Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Granting Approval to Proposed Rule Change Regarding a Permit Program for CBSX, 8816-8817 [E7-3373]
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Federal Register / Vol. 72, No. 38 / Tuesday, February 27, 2007 / Notices
All submissions should refer to File
Number SR–Amex–2007–14. 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 the filing also will be
available for inspection and copying at
the principal office of the Amex. 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–Amex–2007–14 and should
be submitted on or before March 20,
2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–3285 Filed 2–26–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55326; File No. SR–CBOE–
2006–107]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Order Granting Approval
to Proposed Rule Change Regarding a
Permit Program for CBSX
cprice-sewell on PROD1PC62 with NOTICES
February 21, 2007.
I. Introduction
On December 18, 2006, the Chicago
Board Options Exchange, Incorporated
(‘‘CBOE’’ or ‘‘Exchange’’) 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
establish a permit program for CBSX,
the Exchange’s proposed stock-trading
facility (‘‘Permit Program’’). The
proposed rule change was published for
comment in the Federal Register on
December 29, 2006.3 The Commission
received no comments regarding the
proposal. This order approves the
proposed rule change.
II. Description of the Proposal
CBSX will be a facility of the
Exchange and will serve as the
Exchange’s vehicle for trading nonoption securities. The Exchange
proposed to modify its Constitution and
Rules to establish the Permit Program
and thereby allow non-CBOE seat
holders access to CBSX. The Exchange
noted that expanding access to CBSX
beyond CBOE’s options user base would
enhance liquidity on CBSX and make it
a more attractive stock trading venue.
The principal features of the Permit
Program are as follows:
• The permits may only be used for
trading stock on CBSX. A Permit does
not entitle the holder to trade options on
CBOE or to physically enter an option
trading post on the trading floor;
• Up to 100 permits may be issued;
• The Permit Program could be
terminated by the Exchange pursuant to
a rule filing approved by the
Commission. This provision is
incorporated in the Exchange’s
Constitution to allow the CBSX Permit
Program to be terminated without a
corresponding membership vote (i.e.,
the Exchange’s membership has already
approved the notion that a future
termination of the Permit Program could
occur without another membership
vote);
• Permit holders would be deemed
statutory members of CBOE.
Accordingly, they would have the same
petition and voting rights as regular
members except for matters relating to
Exchange ownership (specifically,
matters relating to demutualization,
mergers, consolidations, dissolution,
liquidation, transfer, or conversion of
assets of the Exchange), and except for
matters relating the Chicago Board of
Trade exercise right;
• Permit holders would have no
interest in the assets or property of
CBOE and would have no right to share
in any distribution by the Exchange;
• Permit holders (or an executive
officer of a Permit holder) would be
eligible to run for an at-large director
1 15
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 54987
(December 20, 2006), 71 FR 78481.
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
VerDate Aug<31>2005
15:22 Feb 26, 2007
Jkt 211001
III. Discussion
The Commission finds that the
Exchange’s proposal relating to CBSX
Permits is consistent with Section
6(b)(3) of the Act,4 which requires that
the rules of the exchange assure a fair
representation of its members in the
selection of its directors and
administration of its affairs and provide
that one or more directors shall be
representative of issuers and investors
and not be associated with a member of
the exchange, broker, or dealer. The
Commission notes that, for purposes of
the Act, Permit holders would be
considered members of CBOE. Permit
holders would be eligible to be
nominated for an at-large position on
CBOE’s Board of Directors and to serve
on the Exchange’s Nominating
Committee and would have the same
petition and voting rights as CBOE
members except for matters relating to
Exchange ownership (specifically,
matters relating to demutualization,
mergers, consolidations, dissolution,
liquidation, transfer, or conversion of
assets of the Exchange), and except for
matters relating to the Chicago Board of
Trade exercise right.5
4 15
2 17
13 17
position and a Nominating Committee
position;
• Permit holders would have to be
registered broker-dealers;
• Permits would not be transferable;
and
• All Permits would expire every
October and would be eligible for
renewal.
If there are fewer available CBSX
Permits than qualified applicants, the
Exchange will determine which of the
applicants to approve by lot. Applicants
that are affiliated will be deemed one
applicant in cases where there are fewer
available CBSX Permits than qualified
applicants.
A Permit holder and its associated
persons must comply with and be
subject to CBOE Rules to the same
extent that Exchange members and their
associated persons are obligated to
comply with and are subject to
Exchange Rules. A Permit holder and its
associated persons shall also be subject
to the disciplinary, appeals, and
arbitration jurisdiction and rules of the
Exchange and entitled to the procedural
rights under those rules to the same
extent that Exchange members and their
associated persons are subject to such
jurisdiction and rules and entitled to
such procedural rights.
