Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto Relating to Off-Floor DPMs, 7782-7784 [E7-2849]
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7782
Federal Register / Vol. 72, No. 33 / Tuesday, February 20, 2007 / Notices
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 the furtherance of the purposes of the
Act.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.14
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–2840 Filed 2–16–07; 8:45 am]
BILLING CODE 8010–01–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
hsrobinson on PROD1PC76 with NOTICES
• Use the Commission’s Internet
comment form at https://www.sec.gov/
rules/sro.shtml; or
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR–Amex–2007–19 on the subject
line.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55275; File No. SR–CBOE–
2006–94]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing of a
Proposed Rule Change and
Amendment No. 1 Thereto Relating to
Off-Floor DPMs
February 12, 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 November
13, 2006, the Chicago Board Options
Paper Comments
Exchange, Incorporated (‘‘CBOE’’ or the
‘‘Exchange’’) filed with the Securities
• Send paper comments in triplicate
and Exchange Commission
to Nancy M. Morris, Secretary,
(‘‘Commission’’) the proposed rule
Securities and Exchange Commission,
change as described in Items I, II, and
100 F Street, NE., Washington, DC
III below, which Items have been
20549–1090.
substantially prepared by the Exchange.
All submissions should refer to File
The Exchange filed Amendment No. 1
No. SR–Amex–2007–19. This file
to the proposed rule change on January
number should be included on the
subject line if e-mail is used. To help the 18, 2007. The Commission is publishing
this notice to solicit comments on the
Commission process and review your
proposed rule change from interested
comments more efficiently, please use
only one method. The Commission will persons.
post all comments on the Commission’s I. Self-Regulatory Organization’s
Internet Web site (https://www.sec.gov/
Statement of the Terms of Substance of
rules/sro.shtml). Copies of the
the Proposed Rule Change
submission, all subsequent
CBOE proposes to amend CBOE rules
amendments, all written statements
to allow a Designated Primary Markerwith respect to the proposed rule
Maker (‘‘DPM’’) to operate remotely
change that are filed with the
away from CBOE’s trading floor. The
Commission, and all written
text of the proposed rule change is
communications relating to the
available on the Exchange’s Web site
proposed rule change between the
Commission and any person, other than (https://www.cboe.com), at the Office of
the Secretary, CBOE and at the
those that may be withheld from the
Commission.
public in accordance with the
provisions of 5 U.S.C. 552, will be
II. Self-Regulatory Organization’s
available for inspection and copying in
Statement of the Purpose of, and
the Commission’s Public Reference
Statutory Basis for, the Proposed Rule
Room. Copies of such filing also will be Change
available for inspection and copying at
In its filing with the Commission, the
the principal office of the Exchange. All
Exchange included statements
comments received will be posted
concerning the purpose of, and basis for,
without change; the Commission does
the proposed rule change and discussed
not edit personal identifying
any comments it received on the
information from submissions. You
proposed rule change. The text of those
should submit only information that
statements may be examined at the
you wish to make available publicly. All
submissions should refer to File No.
14 17 CFR 200.30–3(a)(12).
SR–Amex–2007–19 and should be
1 15 U.S.C. 78s(b)(1).
submitted on or before March 13, 2007.
2 17 CFR 240.19b–4.
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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
CBOE proposes to amend its rules to
allow a DPM to operate remotely away
from CBOE’s trading floor. DPMs are
member organizations that function in
option classes allocated to them as a
Market-Maker, and also are subject to
the obligations under Rule 8.85 or as
otherwise provided in CBOE’s Rules.
Currently, all DPMs operate on CBOE’s
trading floor. However, some member
organizations have expressed an interest
in acting as a DPM remotely away from
CBOE’s trading floor. As discussed
below, the proposed rule change is
intended to provide DPMs with the
flexibility to operate on CBOE’s trading
floor (‘‘On-Floor DPM’’) or remotely
away from CBOE’s trading floor (‘‘OffFloor DPM’’). A DPM would only be
permitted to operate as an Off-Floor
DPM in equity option classes traded on
the Hybrid Trading System.
