Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Its Marketing Fee Program, 32690-32691 [E7-11371]
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Federal Register / Vol. 72, No. 113 / Wednesday, June 13, 2007 / Notices
Classes, the Exchange will apply similar
firm quote surveillance procedures in
Hybrid 3.0 to monitor for compliance
with members’ firm quote obligations.
D. Application of CBOE Rule 6.45B
CBOE Rule 6.45B, which relates to the
priority and allocation of trades, will
apply to trading in Hybrid 3.0 classes in
the same way it is applied to CBOE’s
existing Hybrid Trading System. For
example, multiple customer orders in
the electronic book at the same price
will be ranked based on time priority
pursuant to the priority methods set
forth in Rule 6.45B.18 Further, unlike
CBOE’s non-Hybrid classes, Hybrid 3.0
will allow (i) Each Market-Maker in the
trading crowd and (ii) all floor brokers
in the trading crowd (collectively
referred to as ‘‘in-crowd market
participants’’ or ‘‘ICMPs’’) to trade
against the electronic book pursuant to
CBOE Rule 6.45B(c).19
CBOE Rule 6.45B(d) currently governs
the interaction of quotes when they are
locked (e.g., $1.00 bid—1.00 offer).
Specifically, CBOE Rule 6.45B(d)
provides that when the quotes of two
Market-Makers interact (i.e., ‘‘quote
lock’’), either party has one second
during which it may move its quote
without obligation to trade with the
other party. If, however, the quotes
remain locked at the conclusion of onesecond, the quotes trade in full against
each other. For quote locks in Hybrid
3.0 classes, the appropriate Procedure
Committee will set the length of the
counting period, provided that the
period shall not exceed ten seconds.20
According to the Exchange, the
proposed ten second threshold is
intended to provide additional
flexibility for Market-Makers to become
acclimated with Hybrid 3.0.21
Regarding the time periods required
for order exposure in Interpretation .01
of Rule 6.45B (‘‘Principal Transactions’’)
and Interpretation .02 of Rule 6.45B
(‘‘Solicitation Orders’’), CBOE has
proposed a minimum exposure time for
Hybrid 3.0 classes, on a class by class
basis, to be at least three seconds but not
to exceed thirty seconds.22 According to
CBOE, this extended time frame for
exposure will provide additional
18 See
CBOE Rule 6.45B(a)(ii)(A)(1).
process is the same as for existing Hybrid
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19 This
classes.
20 See proposed changes to CBOE Rule 6.45B(d).
21 By comparison, the current quote lock timer for
Hybrid and Hybrid 2.0 classes may not exceed one
second. See CBOE Rule 6.45B(d)(i)(C).
22 See proposed changes to CBOE Rule 6.45B.01
and 6.45B.02.
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flexibility as ICMPs become more
acclimated with Hybrid 3.0.23
E. Opening Procedures
Only the DPM or LMM responsible for
generating the Hybrid 3.0 crowd quote
will be required to enter quotes as part
of the opening rotations in Hybrid 3.0
option classes. The DPM or LMM must
enter opening quotes in opening
rotations that comply with the legal
quote width requirements of Rule
8.7(b)(iv), and if there is not a quote
present in a series that complies with
the legal quote width requirements of
Rule 8.7(b)(iv), then that series will not
open.24 Additionally, Hybrid 3.0 will
allow public customer, broker-dealer,
Exchange Market-Maker, away MarkerMaker and Specialist participation in
the opening. Since Hybrid 3.0 is a single
quoter environment, these participants
will not be permitted to enter opening
quotes in opening rotations but will be
permitted to directly enter opening
orders in opening rotations in Hybrid
3.0 classes.25 Further, similar to the
rules for CBOE’s non-Hybrid classes,
Hybrid 3.0 also proposes to allow
special ‘‘modified’’ opening procedures
for settlement in options on the
Volatility Indexes.26
III. Discussion
The Commission has reviewed
carefully the proposed rule change, as
amended, and finds that it is consistent
with the requirements of the Act and the
rules and regulations thereunder
applicable to a national securities
exchange.27 In particular, the
Commission finds that the proposed
rule change is consistent with Section
23 By comparison, the current exposure period for
Hybrid and Hybrid 2.0 classes is at least three
seconds. See CBOE Rule 6.45B.01 and 6.45B.02.
