Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change Regarding Complex Trades, 599-600 [E6-22595]

Download as PDF Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices with Sections 6(b)(5) and 6(e)(1) of the Act.27 It is therefore ordered, pursuant to Section 19(b)(2) of the Act,28 that the proposed rule change (SR–Amex–2006– 98) is approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.29 Jill M. Peterson, Assistant Secretary. [FR Doc. E6–22592 Filed 1–4–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55006; File No. SR–Amex– 2006–57] Self-Regulatory Organizations; American Stock Exchange LLC; Order Approving Proposed Rule Change Relating To Stop Orders for Exchange Traded Funds and Trust Issued Receipts December 22, 2006. On August 18, 2006, the American Stock Exchange LLC (‘‘Amex’’) 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 the rules applicable to stop orders for exchange traded funds and trust issued receipts. The proposed rule change was published for comment in the Federal Register on October 17, 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.4 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,5 which requires, among other things, that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market, sroberts on PROD1PC70 with NOTICES 27 15 U.S.C. 78f(b)(5) and 78f(e)(1). 28 15 U.S.C. 78s(b)(2). 29 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 54584 (October 6, 2006), 71 FR 61111. 4 In approving this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 5 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 17:29 Jan 04, 2007 Jkt 211001 and, in general, to protect investors and the public interest. The Commission believes that the rule change, to amend Commentary .04(b) to Amex Rule 154 to provide that a specialist who elects a stop order on his book by selling stock to the existing bid or buying stock at the existing offer for his own account is not required to obtain floor official approval if the transaction is 0.10 point or less away from the prior transaction,6 will benefit investors by facilitating a more efficient and orderly marketplace. The Commission notes that Amex will continue to conduct its existing surveillances to monitor specialists’ compliance with the specific requirements of Commentary .04 to Amex Rule 154 (i.e., obtaining floor official approval when required and executing the stop order at the same price as the electing trade) as well as their agency obligations to the impacted stop orders. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,7 that the proposed rule change (SR–Amex–2006– 57) is approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.8 Jill M. Peterson, Assistant Secretary. [FR Doc. E6–22594 Filed 1–4–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55012; File No. SR–CBOE– 2006–109] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change Regarding Complex Trades December 27, 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 December 21, 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 substantially prepared by the Exchange. 6 This exception would only apply to transactions in Exchange-Traded Fund Shares and Trust Issued Receipts. 7 15 U.S.C. 78s(b)(2). 8 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 599 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 CBOE proposes to amend CBOE Rule 6.80 to revise the definition of ‘‘Complex Trade,’’ a term that applies to trades through the Intermarket Linkage (‘‘Linkage’’). The text of the proposed rule change appears below, with additions italicized and deletions in [brackets]: Rule 6.80. Definitions (1)–(3) No change. (4) ‘‘Complex Trade’’ means the execution of an order in an option series in conjunction with the execution of one or more related order(s) in different options series in the same underlying security occurring at or near the same time [for the equivalent number of contracts and for the purpose of executing a particular investment strategy] for the purpose of executing a particular investment strategy and for an equivalent number of contracts, provided that the number of contracts of the legs of a spread, straddle, or combination order may differ by a permissible ratio. The permissible ratio for this purpose is any ratio that is equal to or greater than one-to-three (.333) and less than or equal to three-to-one (3.00). (5)–(21) 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 substantially 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 CBOE proposes to amend the definition of ‘‘Complex Trade,’’ which is a term that the CBOE uses for Linkage purposes. A Complex Trade is an execution of an order in an options series in conjunction with one or more E:\FR\FM\05JAN1.SGM 05JAN1 600 Federal Register / Vol. 72, No. 3 / Friday, January 5, 2007 / Notices other orders in different series with the same underlying security ‘‘for the equivalent number of contracts.’’ 3 A Complex Trade is exempt from the trade-through rule.4 In contrast to the Linkage term, Complex Trade, CBOE Rule 6.53C(a) defines the term ‘‘Complex Order’’ for purposes other than Linkage. According to that definition, one type of Complex Order is a ‘‘Ratio Order,’’ which need not have an equivalent number of contracts.5 Specifically, a Ratio Order may have a ratio ranging from one-tothree (.333) to three-to-one (3.00). The Exchange applies modified priority rules to Complex Orders.6 This proposal will make the Linkage term, Complex Trade, consistent with the general term, Complex Order. According to the CBOE, the other five options exchanges are adopting a similar definition of Complex Trade, which will result in uniform application of the term across all options exchanges. The CBOE believes that such uniformity will facilitate the rapid execution of complex trades in all markets. 2. Statutory Basis The CBOE believes the proposed rule change is consistent with the Act and the rules and regulations under the Act applicable to a national securities exchange and, in particular, with the requirements of Section 6(b) of the Act.7 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 8 requirements that the rules of an exchange be designed to promote just and equitable principles of trade and to protect investors and the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition The CBOE does not believe that the proposed rule change will impose any burden on competition 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 sroberts on PROD1PC70 with NOTICES The CBOE neither solicited nor received comments on the proposal. 3 See CBOE Rule 6.80(4). CBOE Rule 6.83(b)(7). 5 See CBOE Rule 6.53C(a)(5). 6 See CBOE Rule 6.45. 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5). 4 See VerDate Aug<31>2005 17:29 Jan 04, 2007 Jkt 211001 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: A. By order approve such proposed rule change; or B. Institute proceedings to determine whether the proposed rule change should be disapproved. the principal office of the 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–2006–109 and should be submitted on or before January 26, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.9 Jill M. Peterson, Assistant Secretary. [FR Doc. E6–22595 Filed 1–4–07; 8:45 am] BILLING CODE 8011–01–P 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 rulecomments@sec.gov. Please include File No. SR–CBOE–2006–109 on the subject line. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55007; File No. SR– NASDAQ–2006–053] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change To Assess Previously-Approved Fees to Former INET Data Recipients December 22, 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 December 7, 2006, The NASDAQ Stock Market Paper Comments LLC (‘‘Nasdaq’’ or ‘‘Exchange’’), filed • Send paper comments in triplicate with the Securities and Exchange to Nancy M. Morris, Secretary, Commission (‘‘Commission’’) the Securities and Exchange Commission, proposed rule change as described in 100 F Street, NE., Washington, DC Items I, II, and III below, which Items 20549–1090. have been substantially prepared by All submissions should refer to File Nasdaq. The Commission is publishing Number SR–CBOE–2006–109. This file this notice to solicit comments on the number should be included on the proposed rule change from interested subject line if e-mail is used. To help the persons. Commission process and review your I. Self-Regulatory Organization’s comments more efficiently, please use only one method. The Commission will Statement of the Terms of Substance of the Proposed Rule Change post all comments on the Commissions Internet Web site (https://www.sec.gov/ Nasdaq is proposing to, beginning rules/sro.shtml). Copies of the February 1, 2007, assess the submission, all subsequent Commission-approved fee for its amendments, all written statements TotalView data entitlement to former with respect to the proposed rule INET subscribers and market data change that are filed with the vendors that previously received only Commission, and all written the INET ITCH 1.0 and/or INET ITCH communications relating to the 2.0 data feeds which were free of charge proposed rule change between the and are now receiving TotalView data Commission and any person, other than from the Nasdaq Market Center those that may be withheld from the execution system which is fee-liable. public in accordance with the Commission-approved Nasdaq Rule provisions of 5 U.S.C. 552, will be 7023(a) describes TotalView as follows: available for inspection and copying in the Commission’s Public Reference 9 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). Room. Copies of such filing also will be 2 17 CFR 240.19b–4. available for inspection and copying at PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 E:\FR\FM\05JAN1.SGM 05JAN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 72, Number 3 (Friday, January 5, 2007)]
[Notices]
[Pages 599-600]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-22595]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55012; File No. SR-CBOE-2006-109]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing of a Proposed Rule Change Regarding 
Complex Trades

