Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Its Marketing Fee Program, 55532-55533 [06-8037]

Download as PDF 55532 Federal Register / Vol. 71, No. 184 / Friday, September 22, 2006 / Notices For the Commission, by the Division of Market Regulation, pursuant to delegated authority.16 Jill M. Peterson, Assistant Secretary. [FR Doc. 06–8038 Filed 9–21–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54465; File No. SR–CBOE– 2006–76] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Its Marketing Fee Program September 18, 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 September 1, 2006, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. CBOE has designated this proposal as one establishing or changing a due, fee, or other charge imposed by CBOE under Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b–4(f)(2) 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 CBOE proposes to amend its marketing fee program. Below is the text of the proposed rule change. Proposed new language is in italics; deleted language is in [brackets]. Chicago Board Options Exchange, Inc. Fees Schedule sroberts on PROD1PC70 with NOTICES [August 29]September 1, 2006 1. No Change. 2. Marketing Fee (6)(16): $.65 3.–4. No Change. FOOTNOTES: (1)–(5) No Change. 16 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). VerDate Aug<31>2005 20:37 Sep 21, 2006 Jkt 208001 (6) The Marketing Fee will be assessed only on transactions of MarketMakers, RMMs, e-DPMs, DPMs, and LMMs resulting from [orders for less than 1,000 contracts] (i) orders for less than 1,000 contracts from payment accepting firms, or (ii) customer orders for less than 1,000 contracts that have designated a ‘‘Preferred Market-Maker’’ under CBOE Rule 8.13 at the rate of $.65 per contract on all classes of equity options, options on HOLDRs, options on SPDRs, options on DIA, options on NDX, and options on RUT. The fee will not apply to: Market-Maker-to-MarketMaker transactions including transactions resulting from orders from non-member market-makers; transactions resulting from inbound P/A orders or a transaction resulting from the execution of an order against the DPM’s account if an order directly related to that order is represented and executed through the Linkage Plan using the DPM’s account; transactions resulting from accommodation liquidations (cabinet trades); and transactions resulting from dividend strategies, merger strategies, and short stock interest strategies as defined in footnote 13 of this Fees Schedule. This fee shall not apply to index options and options on ETFs (other than options on SPDRs, options on DIA, options on NDX, and options on RUT). A Preferred Market-Maker will only be given access to the marketing fee funds generated from a Preferred order if the Preferred Market-Maker has an appointment in the class in which the Preferred order is received and executed. Rebate/Carryover Process. If less than 80% of the marketing fee funds collected in a given month is paid out by the DPM/LMM or Preferred MarketMaker in a given month, then the Exchange would refund such surplus at the end of the month on a pro rata basis based upon contributions made by the Market-Makers, RMMs, e-DPMs, DPMs and LMMs in that month. However, if 80% or more of the funds collected in a given month is paid out by the DPM/ LMM or Preferred Market-Maker, there will not be a rebate for that month and the excess funds will be included in an Excess Pool of funds to be used by the DPM/LMM or Preferred Market-Maker in subsequent months. The total balance of the Excess Pool of funds for a DPM/ LMM cannot exceed $25,000, and the total balance of the Excess Pool of funds for a Preferred Market-Maker cannot exceed $80,000. If in any month the DPM/LMM Excess Pool balance were to exceed $25,000, or the Preferred MarketMaker Excess Pool balance were to exceed $80,000, the funds in excess of PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 $25,000 or $80,000, respectively, would be refunded on a pro rata basis based upon contributions made by the MarketMakers, RMMs, DPMs, e-DPMs and LMMs in that month. CBOE’s marketing fee program as described above will be in effect until June 2, 2007. Remainder of Fees Schedule—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. CBOE 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 CBOE proposes to amend its marketing fee program as it relates to orders designating a ‘‘Preferred MarketMaker’’ under CBOE Rule 8.13. Going forward, CBOE proposes to assess the fee only on transactions of MarketMakers, RMMs, e-DPMs, DPMs, and LMMs (collectively ‘‘Market-Makers’’) resulting from customer orders 5 for less than 1,000 contracts that have designated a ‘‘Preferred Market-Maker’’ under CBOE Rule 8.13. The Exchange states that previously, transactions of Market-Makers resulting from all orders of 1,000 contracts or less that have designated a ‘‘Preferred Market-Maker’’ under CBOE Rule 8.13 were assessed the marketing fee. CBOE would continue to assess the fee on transactions of Market-Makers resulting from orders for less than 1,000 contracts from payment accepting firms. CBOE states that it is not amending its marketing fee program in any other respects. