Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Extend the Duration of the SizeQuote Mechanism Pilot, 4550-4552 [E7-1509]
Download as PDF
<![CDATA[
4550
Federal Register / Vol. 72, No. 20 / Wednesday, January 31, 2007 / Notices
B. Self-Regulatory Organization’s
Statement on Burden on Competition
BSE 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.
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.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
No written comments were solicited
or received with respect to the proposed
rule change.
IV. Solicitation of Comments
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the forgoing rule change does
not: (1) Significantly affect the
protection of investors or the public
interest; (2) impose any significant
burden on competition; and (3) become
operative for 30 days after the date of
this filing, or such shorter time as the
Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 10 and Rule 19b–
4(f)(6) thereunder.11
A proposed rule change filed under
19b–4(f)(6) normally may not become
operative prior to 30 days after the date
of filing.12 However, Rule 19b–
4(f)(6)(iii) 13 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. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because such waiver would permit
position and exercise limits for options
on IWM to continue at 500,000 option
contracts for an approximately sixmonth pilot period. For this reason, the
Commission designates the proposed
rule change to be effective and operative
upon filing with the Commission.14
At any time within 60 days of the
filing of such proposed rule change the
10 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
12 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6)(iii) requires that a self-regulatory
organization submit to the Commission written
notice of its intent to file the proposed rule change,
along with a brief description and text of the
proposed rule change, at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Commission has decided to waive
the five-day pre-filing notice requirement.
13 Id.
14 For the purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
11 17
mstockstill on PROD1PC62 with NOTICES
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–1510 Filed 1–30–07; 8:45 am]
VerDate Aug<31>2005
15:08 Jan 30, 2007
Jkt 211001
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
Number SR–BSE–2007–03 on the
subject line.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55174; File No. SR–CBOE–
2007–07]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change to Extend the Duration of
the SizeQuote Mechanism Pilot
January 25, 2007.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on January
Paper Comments
17, 2007, the Chicago Board Options
• Send paper comments in triplicate
Exchange, Incorporated ( ‘‘Exchange’’ or
to Nancy M. Morris, Secretary,
‘‘CBOE’’) filed with the Securities and
Securities and Exchange Commission,
Exchange Commission (the
100 F Street, NE., Washington, DC
‘‘Commission’’) the proposed rule
20549–1090.
change as described in Items I, II, and
All submissions should refer to File
III below, which Items have been
Number SR–BSE–2007–03. This file
prepared substantially by the Exchange.
number should be included on the
The Exchange filed the proposal as a
subject line if e-mail is used. To help the ‘‘non-controversial’’ proposed rule
Commission process and review your
change pursuant to Section
comments more efficiently, please use
19(b)(3)(A)(iii) of the Act 3 and Rule
only one method. The Commission will 19b–4(f)(6) thereunder,4 which renders
post all comments on the Commission’s the proposal effective upon filing with
Internet Web site (https://www.sec.gov/
the Commission.5 The Commission is
rules/sro.shtml). Copies of the
publishing this notice to solicit
submission, all subsequent
comments on the proposed rule change
amendments, all written statements
from interested persons.
with respect to the proposed rule
I. Self-Regulatory Organization’s
change that are filed with the
Statement of the Terms of Substance of
Commission, and all written
the Proposed Rule Change
communications relating to the
proposed rule change between the
The Exchange proposes to extend the
Commission and any person, other than pilot in CBOE Rule 6.74(f) pertaining to
those that may be withheld from the
the SizeQuote Mechanism, which is a
public in accordance with the
process by which a Floor Broker may
provisions of 5 U.S.C. 552, will be
execute and facilitate large-sized orders
available for inspection and copying in
in open outcry. The Exchange is
the Commission’s Public Reference
proposing to extend the pilot program,
Room. Copies of the filing also will be
which would otherwise expire on
available for inspection and copying at
February 15, 2007, through February 15,
the principal office of BSE. All
2008. No other changes are being made
comments received will be posted
to the pilot program through this rule
without change; the Commission does
not edit personal identifying
15 17 CFR 200.30–3(a)(12).
information from submissions. You
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
should submit only information that
3 15 U.S.C. 78s(b)(3)(A)(iii).
you wish to make available publicly. All
4 17 CFR 240.19b–4(f)(6).
submissions should refer to File
5 CBOE gave the Commission written notice of its
Number SR–BSE–2007–03 and should
intention to file the proposed rule change on
be submitted on or before February 21,
January 10, 2007. See Rule 19b–4(f)(6)(iii). 17 CFR
2007.