CBOE proposes to amend Rule 8.83 to
provide that in selecting an applicant
for approval as a DPM, the appropriate
exchange committee may place one or
more conditions on the approval,
including, but not limited to, whether
the DPM will operate on-floor or offfloor. Additionally, CBOE proposes to
amend Rule 8.83 to provide that an OnFloor DPM can request that the
appropriate Exchange committee
authorize it to operate as an Off-Floor
DPM in one or more equity option
classes traded on the Hybrid Trading
System. The appropriate Exchange
committee will consider the factors
specified in Rule 8.83(b) in determining
whether to permit an On-Floor DPM to
operate as an Off-Floor DPM. In the
event a DPM is approved to operate as
an Off-Floor DPM, Rule 8.83 provides
that the Off-Floor DPM can have a DPM
Designee trade in open outcry in the
option classes allocated to the Off-Floor
DPM, but the Off-Floor DPM shall not
receive a participation entitlement
under Rule 8.87 with respect to orders
represented in open outcry. CBOE also
proposes to amend Rule 6.45A(a)(C) and
Rule 6.74 to make clear that the DPM
participation entitlement is only
applicable to an On-Floor DPM.
As provided in new Interpretation .01
to Rule 8.83, if an Off-Floor DPM wishes
to operate as an On-Floor DPM, the Off-
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hsrobinson on PROD1PC76 with NOTICES
Federal Register / Vol. 72, No. 33 / Tuesday, February 20, 2007 / Notices
Floor DPM can request that the
appropriate Exchange Committee
authorize it to do so. In making a
determination pursuant to this
Interpretation, the appropriate Exchange
committee would evaluate whether the
change is in the best interests of the
Exchange, and the committee may
consider any information that it believes
will be of assistance to it. Factors to be
considered may include, but are not
limited to, any one or more of the
following: performance, operational
capacity of the Exchange or the DPM,
efficiency, number and experience of
personnel of the DPM who will be
performing functions related to the
trading of the applicable securities,
number of securities involved, number
of Market-Makers affected, and trading
volume of the securities.
In connection with this rule change,
CBOE proposes to amend certain DPM
obligations contained in Rule 8.85. In
particular, CBOE proposes to amend the
obligation contained in subparagraph
(a)(iv) which currently provides that the
DPM must assure that the number of
DPM Designees and support personnel
continuously present at the trading
station throughout every business day is
not less than the minimum required by
the appropriate Exchange committee.
CBOE proposes to amend subparagraph
(a)(iv) to state that an Off-Floor DPM
similarly shall assure that the number of
DPM Designees and support personnel
continuously overseeing the DPM’s
activities is not less than the minimum
required by the appropriate Exchange
committee. Additionally, an Off-Floor
DPM shall provide members with
telephone access to a DPM Designee at
all times during market hours for
purposes of resolving problems
involving trading on the Exchange.
CBOE also proposes to amend the
provision in subparagraph (a)(v) of Rule
8.85 that states a DPM shall trade in all
securities allocated to the DPM only in
the capacity of a DPM and not in any
other capacity. CBOE proposes to allow,
as part of an existing pilot program
applicable to e-DPMs,3 an Off-Floor
DPM to have not more than one MarketMaker affiliated with the Off-Floor DPM
trade on CBOE’s trading floor in any
specific option class allocated to the
Off-Floor DPM, provided such MarketMaker is trading on a separate
membership.4 The affiliated MarketMaker would also have to comply with
the ‘‘Guidelines for Exemptive Relief
3 See CBOE Rule 8.93(vii). The Pilot Program is
scheduled to expire on March 14, 2007.
4 CBOE proposes to make a corresponding change
to the ‘‘Guidelines for Exemptive Relief Under Rule
8.91(e) for Members Affiliated with DPMs.’’ See
Guidelines, Paragraph (b)(viii).
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16:14 Feb 16, 2007
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Under Rule 8.91(e) for Members
Affiliated with DPMs’’, set forth in Rule
8.91. (Absent the pilot program, an OffFloor DPM may not allow any MarketMakers affiliated with the Off-Floor
DPM to trade on CBOE’s trading floor in
any class allocated to the Off-Floor
DPM.) If the Off-Floor DPM has an
affiliated Marker-Maker trade on CBOE’s
trading floor in any specific option class
allocated to the Off-Floor DPM pursuant
to the pilot program, Rule 8.85(a)(v)
provides that the Off-Floor DPM cannot
also have a DPM Designee trading in
open outcry in the option classes
allocated to the Off-Floor DPM.
