Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Extend Two Pilot Programs Until July 18, 2007 Related to the Exchange's Automated Improvement Mechanism, 41487-41488 [E6-11572]

Download as PDF Federal Register / Vol. 71, No. 140 / Friday, July 21, 2006 / Notices 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: BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54147; File No. SR–CBOE– 2006–64] Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2006–63 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. rwilkins on PROD1PC63 with NOTICES_1 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.9 Jill M. Peterson, Assistant Secretary. [FR Doc. E6–11568 Filed 7–20–06; 8:45 am] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Extend Two Pilot Programs Until July 18, 2007 Related to the Exchange’s Automated Improvement Mechanism July 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 July 6, 2006, the Chicago Board Options All submissions should refer to File Exchange, Incorporated (‘‘Exchange’’ or Number SR–CBOE–2006–63. This file ‘‘CBOE’’) filed with the Securities and number should be included on the subject line if e-mail is used. To help the Exchange Commission (the ‘‘Commission’’) the proposed rule Commission process and review your change as described in Items I and II comments more efficiently, please use only one method. The Commission will below, which Items have been prepared post all comments on the Commission’s by the Exchange. The Exchange filed the proposed rule change pursuant to Internet Web site (http://www.sec.gov/ section 19(b)(3)(A) of the Act 3 and Rule rules/sro.shtml). Copies of the 19b–4(f)(6) thereunder,4 which renders submission, all subsequent the proposed rule change effective upon amendments, all written statements filing with the Commission. The with respect to the proposed rule Commission is publishing this notice to change that are filed with the solicit comments on the proposed rule Commission, and all written change from interested persons. communications relating to the proposed rule change between the I. Self-Regulatory Organization’s Commission and any person, other than Statement of the Terms of Substance of those that may be withheld from the the Proposed Rule Change public in accordance with the CBOE proposes to extend two pilot provisions of 5 U.S.C. 552, will be programs related to the Exchange’s available for inspection and copying in Automated Improvement Mechanism the Commission’s Public Reference Room. Copies of such filing also will be (‘‘AIM’’) for one year, until July 18, 2007. The text of the proposed rule available for inspection and copying at change is available on the Exchange’s the principal office of the CBOE. All Web site (http://www.cboe.com), at the comments received will be posted Exchange’s Office of the Secretary, and without change; the Commission does at the Commission’s Public Reference not edit personal identifying Room. information from submissions. You should submit only information that you wish to make available publicly. All 9 17 CFR 200.30–3(a)(12). submissions should refer to File 1 15 U.S.C. 78s(b)(1). Number SR–CBOE–2006–63 and should 2 17 CFR 240.19b–4. be submitted on or before August 11, 3 15 U.S.C. 78s(b)(3)(A). 2006. 4 17 CFR 240.19b–4(f)(6). VerDate Aug<31>2005 17:59 Jul 20, 2006 Jkt 208001 PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 41487 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 parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose In February 2006, CBOE obtained approval of a filing adopting the AIM auction process.5 AIM exposes certain orders electronically to an auction process to provide such orders with the opportunity to receive an execution at an improved price. The AIM auction is available only for orders that an Exchange member represents as agent and for which a second order of the same size as the ‘‘Agency Order’’ (and on the opposite side of the market) is also submitted (effectively stopping the Agency Order at a given price). Two components of AIM were approved on a pilot basis: (1) That there is no minimum size requirement for orders to be eligible for the auction, and (2) that the auction will conclude prematurely anytime there is a quote lock on the Exchange pursuant to Exchange Rule 6.45A(d).6 In connection with the pilot programs, the Exchange has been submitting to the Commission monthly reports providing detailed AIM auction and order execution data. Extending the pilots for an additional year will allow the Commission more time to consider the impact of the pilot programs on AIM order executions. The proposed rule change merely extends the duration of the pilot programs until July 18, 2007. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with section 6(b) of the Act,7 in general, and furthers 5 See Securities Exchange Act Release No. 53222 (February 3, 2006), 71 FR 7069 (February 10, 2006). 6 That rule relates to situations where a MarketMaker’s quote interacts with the quote of another CBOE Market-Maker (i.e., when internal quotes lock). 7 15 U.S.C. 78f(b). E:\FR\FM\21JYN1.SGM 21JYN1 41488 Federal Register / Vol. 71, No. 140 / Friday, July 21, 2006 / Notices the objectives of section 6(b)(5) of the Act,8 in particular, in that it is designed to allow the Commission additional time to evaluate the AIM pilot programs, remove impediments to and perfect the mechanism of a free and open market and a national market system, and protect investors and the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposal. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action rwilkins on PROD1PC63 with NOTICES_1 Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) by its terms, 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, it has become effective pursuant to section 19(b)(3)(A) of the Act 9 and Rule 19b–4(f)(6) thereunder.10 A proposed rule change filed under Rule 19b–4(f)(6) normally may not become operative prior to 30 days after the date of filing. However, Rule 19b– 4(f)(6)(iii) 11 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 requested that the Commission waive the 30-day operative delay and designate the proposed rule change immediately operative upon filing. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest because it would allow the pilots to continue without interruption until July 18, 2007. For this reason, the Commission designates the proposal to be effective and operative upon filing with the Commission.12 U.S.C. 78f(b)(5). U.S.C. 78s(b)(3)(A). 10 17 CFR 240.19b–4(f)(6). 11 17 CFR 240.19b–4(f)(6)(iii). 12 For purposes only of waiving the 30-day operative delay, the Commission has considered the 9 15 VerDate Aug<31>2005 17:59 Jul 20, 2006 Jkt 208001 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: For the Commission, by the Division of Market Regulation, pursuant to delegated authority.13 Jill M. Peterson, Assistant Secretary. [FR Doc. E6–11572 Filed 7–20–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments CBOE 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. 8 15 IV. Solicitation of Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2006–64 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. [Release No. 34–54152; File No. SR–ISE– 2006–36] Self-Regulatory Organizations; International Securities Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Payment for Order Flow Fee Changes July 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 July 3, 2006, the International Securities All submissions should refer to File Exchange, Inc. (‘‘ISE’’ or ‘‘Exchange’’) Number SR–CBOE–2006–64. This file filed with the Securities and Exchange number should be included on the Commission (‘‘Commission’’) the subject line if e-mail is used. To help the proposed rule change as described in Items I, II, and III below, which Items Commission process and review your have been prepared by the Exchange. comments more efficiently, please use only one method. The Commission will The ISE has designated this proposal as post all comments on the Commission’s one changing a fee imposed by the ISE under Section 19(b)(3)(A)(ii) of the Act 3 Internet Web site (http://www.sec.gov/ and Rule 19b–4(f)(2) thereunder,4 which rules/sro.shtml). Copies of the renders the proposal effective upon submission, all subsequent filing with the Commission. The amendments, all written statements Commission is publishing this notice to with respect to the proposed rule solicit comments on the proposed rule change that are filed with the change 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 The ISE proposes to amend its public in accordance with the Schedule of Fees regarding the payment provisions of 5 U.S.C. 552, will be for order flow fees collected by the available for inspection and copying in Exchange. The text of the proposed rule the Commission’s Public Reference change is available on the ISE’s Web site Room. Copies of such filing also will be at http://www.iseoptions.com, at the available for inspection and copying at principal office of the Exchange, and at the principal office of the Exchange. All the Commission’s Public Reference Room. comments received will be posted without change; the Commission does II. Self-Regulatory Organization’s not edit personal identifying Statement of the Purpose of, and information from submissions. You Statutory Basis for, the Proposed Rule should submit only information that Change you wish to make available publicly. All In its filing with the Commission, the submissions should refer to File ISE included statements concerning the Number SR–CBOE–2006–64 and should purpose of and basis for the proposed be submitted on or before August 11, 2006. 13 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 2 17 proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 E:\FR\FM\21JYN1.SGM 21JYN1

