Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Granting Approval of Proposed Rule Change To Amend the Hybrid Opening System Opening Rotations Rules, 57619-57620 [E7-19905]
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rwilkins on PROD1PC63 with NOTICES
Federal Register / Vol. 72, No. 195 / Wednesday, October 10, 2007 / Notices
rule change is consistent with Section
6(b)(5) of the Act,14 which requires,
among other things, that the Exchange’s
rules be 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.
The Commission believes that the
changes proposed by BSE should result
in a more efficient process for members
to register and to keep information
current and should make regulatory
information with respect to members
and their associated persons more
readily available to regulators as well as
the public. Furthermore, it will align the
rules of the Exchange regarding
electronic registration more closely with
those at other exchanges.
In addition, the Commission believes
the proposed rule change is consistent
with the Act because it is designed to
allow BSE to discipline or sanction
members under its MRVP for violation
of the provisions of the rules of the
Exchange for these rules. In approving
the proposed rule change, the
Commission in no way minimizes the
importance of compliance with
Exchange rules and all other rules
subject to the imposition of fines under
the MRVP. The Commission believes
that the violation of a self-regulatory
organization’s rules, as well as
Commission rules, is a serious matter.
However, in an effort to provide the
Exchange with greater flexibility in
addressing certain violations of its rules,
the MRVP provides a reasonable means
to address violations that do not rise to
the level of requiring formal BSE
disciplinary proceedings. The
Commission expects that BSE will
continue to conduct surveillance with
due diligence, and make a
determination based on its findings
whether fines of more or less than the
recommended amount are appropriate
for violations of Exchange rules under
the MRVP, on a case by case basis, or
if a violation requires formal
disciplinary action.
BSE has requested that the
Commission find good cause for
approving the proposed rule change
before the thirtieth day after publication
of the notice in the Federal Register.
The Commission believes that granting
accelerated approval of the proposal
will allow the Exchange to migrate to
Web CRD on its intended date, October
1, 2007. The Commission notes that it
has approved similar proposals to
14 15
U.S.C. 78f(b)(5).
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implement electronic registration for
Chicago Board Options Exchange,
Incorporated 15 and the Philadelphia
Stock Exchange.16 The Commission
believes that BSE’s proposal raises no
new regulatory issues, and it should
make regulatory information with
respect to its members and their
associated persons more readily
available without further delay.
Accordingly, the Commission finds
good cause, consistent with Section
19(b)(2) of the Act,17 to grant accelerated
approval to the proposed rule change
before the thirtieth day after the
publication of notice thereof in the
Federal Register.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,18 that the
proposed rule change (SR–BSE–2007–
25), as modified by Amendments No. 1,
2, and 3, be, and it hereby is, approved
on an accelerated basis.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.19
Nancy M. Morris,
Secretary.
[FR Doc. E7–19906 Filed 10–9–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56600; File No. SR-CBOE–
2007–88]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Order Granting Approval
of Proposed Rule Change To Amend
the Hybrid Opening System Opening
Rotations Rules
October 2, 2007.
On July 25, 2007, 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
amend its opening rotations rules
conducted via the Hybrid Opening
System (‘‘HOSS’’). The proposed rule
15 See Securities Exchange Act Release No. 46308
(August 2, 2002), 67 FR 51905 (August 9, 2002)
(SR–CBOE–2001–66).
16 See Securities Exchange Act Release No. 54960
(December 12, 2006), 71 FR 77851 (December 27,
2006) (SR–Phlx–2006–83).
17 15 U.S.C. 78s(b)(2).
18 Id.
19 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b-4.
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57619
change was published in the Federal
Register on August 29, 2007.3 The
Commission received no comments on
the proposal. This order approves the
proposed rule change.
HOSS is the Exchange’s automated
system for initiating trading at the
beginning of each trading day. The
Exchange proposes to amend HOSS
procedures contained in CBOE Rule
6.2B. HOSS procedures currently
provide that HOSS initiates an opening
rotation for an options class at a
randomly selected time within a
number of seconds after the primary
market 4 for the underlying security
opens (or after 8:30 a.m. (Central Time)
for index options).5
The Exchange proposes to permit
HOSS to initiate the opening rotation for
an options class after the opening of the
underlying security on: (1) The primary
listing market; (2) the primary volume
market,6 or (3) the first market to open
the underlying security. Determinations
on the particular configuration for the
market for the underlying security
would be made on a class-by-class basis
by the appropriate Exchange Procedure
Committee and announced to the
membership via a Regulatory Circular.
After a careful review of the proposed
rule change, the Commission finds that
the proposed rule change is consistent
with the requirements of the Act and the
regulations thereunder applicable to a
national securities exchange.7 In
particular, the Commission believes that
the proposed rule change is consistent
with Section 6(b)(5) of the Act,8 which
requires that the rules of an exchange be
designed 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 Commission
believes that the proposal will provide
3 See Securities Exchange Act Release No. 56302
(August 22, 2007), 72 FR 49752.
4 According to the Exchange, for purposes of
CBOE Rule 6.2B, the Exchange has interpreted the
‘‘primary market’’ to be the primary listing market.
5 According to the Exchange, for purposes of
CBOE Rule 6.2B, the Exchange determines when
the underlying market ‘‘opens’’, on a class-by-class
basis, to be either the opening trade and/or opening
quote (or whichever occurs first). Once the
underlying market opens, HOSS initiates the
overlying option class opening and sends a Rotation
Notice to market participants. Thereafter, HOSS
would open the series of a class in a random order.