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with 5 CBOE represents that, as used in its Fees Schedule, the term ‘‘customer’’ refers to a public customer. Telephone conference between David Liu, Special Counsel, Division of Market Regulation, Commission, and Patrick Sexton, Associate General Counsel, Exchange, on September 12, 2006. E:\FR\FM\22SEN1.SGM 22SEN1 Federal Register / Vol. 71, No. 184 / Friday, September 22, 2006 / Notices Section 6(b) of the Act,6 in general, and furthers the objectives of Section 6(b)(4) of the Act,7 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among CBOE members. 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 neither solicited nor received comments on the proposal. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change 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, because it establishes or changes a due, fee, or other charge imposed by the Exchange. Accordingly, the proposal will take effect upon filing with the Commission. At any time within 60 days of the filing of such 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: sroberts on PROD1PC70 with NOTICES 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–2006–76 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 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). 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–CBOE–2006–76. 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 CBOE. 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–2006–76 and should be submitted on or before October 13, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.10 Jill M. Peterson, Assistant Secretary. [FR Doc. 06–8037 Filed 9–21–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54459; File No. SR– NASDAQ–2006–035] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change To Amend Existing Rules for Portfolio Depository Receipts, Index Fund Shares, and Index-Linked Securities September 15, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 55533 notice is hereby given that on September 14, 2006, The NASDAQ Stock Market LLC (‘‘Nasdaq’’) 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 Nasdaq. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons and to approve the proposed rule change on an accelerated basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to amend its existing rules for portfolio depository receipts, index fund shares, and index-linked securities to provide that an eligible index may be calculated following a methodology weighting components based on one or more of the following: Sales, cash flow, book value, and dividends. The text of the proposed rule change is below. Proposed new language is italicized; there are no proposed deletions.3 * * * * * 4420. Quantitative Listing Criteria (a)–(h) No Change. (i) Portfolio Depository Receipts (1)–(2) No Change. (3)(A) No Change. (3)(B) Index Methodology and Calculation (i) The index underlying a series of Portfolio Depository Receipts will be calculated based on [either] the market capitalization, modified market capitalization, price, equal-dollar or modified equal-dollar weighting or a methodology weighting components of the index based on any, some or all of the following: Sales, cash flow, book value and dividends; (3)(B)(ii)–(iii) No Change. (3)(C)–(E) No Change. (4)–(7) No Change. (j) Index Fund Shares (1)–(2) No Change. (3)(A) No Change. (3)(B) Index Methodology and Calculation (i) The index underlying a series of Index Fund Shares will be calculated based on [either] the market capitalization, modified market capitalization, price, equal-dollar or modified equal-dollar weighting or a 6 15 7 15 VerDate Aug<31>2005 20:37 Sep 21, 2006 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 Jkt 208001 PO 00000 Frm 00118 Fmt 4703 Sfmt 4703 3 Changes are marked to the rule text that appears in the electronic manual of Nasdaq found at http://www.complinet.com/nasdaq. E:\FR\FM\22SEN1.SGM 22SEN1