240.19b–4(f)(6)(iii).
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
E:\FR\FM\31JAN1.SGM
31JAN1
Federal Register / Vol. 72, No. 20 / Wednesday, January 31, 2007 / Notices
filing.6 The text of the proposed rule
change is available at https://
www.cboe.org/Legal, at the Exchange,
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 those
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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
mstockstill on PROD1PC62 with NOTICES
CBOE Rule 6.74(f), which relates to
the open outcry ‘‘SizeQuote’’
Mechanism, was approved on a pilot
basis in February 2005 and was
expanded to include solicited orders in
January 2006.7 The pilot program has
been extended once and is currently set
to expire on February 15, 2007.8 The
pilot program provides a process by
which a Floor Broker, using his/her
exercise of due diligence to execute
orders at the best price(s), may execute
and facilitate large-sized orders in open
outcry. Under the pilot program, the
ICMPs have priority to trade a
SizeQuote Order at the best price
communicated by the ICMPs in their
6 A separate rule change proposal has been filed
and is currently pending with the Commission that
would make amendments to the SizeQuote
Mechanism. See SR–CBOE–2005–115 (proposal to
modify the pilot program in various respects,
including to permit a Floor Broker to execute the
entire SizeQuote Order at a price at least one
trading increment better than the best price
communicated by the in-crowd market participants
(‘‘ICMPs’’) in their responses to the SizeQuote
request).
7 See Securities Exchange Act Release Nos. 51205
(February 15, 2005), 70 FR 8647 (February 22, 2005)
(approving SR–CBOE–2004–72 on a pilot basis
through February 15, 2006) and 53135 (January 17,
2006), 71 FR 3908 (January 24, 2006) (approving
SR–CBOE–2005–83, which modified the pilot
program to enable a Floor Broker to execute a
SizeQuote Order with either a firm facilitation
order, one or more solicited orders, or a
combination of the Floor Broker’s facilitation order
and such solicited order(s)).
8 See Securities Exchange Act Release No. 53252
(February 8, 2006), 71 FR 8012 (February 15, 2006)
(immediately effective proposal, SR–CBOE–2006–
05, extending the pilot program from February 15,
2006 to February 15, 2007).
VerDate Aug<31>2005
15:08 Jan 30, 2007
Jkt 211001
response to a Floor Broker’s SizeQuote
request and at one increment better,
while a Floor Broker can execute the
entire SizeQuote Order with a
facilitation order, one or more solicited
orders, or a combination of solicited and
facilitation orders at a price two trading
increments better than the best price
provided by the ICMPs in their response
to the SizeQuote request. For purposes
of the pilot program, the minimum
qualifying order size is 250 contracts 9
and Floor Brokers must stand ready to
facilitate the entire size of the order for
which they request SizeQuotes.
The instant rule change seeks to
extend the existing pilot program,
which would otherwise expire on
February 15, 2007, through February 15,
2008. The Exchange notes that, as part
of the original pilot program approval
order and subsequent filing to extend
the pilot program,10 the Exchange
represented that it would provide the
Commission a report at the end of the
pilot period summarizing the
effectiveness of the SizeQuote program.
