Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend Two Pilot Programs Related to the Exchange's Automated Improvement Mechanism Until July 18, 2008, 40910-40911 [E7-14311]

Download as PDF 40910 Federal Register / Vol. 72, No. 142 / Wednesday, July 25, 2007 / Notices finds good cause, consistent with Section 19(b)(2) of the Exchange Act,10 to approve the proposed rule change on an accelerated basis. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,11 that the proposed rule change (SR–Amex–2007– 64), be and it hereby is, approved on an accelerated basis. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–14358 Filed 7–24–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56094; File No. SR–CBOE– 2007–80] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend Two Pilot Programs Related to the Exchange’s Automated Improvement Mechanism Until July 18, 2008 July 18, 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 July 13, 2007, the Chicago Board Options Exchange, Incorporated (‘‘Exchange’’ or ‘‘CBOE’’) 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 Exchange. The Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 which renders the proposed rule change effective upon filing with the Commission. 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 rwilkins on PROD1PC63 with NOTICES CBOE proposes to extend two pilot programs related to the Exchange’s 10 15 U.S.C. 78s(b)(2). U.S.C. 78s(b)(2). 12 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). 4 17 CFR 240.19b–4(f)(6). 11 15 VerDate Aug<31>2005 19:31 Jul 24, 2007 Jkt 211001 Automated Improvement Mechanism (‘‘AIM’’) for one year, until July 18, 2008. The text of the proposed rule change is available on the Exchange’s Web site (http://www.cboe.com), at the Exchange’s Office of the Secretary, 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 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 In February 2006, CBOE obtained approval of a filing adopting the AIM auction process.5 AIM exposes certain orders electronically to an auction process to provide such orders with the opportunity to receive an execution at an improved price. The AIM auction is available only for orders that an Exchange member represents as agent and for which a second order of the same size as the ‘‘Agency Order’’ (and on the opposite side of the market) is also submitted (effectively stopping the Agency Order at a given price). Two components of AIM were approved on a pilot basis: (1) That there is no minimum size requirement for orders to be eligible for the auction; and (2) that the auction will conclude prematurely anytime there is a quote lock on the Exchange pursuant to Exchange Rule 6.45A(d).6 In connection with the pilot programs, the Exchange has submitted to the Commission reports providing detailed AIM auction and order execution data. In July 2006, the Exchange extended the pilot program until July 18, 2007.7 The 5 See Securities Exchange Act Release No. 53222 (February 3, 2006), 71 FR7089 (February 10, 2006) (approving SR–CBOE–2005–60). 6 That rule relates to situations where a MarketMaker’s quote interacts with the quote of another CBOE Market-Maker (i.e. when internal quotes lock). 7 See Securities Exchange Act Release No. 54147 (July 14, 2006), 71 FR 41487 (July 21, 2006) (SR– CBOE–2006–64). PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 proposed rule change merely extends the duration of the pilot programs until July 18, 2008. Extending the pilots for an additional year will allow the Commission more time to consider the impact of the pilot programs on AIM order executions. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with Section 6(b) of the Act,8 in general, and furthers the objectives of Section 6(b)(5) of the Act,9 in particular, in that by allowing the Commission additional time to evaluate the AIM pilot programs, it should serve to 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 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 The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b–4(f)(6) 11 thereunder because the proposal does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) by its terms, 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.12 A proposed rule change filed under Rule 19b–4(f)(6) normally may not 8 15 U.S.C. 78f(b). U.S.C. 78(f)(b)(5). 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b–4(f)(6). 12 Rule 19b–4(f)(6)(iii) under the Act requires the Exchange to provide the Commission notice of the Exchange’s 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. See 17 CFR 240.19b–4(f)(6)(iii). The Commission deems this requirement to have been satisfied by the notice of intent filed by the Exchange on July 10, 2007. 9 15 E:\FR\FM\25JYN1.SGM 25JYN1 Federal Register / Vol. 72, No. 142 / Wednesday, July 25, 2007 / Notices become operative prior to 30 days after the date of filing. 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 period. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest, because the proposal would allow the pilots to continue without interruption until July 18, 2008.14 For this reason, the Commission designates the proposal to be operative upon filing with the Commission. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such proposed 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.15 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2007–80 on the subject line. rwilkins on PROD1PC63 with NOTICES 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–2007–80. 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 (http://www.sec.gov/ rules/sro.shtml). Copies of the 13 17 CFR 240.19b–4(f)(6)(iii). 14 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 15 15 U.S.C. 78s(b)(3)(C). VerDate Aug<31>2005 19:31 Jul 24, 2007 Jkt 211001 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, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. 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–2007–80 and should be submitted on or before August 15, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.16 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–14311 Filed 7–24–07; 8:45 am] BILLING CODE 8010–01–P 40911 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 ISE is proposing to amend its Schedule of Fees to add a clarifying sentence to resolve an ambiguity with respect to fees charged to MidPoint Match executions. The text of the proposed rule change is available at http://www.iseoptions.com/legal/ proposed_rule_changes.asp and 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 these 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 Statutory Basis for, the Proposed Rule Change 1. Purpose SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56091; File No. SR–ISE– 2007–57] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Clarifying the Fee Schedule July 18, 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 July 2, 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, II and III below, which Items have been substantially prepared by the Exchange. The Commission is publishing this notice to solicit PO 00000 16 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. The purpose of this proposed rule change is to add a clarifying sentence to the Schedule of Fees to resolve an ambiguity with respect to fees charged to MidPoint Match executions. The Exchange currently waives fees in the circumstances where the same Member enters MidPoint Match orders that execute against each other in the MidPoint Match System. Additionally, the Exchange offers discounted fees based on a Member’s average daily volume (‘‘ADV’’) via a tiered schedule that provides increased discounts as a Member’s ADV increases. The Exchange proposes to add a sentence clarifying that transactions for which fees are waived do not count towards the ADV discounts and do not accrue market data revenue. 2. Statutory Basis The basis under the Act for this proposed rule change is the requirement under section 6(b)(4) 3 that the Exchange provide for the equitable allocation of reasonable dues, fees, and other charges 1 15 Frm 00087 Fmt 4703 Sfmt 4703 3 15 E:\FR\FM\25JYN1.SGM U.S.C. 78f(b)(4). 25JYN1