Finally, CBOE proposes to amend
Interpretation .02 of Rule 3.8 to allow an
Off-Floor DPM to appoint one
individual to be the nominee for all
memberships utilized by the
organization in an Off-Floor DPM
capacity. Interpretation .02 of Rule 3.8
currently provides that a member
organization can appoint one individual
to be the nominee for all memberships
utilized by the organization in an RMM
capacity or an e-DPM capacity. This is
an exception to the general requirement
of Rule 3.8(a)(ii) which provides that ‘‘if
a member organization is the owner or
lessee of more than one membership,
the organization must designate a
different individual to be the nominee
for each of the memberships.’’
2. Statutory Basis
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, the
requirements of Section 6(b) of the Act.5
Specifically, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 6 requirements that
the rules of an exchange be designed to
remove impediments to and perfect the
mechanism for a free and open market
and a national market system, and, in
general, to 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.
5 15
6 15
PO 00000
U.S.C. 78(f)(b).
U.S.C. 78(f)(b)(5).
Frm 00021
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7783
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.
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 Exchange 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, as amended, is consistent with
the Act. Comments may be submitted by
any of the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–CBOE–2006–94 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–2006–94. 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
E:\FR\FM\20FEN1.SGM
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7784
Federal Register / Vol. 72, No. 33 / Tuesday, February 20, 2007 / Notices
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
Section, 100 F Street, NE., Washington,
DC 20549. 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–2006–94 and should
be submitted on or before March 13,
2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.7
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–2849 Filed 2–16–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55279; File No. SR–ISE–
2007–02]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change and Amendment No. 1 Thereto
Relating to Position and Exercise
Limits on the KBW Bank Index
hsrobinson on PROD1PC76 with NOTICES
February 12, 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 January 8,
2007, the International Securities
Exchange, LLC (‘‘ISE’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been substantially prepared by the ISE.
On February 5, 2007, the ISE filed
Amendment No. 1 to the proposed rule
change. The ISE filed the proposed rule
change as a ‘‘non-controversial’’ rule
change pursuant to Section 19(b)(3)(A)
of the Act 3 and Rule 19b–4(f)(6)
thereunder,4 which renders the proposal
effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
CFR 200.30–3(a)(12).
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).
1 15
16:14 Feb 16, 2007
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is proposing to increase
the position and exercise limits for
options on the KBW Bank Index. The
text of the proposed rule change is
available at the ISE, the Commission’s
Public Reference Room, and https://
www.iseoptions.com.
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
ISE 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 ISE 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 Exchange recently listed for
trading options on the KBW Bank Index
(‘‘BKX’’) pursuant to the Exchange’s
generic listing standards found in its
Rule 2002(b). Under ISE Rule 2005, a
narrow-based index option cannot have
position and exercise limits that exceed
31,500 contracts.5 The Exchange notes
that the Philadelphia Stock Exchange
(‘‘Phlx’’) also currently lists options on
BKX. However, pursuant to a Rule 19b–
4 filing, the position and exercise limit
for options on BKX traded by Phlx is
currently 44,000 contracts.6
Accordingly, the Exchange proposes to
increase the position and exercise limit
for options on BKX traded at ISE to
44,000 contracts also. The Exchange
believes it is important for a product
traded at multiple exchanges to have a
uniform position and exercise limit in
order to eliminate any confusion among
investors and other market participants.
2. Statutory Basis
The basis under the Act for this
proposed rule change is found in
5 ISE Rule 2007 generally states that exercise
limits for an index option shall be equivalent to the
position limit prescribed to that index option.
6 See Securities Exchange Act Release No. 49312
(February 24, 2004), 69 FR 9672 (March 1, 2004)
(SR–Phlx–2004–13).
7 17
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as amended, from interested persons.
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Section 6(b)(5),7 in that the adoption of
uniform position and exercise limits for
BKX will serve to remove impediments
to and perfect the mechanism of a free
and open market and a national market
system and, in general, to protect
investors and the public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The proposed rule change does not
impose any burden on competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any written
comments from members or other
interested parties.