Agencies

[Federal Register Volume 71, Number 140 (Friday, July 21, 2006)]
[Notices]
[Pages 41487-41488]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-11572]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54147; File No. SR-CBOE-2006-64]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change to Extend Two Pilot Programs Until July 18, 2007 Related to 
the Exchange's Automated Improvement Mechanism

July 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 July 6, 2006, the Chicago Board Options Exchange, Incorporated 
(``Exchange'' or ``CBOE'') filed with the Securities and Exchange 
Commission (the ``Commission'') the proposed rule change as described 
in Items I and II below, which Items have been prepared by the 
Exchange. The Exchange filed the proposed rule change pursuant to 
section 19(b)(3)(A) 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE proposes to extend two pilot programs related to the 
Exchange's Automated Improvement Mechanism (``AIM'') for one year, 
until July 18, 2007. The text of the proposed rule change is available 
on the Exchange's Web site (http://www.cboe.com), at the Exchange's 
Office of the Secretary, 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 parts of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    In February 2006, CBOE obtained approval of a filing adopting the 
AIM auction process.\5\ AIM exposes certain orders electronically to an 
auction process to provide such orders with the opportunity to receive 
an execution at an improved price. The AIM auction is available only 
for orders that an Exchange member represents as agent and for which a 
second order of the same size as the ``Agency Order'' (and on the 
opposite side of the market) is also submitted (effectively stopping 
the Agency Order at a given price).
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 53222 (February 3, 
2006), 71 FR 7069 (February 10, 2006).
---------------------------------------------------------------------------

    Two components of AIM were approved on a pilot basis: (1) That 
there is no minimum size requirement for orders to be eligible for the 
auction, and (2) that the auction will conclude prematurely anytime 
there is a quote lock on the Exchange pursuant to Exchange Rule 
6.45A(d).\6\ In connection with the pilot programs, the Exchange has 
been submitting to the Commission monthly reports providing detailed 
AIM auction and order execution data. Extending the pilots for an 
additional year will allow the Commission more time to consider the 
impact of the pilot programs on AIM order executions. The proposed rule 
change merely extends the duration of the pilot programs until July 18, 
2007.
---------------------------------------------------------------------------

    \6\ That rule relates to situations where a Market-Maker's quote 
interacts with the quote of another CBOE Market-Maker (i.e., when 
internal quotes lock).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
section 6(b) of the Act,\7\ in general, and furthers

[[Page 41488]]

the objectives of section 6(b)(5) of the Act,\8\ in particular, in that 
it is designed to allow the Commission additional time to evaluate the 
AIM pilot programs, remove impediments to and perfect the mechanism of 
a free and open market and a national market system, and protect 
investors and the public interest.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    CBOE 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 neither solicited nor received comments on the 
proposal.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
by its terms, 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, it 
has become effective pursuant to section 19(b)(3)(A) of the Act \9\ and 
Rule 19b-4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) \11\ 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 requested that the 
Commission waive the 30-day operative delay and designate the proposed 
rule change immediately operative upon filing. The Commission believes 
that waiver of the 30-day operative delay is consistent with the 
protection of investors and the public interest because it would allow 
the pilots to continue without interruption until July 18, 2007. For 
this reason, the Commission designates the proposal to be effective and 
operative upon filing with the Commission.\12\
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    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ 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. 15 U.S.C. 78c(f).
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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 is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2006-64 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-2006-64. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in 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-2006-64 and should be submitted on or before August 
11, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
 [FR Doc. E6-11572 Filed 7-20-06; 8:45 am]
BILLING CODE 8010-01-P