------------------------------------------------
------------------------------------------------------------------------
Market share MAC applicable rate
------------------------------------------------------------------------
0% to 1.99%............................... $.20 per contract
2% to 3.99%............................... 20%
4% to 4.99%............................... 40%
5% to 5.99%............................... 40%
6% to 7.99%............................... 60%
8% to 9.99%............................... 80%
10%+...................................... 100%
------------------------------------------------------------------------
These adjustments are subject to subsection 1.b. above.
* * * * *
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
BOX levies a monthly fixed fee to its participant Market Makers for
each option class traded by such participants. BOX classifies its
traded classes into six categories (A through F), and the fee for each
category is determined by overall OCC cleared volume. For example,
classes trading less than 5,000 average daily OCC cleared contracts are
assigned to category F, classes trading between 5,000 and 9,999 average
daily OCC cleared contracts are assigned to category E, etc. The MAC
amounts increase with higher traded volumes and range from $100 per
month for Category F to $15,000 per month for Category A. Monthly
discounts are subsequently applied to each firm's MAC based on overall
OCC market share that BOX achieves on a monthly basis. The following
are proposed changes to the MAC:
(a) Changes to the Activity Levels:
BSE proposes to amend BOX's Fee Schedule to account for the effect
that current market conditions have had on the MAC. Recent increases in
options trading have resulted in many BOX listed classes to be
reclassified into higher MAC categories. BOX therefore seeks to amend
its existing MAC program to modify the MAC for certain classes of
options and provide uniform fee adjustments to BOX's participants. No
changes are being sought to alter the fundamental structure of the
existing MAC program.
(b) Exemption for New Market Makers:
BSE proposes to exempt new Market Makers from the MAC for the first
three months as a BOX participant. BSE believes that it would be more
equitable to allow new Market Maker participants to become familiar
with BOX before imposing a fee based on a minimum level of activity.
(c) Changing the Frequency of MAC Reclassifications:
BSE proposes to change the frequency of MAC reclassifications from
at least twice annually to at least once annually. BSE believes that
this change would lessen the impact that market volatility has on BOX
market participants.
(d) Indexing the MAC on a Class-by-Class Basis:
[[Page 39378]]
BSE proposes to change the indexing of the MAC from overall market
share to class-by-class market share. BSE believes that this new
structure would be more equitable and that Market Makers should pay for
the level of liquidity in each class in which they trade.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the requirements of Section 6(b) of the Act,\6\ in general, and
furthers the objectives of Section 6(b)(4) of the Act,\7\ in
particular, because it is designed to provide for the equitable
allocation of reasonable dues, fees, and other charges among members of
the Exchange.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any 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 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 foregoing proposed rule change, which has been designated as a
fee change pursuant to Section 19(b)(3)(A)(ii) of the Act \8\ and Rule
19b-4(f)(2) \9\ thereunder, is effective upon filing with the
Commission. 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.\10\
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\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 17 CFR 240.19b-4(f)(2).
\10\ The effective date of the original proposed rule change is
June 23, 2006, and the effective date of Amendment No. 1 is June 30,
2006. For purposes of calculating the 60-day period within which the
Commission may summarily abrogate the proposed rule change under
Section 19(b)(3)(C) of the Act, the Commission considers such period
to commence on June 30, 2006, the date on which the Exchange filed
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, 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-BSE-2006-12 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File No. SR-BSE-2006-12. 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 will also 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 No. SR-BSE-2006-12 and should be submitted on or before August 2,
2006.
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\11\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-10922 Filed 7-11-06; 8:45 am]
BILLING CODE 8010-01-P