PO 00000
Frm 00139
Fmt 4703
Sfmt 4703
U.S.C. 78f(b)(3).
the Exchange has represented that
Permit holders would be eligible to sit on
disciplinary panels and on any committee(s) that
5 Further,
E:\FR\FM\27FEN1.SGM
27FEN1
Federal Register / Vol. 72, No. 38 / Tuesday, February 27, 2007 / Notices
The Commission also finds that the
Exchange’s proposal relating to the
Permit Program is consistent with
Section 6(b)(5) of the Act,6 which
requires that the rules of the exchange
be designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, 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; and not be designed to
permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange has imposed various
requirements and limitations in
connection with the issuance of CBSX
Permits. In this regard, the Commission
notes that although the number of
Permits to be issued is limited to a
maximum of 100 Permits, the Exchange
will allocate Permits by lot if demand
for them exceeds 100 Permits.7
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,8 that the
proposed rule change (SR–CBOE–2006–
107) is hereby approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.9
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–3373 Filed 2–26–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55319; File No. SR–CHX–
2007–01]
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change and
Amendment No. 1 Thereto Relating to
the Use of a ‘‘SOLD’’ Indicator
February 20, 2007.
cprice-sewell on PROD1PC62 with NOTICES
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
develop trading rules. Telephone conversation
between Angelo Evangelou, Assistant General
Counsel, CBOE and David Michehl, Special
Counsel, Commission, Division of Market
Regulation, on February 16, 2007.
6 15 U.S.C. 78f(b)(5).
7 In approving this proposed rule change the
Commission notes that it has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
8 15 U.S.C. 78s(b)(2).
9 17 CFR 200.30–3(a)(12).
VerDate Aug<31>2005
15:22 Feb 26, 2007
Jkt 211001
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on January
30, 2007, the Chicago Stock Exchange,
Inc. (‘‘CHX’’ 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 CHX has filed this
proposal pursuant to Section 19(b)(3)(A)
of the Act 3 and Rule 19b–4(f)(5)
thereunder,4 which renders it effective
upon filing with the Commission. On
February 20, 2007, the Exchange filed
Amendment No. 1 to the proposed rule
change.5 The Commission is publishing
this notice to solicit comments on the
proposed rule change, as amended, from
interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
rules to specify that a ‘‘SOLD’’ indicator
must only be affixed to a trade to the
extent required by applicable
intermarket trade reporting plans.
The text of the proposed rule change
is available on the CHX’s Web site at
https://www.chx.com, the Exchange’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
CHX 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 CHX 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
The Exchange’s institutional brokers
may execute transactions in the
Exchange’s Matching System or may
report transactions through the
Exchange’s Brokerplex system.6 Under
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(5).
5 See Form 19b–4 dated February 20, 2007
(‘‘Amendment No. 1’’).
6 The Exchange’s Brokerplex system currently can
be used by CHX institutional brokers to receive and
2 17
PO 00000
Frm 00140
Fmt 4703
Sfmt 4703
8817
Article 17, Rule 3(e) of the Exchange’s
rules, if institutional brokers use the
Brokerplex system’s trade reporting
functionality, these brokers are required
to use their best efforts to report
transactions within 10 seconds after
execution. A ‘‘SOLD’’ indicator must be
affixed to the trade if this 10-second
window is exceeded.7
The CHX had established this 10second time frame for affixing the
‘‘SOLD’’ indicator as part of its new
trading model rules in the belief that the
CTA Plan would be amended to contain
a similar provision. At this point,
however, the CTA Plan has not been
amended to reflect this shorter time
frame.8
This proposal would change the
Exchange’s rules to specify that the
‘‘SOLD’’ indicator must only be affixed
to a trade to the extent that the indicator
is required by an intermarket trade
reporting plan, such as the CTA Plan.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the Act 9
in general and furthers the objectives of
Section 6(b)(5) 10 in particular, in that it
is designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, 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 that
is not necessary or appropriate in
furtherance of the purposes of the Act.
enter orders, manage their orders, route orders to
the Exchange’s Matching System and other
destinations for execution and report executed
trades.
7 A ‘‘SOLD’’ indicator is used, when reporting
trades in Tape A and B securities, to identify trades
that are being reported late (i.e., after some delay
from the time of execution) and out of sequence.
The Consolidated Tape Association Plan (the ‘‘CTA
Plan’’), which governs trade reporting in Tape A
and B securities, provides that a market should
‘‘designate as ‘late’ any last sale price not collected
and reported’’ within 90 seconds after the execution
occurs.
8 The CTA Plan and specifications currently
provide that the indicator must be placed on trades
reported more than 90 seconds after they are
executed.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
E:\FR\FM\27FEN1.SGM
27FEN1
Agencies
[Federal Register Volume 72, Number 38 (Tuesday, February 27, 2007)]
[Notices]
[Pages 8816-8817]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-3373]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55326; File No. SR-CBOE-2006-107]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Order Granting Approval to Proposed Rule Change Regarding
a Permit Program for CBSX
February 21, 2007.