Agencies

[Federal Register Volume 71, Number 184 (Friday, September 22, 2006)]
[Notices]
[Pages 55532-55533]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-8037]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54465; File No. SR-CBOE-2006-76]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to Its Marketing Fee Program

September 18, 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 September 1, 2006, the Chicago Board Options Exchange, Incorporated 
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared by the 
Exchange. CBOE has designated this proposal as one establishing or 
changing a due, fee, or other charge imposed by CBOE under Section 
19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) 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)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE proposes to amend its marketing fee program. Below is the text 
of the proposed rule change. Proposed new language is in italics; 
deleted language is in [brackets].

Chicago Board Options Exchange, Inc.

Fees Schedule

[August 29]September 1, 2006
    1. No Change.
    2. Marketing Fee (6)(16): $.65
    3.-4. No Change.
FOOTNOTES:
    (1)-(5) No Change.
    (6) The Marketing Fee will be assessed only on transactions of 
Market-Makers, RMMs, e-DPMs, DPMs, and LMMs resulting from [orders for 
less than 1,000 contracts] (i) orders for less than 1,000 contracts 
from payment accepting firms, or (ii) customer orders for less than 
1,000 contracts that have designated a ``Preferred Market-Maker'' under 
CBOE Rule 8.13 at the rate of $.65 per contract on all classes of 
equity options, options on HOLDRs, options on SPDRs, options on DIA, 
options on NDX, and options on RUT. The fee will not apply to: Market-
Maker-to-Market-Maker transactions including transactions resulting 
from orders from non-member market-makers; transactions resulting from 
inbound P/A orders or a transaction resulting from the execution of an 
order against the DPM's account if an order directly related to that 
order is represented and executed through the Linkage Plan using the 
DPM's account; transactions resulting from accommodation liquidations 
(cabinet trades); and transactions resulting from dividend strategies, 
merger strategies, and short stock interest strategies as defined in 
footnote 13 of this Fees Schedule. This fee shall not apply to index 
options and options on ETFs (other than options on SPDRs, options on 
DIA, options on NDX, and options on RUT). A Preferred Market-Maker will 
only be given access to the marketing fee funds generated from a 
Preferred order if the Preferred Market-Maker has an appointment in the 
class in which the Preferred order is received and executed.
    Rebate/Carryover Process. If less than 80% of the marketing fee 
funds collected in a given month is paid out by the DPM/LMM or 
Preferred Market-Maker in a given month, then the Exchange would refund 
such surplus at the end of the month on a pro rata basis based upon 
contributions made by the Market-Makers, RMMs, e-DPMs, DPMs and LMMs in 
that month. However, if 80% or more of the funds collected in a given 
month is paid out by the DPM/LMM or Preferred Market-Maker, there will 
not be a rebate for that month and the excess funds will be included in 
an Excess Pool of funds to be used by the DPM/LMM or Preferred Market-
Maker in subsequent months. The total balance of the Excess Pool of 
funds for a DPM/LMM cannot exceed $25,000, and the total balance of the 
Excess Pool of funds for a Preferred Market-Maker cannot exceed 
$80,000. If in any month the DPM/LMM Excess Pool balance were to exceed 
$25,000, or the Preferred Market-Maker Excess Pool balance were to 
exceed $80,000, the funds in excess of $25,000 or $80,000, 
respectively, would be refunded on a pro rata basis based upon 
contributions made by the Market-Makers, RMMs, DPMs, e-DPMs and LMMs in 
that month.
    CBOE's marketing fee program as described above will be in effect 
until June 2, 2007.
    Remainder of Fees Schedule--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. CBOE 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
    CBOE proposes to amend its marketing fee program as it relates to 
orders designating a ``Preferred Market-Maker'' under CBOE Rule 8.13. 
Going forward, CBOE proposes to assess the fee only on transactions of 
Market-Makers, RMMs, e-DPMs, DPMs, and LMMs (collectively ``Market-
Makers'') resulting from customer orders \5\ for less than 1,000 
contracts that have designated a ``Preferred Market-Maker'' under CBOE 
Rule 8.13. The Exchange states that previously, transactions of Market-
Makers resulting from all orders of 1,000 contracts or less that have 
designated a ``Preferred Market-Maker'' under CBOE Rule 8.13 were 
assessed the marketing fee. CBOE would continue to assess the fee on 
transactions of Market-Makers resulting from orders for less than 1,000 
contracts from payment accepting firms.
---------------------------------------------------------------------------

    \5\ CBOE represents that, as used in its Fees Schedule, the term 
``customer'' refers to a public customer. Telephone conference 
between David Liu, Special Counsel, Division of Market Regulation, 
Commission, and Patrick Sexton, Associate General Counsel, Exchange, 
on September 12, 2006.
---------------------------------------------------------------------------

    CBOE states that it is not amending its marketing fee program in 
any other respects.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with

[[Page 55533]]

Section 6(b) of the Act,\6\ in general, and furthers the objectives of 
Section 6(b)(4) of the Act,\7\ in particular, in that it is designed to 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among CBOE members.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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 neither solicited nor received comments on the 
proposal.

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

    The foregoing proposed rule change 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, because it establishes or changes a due, fee, 
or other charge imposed by the Exchange. Accordingly, the proposal will 
take effect upon filing with the Commission. At any time within 60 days 
of the filing of such 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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-2006-76 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-2006-76. 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 CBOE. 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-2006-76 and should be submitted on or before October 13, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
[FR Doc. 06-8037 Filed 9-21-06; 8:45 am]
BILLING CODE 8010-01-P