December 27, 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 December 21, 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 substantially 
prepared by the Exchange. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The CBOE proposes to amend CBOE Rule 6.80 to revise the definition 
of ``Complex Trade,'' a term that applies to trades through the 
Intermarket Linkage (``Linkage''). The text of the proposed rule change 
appears below, with additions italicized and deletions in [brackets]: 
Rule 6.80. Definitions
    (1)-(3) No change.
    (4) ``Complex Trade'' means the execution of an order in an option 
series in conjunction with the execution of one or more related 
order(s) in different options series in the same underlying security 
occurring at or near the same time [for the equivalent number of 
contracts and for the purpose of executing a particular investment 
strategy] for the purpose of executing a particular investment strategy 
and for an equivalent number of contracts, provided that the number of 
contracts of the legs of a spread, straddle, or combination order may 
differ by a permissible ratio. The permissible ratio for this purpose 
is any ratio that is equal to or greater than one-to-three (.333) and 
less than or equal to three-to-one (3.00).
    (5)-(21) 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 substantially 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 CBOE proposes to amend the definition of ``Complex Trade,'' 
which is a term that the CBOE uses for Linkage purposes. A Complex 
Trade is an execution of an order in an options series in conjunction 
with one or more

[[Page 600]]

other orders in different series with the same underlying security 
``for the equivalent number of contracts.'' \3\ A Complex Trade is 
exempt from the trade-through rule.\4\
---------------------------------------------------------------------------

    \3\ See CBOE Rule 6.80(4).
    \4\ See CBOE Rule 6.83(b)(7).
---------------------------------------------------------------------------

    In contrast to the Linkage term, Complex Trade, CBOE Rule 6.53C(a) 
defines the term ``Complex Order'' for purposes other than Linkage. 
According to that definition, one type of Complex Order is a ``Ratio 
Order,'' which need not have an equivalent number of contracts.\5\ 
Specifically, a Ratio Order may have a ratio ranging from one-to-three 
(.333) to three-to-one (3.00). The Exchange applies modified priority 
rules to Complex Orders.\6\
---------------------------------------------------------------------------

    \5\ See CBOE Rule 6.53C(a)(5).
    \6\ See CBOE Rule 6.45.
---------------------------------------------------------------------------

    This proposal will make the Linkage term, Complex Trade, consistent 
with the general term, Complex Order. According to the CBOE, the other 
five options exchanges are adopting a similar definition of Complex 
Trade, which will result in uniform application of the term across all 
options exchanges. The CBOE believes that such uniformity will 
facilitate the rapid execution of complex trades in all markets.
2. Statutory Basis
    The CBOE believes the proposed rule change is consistent with the 
Act and the rules and regulations under the Act applicable to a 
national securities exchange and, in particular, with the requirements 
of Section 6(b) of the Act.\7\ Specifically, the Exchange believes the 
proposed rule change is consistent with the Section 6(b)(5) \8\ 
requirements that the rules of an exchange be designed to promote just 
and equitable principles of trade and to 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

    The CBOE does not believe that the proposed rule change will impose 
any burden on competition 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 CBOE neither solicited nor received comments on the proposal.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    A. By order approve such proposed rule change; or
    B. Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form https://
www.sec.gov/rules/sro.shtml; or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-CBOE-2006-109 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-2006-109. 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 Commissions 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 
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-2006-109 and should be submitted on or before January 26, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
 [FR Doc. E6-22595 Filed 1-4-07; 8:45 am]
BILLING CODE 8011-01-P

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