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) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 8 and Rule 19b–
4(f)(6) thereunder.9
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.10
A proposed rule change filed under
Rule 19b–4(f)(6) normally may not
become operative prior to 30 days after
7 15
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(3)(A).
9 17 CFR 240.19b–4(f)(6). When filing a proposed
rule change pursuant to Rule 19b–4(f)(6) under the
Act, an exchange is required to give 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 Exchange has
requested that the Commission waive the 5-day prefiling notice requirement. The Commission has
determined to waive this requirement.
10 For purposes of calculating the 60-day period
within which the Commission may summarily
abrogate the proposed rule change under Section
19(b)(3)(C) of the Act, the Commission considers
the period to commence on February 5, 2007, the
date on which the ISE submitted Amendment No.
1. See 15 U.S.C. 78s(b)(3)(C).
8 15
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]]>Agencies
[Federal Register Volume 72, Number 33 (Tuesday, February 20, 2007)]
[Notices]
[Pages 7782-7784]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-2849]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55275; File No. SR-CBOE-2006-94]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing of a Proposed Rule Change and Amendment
No. 1 Thereto Relating to Off-Floor DPMs
February 12, 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 November 13, 2006, the Chicago Board Options Exchange,
Incorporated (``CBOE'' or the ``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 Exchange filed Amendment
No. 1 to the proposed rule change on January 18, 2007. 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
CBOE proposes to amend CBOE rules to allow a Designated Primary
Marker-Maker (``DPM'') to operate remotely away from CBOE's trading
floor. The text of the proposed rule change is available on the
Exchange's Web site (https://www.cboe.com), at the Office of the
Secretary, CBOE and at the Commission.
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 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
CBOE proposes to amend its rules to allow a DPM to operate remotely
away from CBOE's trading floor. DPMs are member organizations that
function in option classes allocated to them as a Market-Maker, and
also are subject to the obligations under Rule 8.85 or as otherwise
provided in CBOE's Rules. Currently, all DPMs operate on CBOE's trading
floor. However, some member organizations have expressed an interest in
acting as a DPM remotely away from CBOE's trading floor. As discussed
below, the proposed rule change is intended to provide DPMs with the
flexibility to operate on CBOE's trading floor (``On-Floor DPM'') or
remotely away from CBOE's trading floor (``Off-Floor DPM''). A DPM
would only be permitted to operate as an Off-Floor DPM in equity option
classes traded on the Hybrid Trading System.
CBOE proposes to amend Rule 8.83 to provide that in selecting an
applicant for approval as a DPM, the appropriate exchange committee may
place one or more conditions on the approval, including, but not
limited to, whether the DPM will operate on-floor or off-floor.
Additionally, CBOE proposes to amend Rule 8.83 to provide that an On-
Floor DPM can request that the appropriate Exchange committee authorize
it to operate as an Off-Floor DPM in one or more equity option classes
traded on the Hybrid Trading System. The appropriate Exchange committee
will consider the factors specified in Rule 8.83(b) in determining
whether to permit an On-Floor DPM to operate as an Off-Floor DPM. In
the event a DPM is approved to operate as an Off-Floor DPM, Rule 8.83
provides that the Off-Floor DPM can have a DPM Designee trade in open
outcry in the option classes allocated to the Off-Floor DPM, but the
Off-Floor DPM shall not receive a participation entitlement under Rule
8.87 with respect to orders represented in open outcry. CBOE also
proposes to amend Rule 6.45A(a)(C) and Rule 6.74 to make clear that the
DPM participation entitlement is only applicable to an On-Floor DPM.
As provided in new Interpretation .01 to Rule 8.83, if an Off-Floor
DPM wishes to operate as an On-Floor DPM, the Off-
[[Page 7783]]
Floor DPM can request that the appropriate Exchange Committee authorize
it to do so. In making a determination pursuant to this Interpretation,
the appropriate Exchange committee would evaluate whether the change is
in the best interests of the Exchange, and the committee may consider
any information that it believes will be of assistance to it. Factors
to be considered may include, but are not limited to, any one or more
of the following: performance, operational capacity of the Exchange or
the DPM, efficiency, number and experience of personnel of the DPM who
will be performing functions related to the trading of the applicable
securities, number of securities involved, number of Market-Makers
affected, and trading volume of the securities.