24 This is consistent with the opening quote
requirements in CBOE’s existing Hybrid classes that
utilize CBOE’s Hybrid Opening System (‘‘HOSS’’).
See CBOE Rule 6.2B.
25 See proposed Interpretation .01 to CBOE Rule
6.2B. By comparison, currently in non-Hybrid
option classes (such as SPX and OEX), public
customers, Market-Makers and broker-dealers are
not able to directly participate in the opening
rotations (for series that utilize the Exhange’s Rapid
Opening System). For example, Market-Makers who
wish to participate on ROS in the opening rotation
in non-Hybrid option classes must submit orders
through the LMM at least ten minutes prior to the
opening of trading pursuant to CBOE Rules 6.2A
and 24.13.
26 See the ‘‘Modified HOSS Opening Procedures’’
in proposed Interpretation .01 to CBOE Rule 6.2B.
By comparison, non-Hybrid option classes that
utilize RAES and ROS have special procedures for
purposes of settlement in the volatility indexes
called ‘‘Modified ROS Opening Procedures’’
pursuant to Interpretation .03 to CBOE Rule 6.2A.
27 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).
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6(b)(5) of the Act,28 which requires that
an exchange have rules designed, among
other things, 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. The proposed rules for
Hybrid 3.0 are similar to existing rules
applicable to trading in Hybrid and/or
non-Hybrid classes. The Commission
believes that the proposed rules for the
Hybrid 3.0 platform, including those
pertaining to quoting, order eligibility in
the electronic book, automatic
execution, order priority and allocation,
are consistent with the Act.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,29 that the
proposed rule change as modified by
Amendment Nos. 1 and 2 thereto (File
No. SR–CBOE–2006–101) be, and
hereby is, approved.
For the Commission, by the Division of
Market Regulation, pursuant delegated
authority.30
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–11366 Filed 6–12–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55873; File No. SR–CBOE–
2007–50]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating to Its Marketing
Fee Program
June 7, 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 May 29,
2007, 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.
CBOE has designated this proposal as
one establishing or changing a due, fee,
or other charge imposed by CBOE under
Section 19(b)(3)(A)(ii) of the Act 3 and
28 15
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(2).
30 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
29 15
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Federal Register / Vol. 72, No. 113 / Wednesday, June 13, 2007 / Notices
Rule 19b–4(f)(2) thereunder,4 which
renders the proposal effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
above will be in effect until June 2,
2007.’’
CBOE is not amending its marketing
fee program in any other respects.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act 6 in general, and
Section 6(b)(4) of the Act 7 in particular,
in that it is designed to provide for the
equitable allocation of reasonable dues,
fees, and other charges among CBOE
members and other persons using its
facilities.
CBOE proposes to amend its
Marketing Fee Program. The text of the
proposed rule change is available at the
Exchange, the Commission’s Public
Reference Room, and https://
www.cboe.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
Exchange included statements
concerning the purpose of and basis for
the proposed rule change, and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. CBOE
has substantially prepared summaries,
set forth in Sections A, B, and C below,
of the most significant aspects of such
statements.
sroberts on PROD1PC70 with NOTICES
1. Purpose
CBOE proposes to amend its
marketing fee program in two respects.
First, CBOE proposes to amend its fees
schedule to reduce the fee that is
collected in the option classes
participating in the Penny Pilot Program
in which the marketing fee is applicable
from $0.25 to $0.10. CBOE intends to
implement this change effective June 1,
2007.
Second, CBOE’s marketing fee
program states that it is currently in
effect until June 2, 2007, which is the
date that CBOE’s pilot program
establishing its Preferred Market-Maker
Program is scheduled to expire.