I. Introduction
On December 18, 2006, the Chicago Board Options Exchange,
Incorporated (``CBOE'' or ``Exchange'') 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 establish a permit program for
CBSX, the Exchange's proposed stock-trading facility (``Permit
Program''). The proposed rule change was published for comment in the
Federal Register on December 29, 2006.\3\ The Commission received no
comments regarding the proposal. This order approves the proposed rule
change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 54987 (December 20,
2006), 71 FR 78481.
---------------------------------------------------------------------------
II. Description of the Proposal
CBSX will be a facility of the Exchange and will serve as the
Exchange's vehicle for trading non-option securities. The Exchange
proposed to modify its Constitution and Rules to establish the Permit
Program and thereby allow non-CBOE seat holders access to CBSX. The
Exchange noted that expanding access to CBSX beyond CBOE's options user
base would enhance liquidity on CBSX and make it a more attractive
stock trading venue. The principal features of the Permit Program are
as follows:
The permits may only be used for trading stock on CBSX. A
Permit does not entitle the holder to trade options on CBOE or to
physically enter an option trading post on the trading floor;
Up to 100 permits may be issued;
The Permit Program could be terminated by the Exchange
pursuant to a rule filing approved by the Commission. This provision is
incorporated in the Exchange's Constitution to allow the CBSX Permit
Program to be terminated without a corresponding membership vote (i.e.,
the Exchange's membership has already approved the notion that a future
termination of the Permit Program could occur without another
membership vote);
Permit holders would be deemed statutory members of CBOE.
Accordingly, they would have the same petition and voting rights as
regular members except for matters relating to Exchange ownership
(specifically, matters relating to demutualization, mergers,
consolidations, dissolution, liquidation, transfer, or conversion of
assets of the Exchange), and except for matters relating the Chicago
Board of Trade exercise right;
Permit holders would have no interest in the assets or
property of CBOE and would have no right to share in any distribution
by the Exchange;
Permit holders (or an executive officer of a Permit
holder) would be eligible to run for an at-large director position and
a Nominating Committee position;
Permit holders would have to be registered broker-dealers;
Permits would not be transferable; and
All Permits would expire every October and would be
eligible for renewal.
If there are fewer available CBSX Permits than qualified
applicants, the Exchange will determine which of the applicants to
approve by lot. Applicants that are affiliated will be deemed one
applicant in cases where there are fewer available CBSX Permits than
qualified applicants.
A Permit holder and its associated persons must comply with and be
subject to CBOE Rules to the same extent that Exchange members and
their associated persons are obligated to comply with and are subject
to Exchange Rules. A Permit holder and its associated persons shall
also be subject to the disciplinary, appeals, and arbitration
jurisdiction and rules of the Exchange and entitled to the procedural
rights under those rules to the same extent that Exchange members and
their associated persons are subject to such jurisdiction and rules and
entitled to such procedural rights.
III. Discussion
The Commission finds that the Exchange's proposal relating to CBSX
Permits is consistent with Section 6(b)(3) of the Act,\4\ which
requires that the rules of the exchange assure a fair representation of
its members in the selection of its directors and administration of its
affairs and provide that one or more directors shall be representative
of issuers and investors and not be associated with a member of the
exchange, broker, or dealer. The Commission notes that, for purposes of
the Act, Permit holders would be considered members of CBOE. Permit
holders would be eligible to be nominated for an at-large position on
CBOE's Board of Directors and to serve on the Exchange's Nominating
Committee and would have the same petition and voting rights as CBOE
members except for matters relating to Exchange ownership
(specifically, matters relating to demutualization, mergers,
consolidations, dissolution, liquidation, transfer, or conversion of
assets of the Exchange), and except for matters relating to the Chicago
Board of Trade exercise right.\5\
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f(b)(3).
\5\ Further, the Exchange has represented that Permit holders
would be eligible to sit on disciplinary panels and on any
committee(s) that develop trading rules. Telephone conversation
between Angelo Evangelou, Assistant General Counsel, CBOE and David
Michehl, Special Counsel, Commission, Division of Market Regulation,
on February 16, 2007.
---------------------------------------------------------------------------
[[Page 8817]]
The Commission also finds that the Exchange's proposal relating to
the Permit Program is consistent with Section 6(b)(5) of the Act,\6\
which requires that the rules of the exchange be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, 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; and not be designed to
permit unfair discrimination between customers, issuers, brokers, or
dealers. The Exchange has imposed various requirements and limitations
in connection with the issuance of CBSX Permits. In this regard, the
Commission notes that although the number of Permits to be issued is
limited to a maximum of 100 Permits, the Exchange will allocate Permits
by lot if demand for them exceeds 100 Permits.\7\
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b)(5).
\7\ In approving this proposed rule change the Commission notes
that it has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\8\ that the proposed rule change (SR-CBOE-2006-107) is hereby
approved.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
---------------------------------------------------------------------------
\9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-3373 Filed 2-26-07; 8:45 am]
BILLING CODE 8010-01-P