In that regard, though the SizeQuote
Mechanism has been made available
during the pilot period in all equity
option classes traded on the Exchange
for orders of 250 contracts or more, the
Exchange’s continued experience has
been that Floor Brokers have not
generally availed themselves of the
SizeQuote Mechanism to facilitate largesized orders.11 However, the Exchange
continues to believe that the SizeQuote
Mechanism enhances ICMPs’ ability and
incentive to quote competitively and
participate in open outcry trades while
at the same time creates a process that
gives greater certainty to Floor Brokers
in the execution of large orders in that
ICMPs only have one opportunity to
respond with a quote response (which
further enhances an ICMP’s incentive to
quote competitively). The Exchange is
therefore seeking to extend the existing
pilot program for another year through
February 15, 2008 in order to continue
its evaluation of the utility of the
SizeQuote Mechanism.
9 The appropriate Exchange committee
determines the classes in which SizeQuote operates
and may vary the minimum qualifying order size,
provided that such number may not be less than
250 contracts.
10 See notes 7 and 8, supra.
11 The Exchange believes the SizeQuote
Mechanism has not been actively utilized due to
some of the limitations and risks inherent in the
original design of the pilot program. Thus, CBOE
expanded the pilot program to include solicited
orders. Originally the pilot program only applied to
facilitation orders. See note 7, supra. CBOE has also
proposed to modify the pilot program in various
other respects. See note 6, supra.
PO 00000
Frm 00075
Fmt 4703
Sfmt 4703
4551
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with Section
6(b) of the Act 12 in general and furthers
the objectives of Section 6(b)(5) of the
Act 13 in particular in that it is designed
to promote just and equitable principles
of trade, 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
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 rule does not:
(i) Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) 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, provided that the selfregulatory organization has given the
Commission written notice of its intent
to file the proposed rule change at least
five business days prior to the date of
filing of the proposed rule change or
such shorter time as designated by the
Commission, the proposed rule change
has become effective pursuant to
Section 19(b)(3)(A) of the Act 14 and
Rule 19b–4(f)(6) thereunder.15
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
12 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
14 15 U.S.C. 78s(b)(3)(A).
15 17 CFR 240.19b–4(f)(6).
13 15
E:\FR\FM\31JAN1.SGM
31JAN1
4552
Federal Register / Vol. 72, No. 20 / Wednesday, January 31, 2007 / Notices
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:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
Self-Regulatory Organizations;
Philadelphia Stock Exchange, Inc.;
Notice of Filing of Proposed Rule
Change Relating to Listing Standards
for Basket Linked Notes
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–CBOE–2007–07 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.
mstockstill on PROD1PC62 with NOTICES
All submissions should refer to File
Number SR–CBOE–2007–07. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room. Copies of such filing also will be
available for inspection and copying at
the principal office of 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–2007–07 and should
be submitted on or before February 21,
2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.16
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–1509 Filed 1–30–07; 8:45 am]
[Release No. 34–55173; File No. SR–Phlx–
2006–85]
January 25, 2007.
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
12, 2006, the Philadelphia Stock
Exchange, Inc. (‘‘Phlx’’ 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 Phlx. 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 Phlx proposes to amend Phlx
Rule 803—Criteria for Listing—Tier 1,
regarding listing standards for Basket
Linked Notes (‘‘BLNs’’). The text of the
proposed rule change is available on
Phlx’s Web site at https://www.phlx.com,
at Phlx’s principal office, 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
Phlx 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 Phlx has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to conform Phlx’s listing
standards for Basket Linked Notes,
specifically Phlx Rule 803(k), to that of
other exchanges. Phlx Rule 803 provides
listing standards for Basket Linked
BILLING CODE 8011–01–P
1 15
16 17
CFR 200.30–3(a)(12).
VerDate Aug<31>2005
15:08 Jan 30, 2007
2 17
Jkt 211001
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00076
Fmt 4703
Sfmt 4703
Notes, which are income instruments
whose values are linked to the
performance of highly capitalized,
actively traded common stock.
Specifically, BLNs are non-convertible
debt of an issuer, whose value is based,
at least in part, on the value of another
issuer’s common stock or nonconvertible preferred stock.