However, CBOE has filed a proposed
rule change requesting permanent
approval of its Preferred Market-Maker
Program.5 Therefore, CBOE proposes to
delete the last sentence in footnote 6 of
its fees schedule that states, ‘‘CBOE’s
marketing fee program as described
CFR 240.19b–4(f)(2).
Securities Exchange Act Release No. 55826
(May 29, 2007), 72 FR 31357 (SR–CBOE–2007–47)
(permanent approval of CBOE’s Preferred MarketMaker Program).
5 See
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B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
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
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
4 17
2. Statutory Basis
The foregoing proposed rule change
has been designated as a fee change
pursuant to Section 19(b)(3)(A)(ii) of the
Act 8 and Rule 19b–4(f)(2) 9 thereunder,
because it establishes or changes a due,
fee, or other charge imposed by the
Exchange. Accordingly, the proposal
will take effect upon filing with the
Commission. At any time within 60
days of the filing of such proposed rule
change the Commission may summarily
abrogate such rule change if it appears
to the Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
8 15 U.S.C. 78s(b)(3)(A)(ii).
9 17 CFR 240.19b–4(f)(2).
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–2007–50 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–2007–50. 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 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–2007–50 and should
be submitted on or before July 5, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.10
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–11371 Filed 6–12–07; 8:45 am]
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7 15
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]]>Agencies
[Federal Register Volume 72, Number 113 (Wednesday, June 13, 2007)]
[Notices]
[Pages 32690-32691]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-11371]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55873; File No. SR-CBOE-2007-50]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change Relating to Its Marketing Fee Program
June 7, 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 May 29, 2007, 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. CBOE has designated this proposal as one
establishing or changing a due, fee, or other charge imposed by CBOE
under Section 19(b)(3)(A)(ii) of the Act \3\ and
[[Page 32691]]
Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal effective
upon filing with the Commission. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
CBOE proposes to amend its Marketing Fee Program. The text of the
proposed rule change is available at the Exchange, the Commission's
Public Reference Room, and https://www.cboe.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 Exchange included statements
concerning the purpose of and basis for the proposed rule change, and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. CBOE has 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
CBOE proposes to amend its marketing fee program in two respects.
First, CBOE proposes to amend its fees schedule to reduce the fee that
is collected in the option classes participating in the Penny Pilot
Program in which the marketing fee is applicable from $0.25 to $0.10.
CBOE intends to implement this change effective June 1, 2007.
Second, CBOE's marketing fee program states that it is currently in
effect until June 2, 2007, which is the date that CBOE's pilot program
establishing its Preferred Market-Maker Program is scheduled to expire.
However, CBOE has filed a proposed rule change requesting permanent
approval of its Preferred Market-Maker Program.\5\ Therefore, CBOE
proposes to delete the last sentence in footnote 6 of its fees schedule
that states, ``CBOE's marketing fee program as described above will be
in effect until June 2, 2007.''
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 55826 (May 29,
2007), 72 FR 31357 (SR-CBOE-2007-47) (permanent approval of CBOE's
Preferred Market-Maker Program).
---------------------------------------------------------------------------
CBOE is not amending its marketing fee program in any other
respects.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \6\ in general, and Section 6(b)(4) of the
Act \7\ in particular, in that it is designed to provide for the
equitable allocation of reasonable dues, fees, and other charges among
CBOE members and other persons using its facilities.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
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
The foregoing proposed rule change has been designated as a fee
change pursuant to Section 19(b)(3)(A)(ii) of the Act \8\ and Rule 19b-
4(f)(2) \9\ thereunder, because it establishes or changes a due, fee,
or other charge imposed by the Exchange. Accordingly, the proposal will
take effect upon filing with the Commission. At any time within 60 days
of the filing of such proposed rule change the Commission may summarily
abrogate such rule change if it appears to the Commission that such
action is necessary or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
the Act.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-CBOE-2007-50 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-2007-50. 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 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-2007-50 and should be submitted on or before July 5, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-11371 Filed 6-12-07; 8:45 am]
BILLING CODE 8010-01-P