In connection with this rule change, CBOE proposes to amend certain
DPM obligations contained in Rule 8.85. In particular, CBOE proposes to
amend the obligation contained in subparagraph (a)(iv) which currently
provides that the DPM must assure that the number of DPM Designees and
support personnel continuously present at the trading station
throughout every business day is not less than the minimum required by
the appropriate Exchange committee. CBOE proposes to amend subparagraph
(a)(iv) to state that an Off-Floor DPM similarly shall assure that the
number of DPM Designees and support personnel continuously overseeing
the DPM's activities is not less than the minimum required by the
appropriate Exchange committee. Additionally, an Off-Floor DPM shall
provide members with telephone access to a DPM Designee at all times
during market hours for purposes of resolving problems involving
trading on the Exchange.
CBOE also proposes to amend the provision in subparagraph (a)(v) of
Rule 8.85 that states a DPM shall trade in all securities allocated to
the DPM only in the capacity of a DPM and not in any other capacity.
CBOE proposes to allow, as part of an existing pilot program applicable
to e-DPMs,\3\ an Off-Floor DPM to have not more than one Market-Maker
affiliated with the Off-Floor DPM trade on CBOE's trading floor in any
specific option class allocated to the Off-Floor DPM, provided such
Market-Maker is trading on a separate membership.\4\ The affiliated
Market-Maker would also have to comply with the ``Guidelines for
Exemptive Relief Under Rule 8.91(e) for Members Affiliated with DPMs'',
set forth in Rule 8.91. (Absent the pilot program, an Off-Floor DPM may
not allow any Market-Makers affiliated with the Off-Floor DPM to trade
on CBOE's trading floor in any class allocated to the Off-Floor DPM.)
If the Off-Floor DPM has an affiliated Marker-Maker trade on CBOE's
trading floor in any specific option class allocated to the Off-Floor
DPM pursuant to the pilot program, Rule 8.85(a)(v) provides that the
Off-Floor DPM cannot also have a DPM Designee trading in open outcry in
the option classes allocated to the Off-Floor DPM.
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\3\ See CBOE Rule 8.93(vii). The Pilot Program is scheduled to
expire on March 14, 2007.
\4\ CBOE proposes to make a corresponding change to the
``Guidelines for Exemptive Relief Under Rule 8.91(e) for Members
Affiliated with DPMs.'' See Guidelines, Paragraph (b)(viii).
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Finally, CBOE proposes to amend Interpretation .02 of Rule 3.8 to
allow an Off-Floor DPM to appoint one individual to be the nominee for
all memberships utilized by the organization in an Off-Floor DPM
capacity. Interpretation .02 of Rule 3.8 currently provides that a
member organization can appoint one individual to be the nominee for
all memberships utilized by the organization in an RMM capacity or an
e-DPM capacity. This is an exception to the general requirement of Rule
3.8(a)(ii) which provides that ``if a member organization is the owner
or lessee of more than one membership, the organization must designate
a different individual to be the nominee for each of the memberships.''
2. Statutory Basis
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, the requirements of Section
6(b) of the Act.\5\ Specifically, the Exchange believes the proposed
rule change is consistent with the Section 6(b)(5) \6\ requirements
that the rules of an exchange be designed to remove impediments to and
perfect the mechanism for a free and open market and a national market
system, and, in general, to protect investors and the public interest.
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\5\ 15 U.S.C. 78(f)(b).
\6\ 15 U.S.C. 78(f)(b)(5).
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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
No written comments were solicited or received with respect to the
proposed rule change.
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 Exchange 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, as amended, is consistent with the Act. Comments may be
submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-CBOE-2006-94 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-2006-94. 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
[[Page 7784]]
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 Section, 100 F Street,
NE., Washington, DC 20549. 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-2006-94 and should be
submitted on or before March 13, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-2849 Filed 2-16-07; 8:45 am]
BILLING CODE 8011-01-P