Phlx Rule 803(k) details Phlx’s listing
standards for BLNs. Specifically, Phlx
Rule 803(k)(3) currently requires, among
other things, that securities linked to
BLNs either: (i) Have a minimum market
capitalization of $3 billion and during
the 12 months preceding listing are
shown to have traded at least 2.5
million shares; (ii) have a minimum
market capitalization of $1.5 billion and
during the 12 months preceding listing
are shown to have traded at least 10
million shares; or (iii) have a minimum
market capitalization of $500 million
and during the 12 months preceding
listing are shown to have traded at least
15 million shares.
On December 7, 2000, the
Commission granted authority to the
Phlx to list and trade notes linked to
more than one equity security.3 Each of
the underlying securities of a BLN is
required to meet the standards for
linked securities set forth in Phlx Rule
803(k). However, the 2000 Order limited
the basket of underlying securities that
may to be linked to a BLN to no more
than twenty. At this time, Phlx proposes
to increase the number of underlying
securities that may be linked to a BLN
from no more than 20 to no more than
thirty.4
The Phlx believes that expanding the
basket of equity securities that may be
linked to a BLN will enhance
competition and benefit investors and
the marketplace through additional
product choices and alternatives. The
Phlx also believes that there would be
no investor protection concerns with
expanding the number of equity
securities that may be linked to a BLN
from more than one common stock to up
to thirty common stocks.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 5 in general, and furthers the
objectives of Section 6(b)(5) of the Act 6
3 See Securities Exchange Act Release No. 43690
(December 7, 2000), 65 FR 78523 (December 15,
2000) (SR–Phlx–2000–90) (‘‘2000 Order’’).
4 This is identical to the listing standard of the
American Stock Exchange (Amex Company Guide
Section 107B); see Securities Exchange Act Release
No. 47055 (December 19, 2002), 67 FR 79669
(December 30, 2002) (SR–Amex–2002–110).
5 15 U.S.C. 78f(b).
6 15 U.S.C. 78f(b)(5).
E:\FR\FM\31JAN1.SGM
31JAN1
]]>Agencies
[Federal Register Volume 72, Number 20 (Wednesday, January 31, 2007)]
[Notices]
[Pages 4550-4552]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-1509]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55174; File No. SR-CBOE-2007-07]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change to Extend the Duration of the SizeQuote Mechanism Pilot
January 25, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on January 17, 2007, 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, II, and III below, which Items have been prepared
substantially by the Exchange. The Exchange filed the proposal as a
``non-controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\
which renders the proposal effective upon filing with the
Commission.\5\ The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
\5\ CBOE gave the Commission written notice of its intention to
file the proposed rule change on January 10, 2007. See Rule 19b-
4(f)(6)(iii). 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to extend the pilot in CBOE Rule 6.74(f)
pertaining to the SizeQuote Mechanism, which is a process by which a
Floor Broker may execute and facilitate large-sized orders in open
outcry. The Exchange is proposing to extend the pilot program, which
would otherwise expire on February 15, 2007, through February 15, 2008.
No other changes are being made to the pilot program through this rule
[[Page 4551]]
filing.\6\ The text of the proposed rule change is available at https://
www.cboe.org/Legal, at the Exchange, and at the Commission's Public
Reference Room.
---------------------------------------------------------------------------
\6\ A separate rule change proposal has been filed and is
currently pending with the Commission that would make amendments to
the SizeQuote Mechanism. See SR-CBOE-2005-115 (proposal to modify
the pilot program in various respects, including to permit a Floor
Broker to execute the entire SizeQuote Order at a price at least one
trading increment better than the best price communicated by the in-
crowd market participants (``ICMPs'') in their responses to the
SizeQuote request).