Agencies

[Federal Register Volume 72, Number 142 (Wednesday, July 25, 2007)]
[Notices]
[Pages 40910-40911]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-14311]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56094; File No. SR-CBOE-2007-80]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Extend Two Pilot Programs Related to the Exchange's 
Automated Improvement Mechanism Until July 18, 2008

July 18, 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 July 13, 2007, the Chicago Board Options Exchange, Incorporated 
(``Exchange'' or ``CBOE'') 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 Exchange. The Exchange filed the proposed rule change pursuant to 
Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ 
which renders the proposed rule change 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).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE proposes to extend two pilot programs related to the 
Exchange's Automated Improvement Mechanism (``AIM'') for one year, 
until July 18, 2008. The text of the proposed rule change is available 
on the Exchange's Web site (http://www.cboe.com), at the Exchange's 
Office of the Secretary, 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 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
    In February 2006, CBOE obtained approval of a filing adopting the 
AIM auction process.\5\ AIM exposes certain orders electronically to an 
auction process to provide such orders with the opportunity to receive 
an execution at an improved price. The AIM auction is available only 
for orders that an Exchange member represents as agent and for which a 
second order of the same size as the ``Agency Order'' (and on the 
opposite side of the market) is also submitted (effectively stopping 
the Agency Order at a given price).
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 53222 (February 3, 
2006), 71 FR7089 (February 10, 2006) (approving SR-CBOE-2005-60).
---------------------------------------------------------------------------

    Two components of AIM were approved on a pilot basis: (1) That 
there is no minimum size requirement for orders to be eligible for the 
auction; and (2) that the auction will conclude prematurely anytime 
there is a quote lock on the Exchange pursuant to Exchange Rule 
6.45A(d).\6\ In connection with the pilot programs, the Exchange has 
submitted to the Commission reports providing detailed AIM auction and 
order execution data. In July 2006, the Exchange extended the pilot 
program until July 18, 2007.\7\ The proposed rule change merely extends 
the duration of the pilot programs until July 18, 2008. Extending the 
pilots for an additional year will allow the Commission more time to 
consider the impact of the pilot programs on AIM order executions.
---------------------------------------------------------------------------

    \6\ That rule relates to situations where a Market-Maker's quote 
interacts with the quote of another CBOE Market-Maker (i.e. when 
internal quotes lock).
    \7\ See Securities Exchange Act Release No. 54147 (July 14, 
2006), 71 FR 41487 (July 21, 2006) (SR-CBOE-2006-64).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Act,\8\ in general, and furthers the objectives of 
Section 6(b)(5) of the Act,\9\ in particular, in that by allowing the 
Commission additional time to evaluate the AIM pilot programs, it 
should serve to 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78(f)(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 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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) \11\ thereunder 
because the proposal does not: (i) Significantly affect the protection 
of investors or the public interest; (ii) impose any significant burden 
on competition; and (iii) by its terms, 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.\12\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ Rule 19b-4(f)(6)(iii) under the Act requires the Exchange 
to provide the Commission notice of the Exchange's 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. See 17 CFR 240.19b-4(f)(6)(iii). The 
Commission deems this requirement to have been satisfied by the 
notice of intent filed by the Exchange on July 10, 2007.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
not

[[Page 40911]]

become operative prior to 30 days after the date of filing. 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 period. The Commission 
believes that waiver of the 30-day operative delay is consistent with 
the protection of investors and the public interest, because the 
proposal would allow the pilots to continue without interruption until 
July 18, 2008.\14\ For this reason, the Commission designates the 
proposal to be operative upon filing with the Commission.
---------------------------------------------------------------------------

    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such proposed 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.\15\
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------

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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2007-80 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-2007-80. 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 (http://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, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of the Exchange. 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-2007-80 and should be 
submitted on or before August 15, 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. E7-14311 Filed 7-24-07; 8:45 am]
BILLING CODE 8010-01-P