---------------------------------------------------------------------------
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 those 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
CBOE Rule 6.74(f), which relates to the open outcry ``SizeQuote''
Mechanism, was approved on a pilot basis in February 2005 and was
expanded to include solicited orders in January 2006.\7\ The pilot
program has been extended once and is currently set to expire on
February 15, 2007.\8\ The pilot program provides a process by which a
Floor Broker, using his/her exercise of due diligence to execute orders
at the best price(s), may execute and facilitate large-sized orders in
open outcry. Under the pilot program, the ICMPs have priority to trade
a SizeQuote Order at the best price communicated by the ICMPs in their
response to a Floor Broker's SizeQuote request and at one increment
better, while a Floor Broker can execute the entire SizeQuote Order
with a facilitation order, one or more solicited orders, or a
combination of solicited and facilitation orders at a price two trading
increments better than the best price provided by the ICMPs in their
response to the SizeQuote request. For purposes of the pilot program,
the minimum qualifying order size is 250 contracts \9\ and Floor
Brokers must stand ready to facilitate the entire size of the order for
which they request SizeQuotes.
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release Nos. 51205 (February 15,
2005), 70 FR 8647 (February 22, 2005) (approving SR-CBOE-2004-72 on
a pilot basis through February 15, 2006) and 53135 (January 17,
2006), 71 FR 3908 (January 24, 2006) (approving SR-CBOE-2005-83,
which modified the pilot program to enable a Floor Broker to execute
a SizeQuote Order with either a firm facilitation order, one or more
solicited orders, or a combination of the Floor Broker's
facilitation order and such solicited order(s)).
\8\ See Securities Exchange Act Release No. 53252 (February 8,
2006), 71 FR 8012 (February 15, 2006) (immediately effective
proposal, SR-CBOE-2006-05, extending the pilot program from February
15, 2006 to February 15, 2007).
\9\ The appropriate Exchange committee determines the classes in
which SizeQuote operates and may vary the minimum qualifying order
size, provided that such number may not be less than 250 contracts.
---------------------------------------------------------------------------
The instant rule change seeks to extend the existing pilot program,
which would otherwise expire on February 15, 2007, through February 15,
2008. The Exchange notes that, as part of the original pilot program
approval order and subsequent filing to extend the pilot program,\10\
the Exchange represented that it would provide the Commission a report
at the end of the pilot period summarizing the effectiveness of the
SizeQuote program. In that regard, though the SizeQuote Mechanism has
been made available during the pilot period in all equity option
classes traded on the Exchange for orders of 250 contracts or more, the
Exchange's continued experience has been that Floor Brokers have not
generally availed themselves of the SizeQuote Mechanism to facilitate
large-sized orders.\11\ However, the Exchange continues to believe that
the SizeQuote Mechanism enhances ICMPs' ability and incentive to quote
competitively and participate in open outcry trades while at the same
time creates a process that gives greater certainty to Floor Brokers in
the execution of large orders in that ICMPs only have one opportunity
to respond with a quote response (which further enhances an ICMP's
incentive to quote competitively). The Exchange is therefore seeking to
extend the existing pilot program for another year through February 15,
2008 in order to continue its evaluation of the utility of the
SizeQuote Mechanism.
---------------------------------------------------------------------------
\10\ See notes 7 and 8, supra.
\11\ The Exchange believes the SizeQuote Mechanism has not been
actively utilized due to some of the limitations and risks inherent
in the original design of the pilot program. Thus, CBOE expanded the
pilot program to include solicited orders. Originally the pilot
program only applied to facilitation orders. See note 7, supra. CBOE
has also proposed to modify the pilot program in various other
respects. See note 6, supra.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Act \12\ in general and furthers the objectives of
Section 6(b)(5) of the Act \13\ in particular in that it is designed to
promote just and equitable principles of trade, 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.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f(b).
\13\ 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 rule does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) 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, provided that the self-regulatory organization
has given the Commission written notice of its intent to file the
proposed rule change at least five business days prior to the date of
filing of the proposed rule change or such shorter time as designated
by the Commission, the proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act \14\ and Rule 19b-4(f)(6)
thereunder.\15\
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
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
[[Page 4552]]
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-CBOE-2007-07 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-2007-07. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal office of 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-2007-07 and should be submitted on or before
February 21, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------
\16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-1509 Filed 1-30-07; 8:45 am]
BILLING CODE 8011-01-P