6 Proposed CBOE Rule 6.2B(b) would define the
primary volume market as the market with the most
liquidity in that underlying security for the
previous two calendar months.
7 In approving the proposed rule change, the
Commission notes that it has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
8 15 U.S.C. 78f(b)(5).
E:\FR\FM\10OCN1.SGM
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57620
Federal Register / Vol. 72, No. 195 / Wednesday, October 10, 2007 / Notices
the Exchange more flexibility to
determine when to permit the HOSS
opening rotation process to begin, and
should contribute to the Exchange’s
ability to conduct openings in a fair and
orderly manner. Further, the
Commission notes that it previously
approved a similar rule changes for the
American Stock Exchange LLC.9
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,10 that the
proposed rule change (SR-CBOE–2007–
88) be, and hereby is, approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.11
Nancy M. Morris,
Secretary.
[FR Doc. E7–19905 Filed 10–9–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56602; File No. SR–CBOE–
2007–116]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to the
Exchange’s Hybrid Electronic Quoting
Fee
October 3, 2007.
rwilkins on PROD1PC63 with NOTICES
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 October
1, 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 the
Exchange under Section 19(b)(3)(A),3
and Rule 19b–4(f)(2) thereunder,4 which
renders the proposal effective upon
filing with the Commission. The
Commission is publishing this notice to
9 See Securities Exchange Act Release No. 55272
(February 12, 2007), 72 FR 7779 (February 20, 2007)
(approving SR-Amex-2006–77, permitting the
American Stock Exchange LLC to open its trading
rotation once the underlying security has opened
for trading in any market).
10 15 U.S.C. 78s(b)(2).
11 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)(2).
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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
CBOE proposes to amend its Hybrid
Electronic Quoting Fee. The text of the
proposed rule change is available at the
Exchange, the Commission’s Public
Reference Room, and https://
www.cboe.org/legal.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
CBOE included statements concerning
the purpose of, and basis for, the
proposed rule change and discussed any
comments it received on the proposal.
The text of these statements may be
examined at the places specified in Item
IV below. CBOE has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this proposed rule
change is to amend CBOE’s Hybrid
Electronic Quoting Fee, which is
applicable to all Market-Makers, RMMs,
DPMs and e-DPMs (collectively
‘‘liquidity providers’’) in order to
promote and encourage more efficient
quoting.5 The fee has been effective
since February 1, 2007.
Under the existing fee, all liquidity
providers who are submitting electronic
quotations to the Exchange in Hybrid
and Hybrid 2.0 option classes are
assessed a monthly fee of $450. Each
month, each liquidity provider receives
an allocation of 1,000,000 quotes. If a
liquidity provider submits to CBOE
more than 1,000,000 quotes in a month,
the liquidity provider is assessed an
additional fee of $.03 per 1,000 quotes
in excess of 1,000,000.
As amended, CBOE will continue to
assess all liquidity providers who are
submitting electronic quotations to the
Exchange in Hybrid and Hybrid 2.0
option classes a monthly fee of $450 per
membership utilized. However, CBOE
proposes to assess or credit liquidity
5 Because the Hybrid Quoting Fee is only
applicable in Hybrid and Hybrid 2.0 option classes,
it does not apply to LMMs, which currently only
function in Hybrid 3.0 option classes. Therefore, the
Exchange is proposing to delete the reference to
LMMs in the Hybrid Electronic Quoting Fee section
of Item 17 of the Fees Schedule.
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Fmt 4703
Sfmt 4703
providers a Hybrid Electronic Quoting
Fee that varies depending on: (i) The
quality of the liquidity providers’
quotation (a quotation is a bid and an
offer); and (ii) the value of the
underlying security and CBOE’s bid in
the option series.6 CBOE also proposes
to vary the fee slightly in ‘‘high
premium series’’ 7 with respect to
Market-Makers and RMMs on the one
hand, and DPMs and e-DPMs on the
other hand due to the difference in their
quoting obligations. Market-Makers and
RMMs have an obligation to
continuously quote 60% of the series in
each of their appointed classes that have
a time to expiration of less than 9
months. DPMs and e-DPMs, however,
have a greater obligation and must
continuously quote either 100% of the
series in their appointed classes (DPMs)
or 90% if the series in their appointed
classes (e-DPMs). CBOE generally has
found that there are a significant
amount of quotations in high premium
series, but very little volume.
Specifically, the Hybrid Electronic
Quoting Fee will be assessed/credited as
follows:
If the value of the underlying security
is less than or equal to $100 and CBOE’s
bid is less than or equal to $10, or if the
value of the underlying security is
greater than $100 and CBOE’s bid is less
than or equal to 15% of the underlying
security, then:
• A liquidity provider’s quotation
that improves the NBBO on at least one
side of the market will be credited $0.02
per 1,000 quotes.
• A liquidity provider’s quotation
that matches the NBBO on both sides of
the market will be credited $0.01 per
1,000 quotes.
• A liquidity provider’s quotation
that matches the NBBO on only one side
of the market will be assessed a fee of
$0.02 per 1,000 quotes.
• A liquidity provider’s quotation
that matches the CBOE BBO (which is
not the NBBO) on at least one side of the
market will be assessed a fee of $0.02
per 1,000 quotes.
• A liquidity provider’s quotation
that is a duplicate quote,8 or that does
6 The value of the underlying security is the
closing price of the underlying security on the
preceding trading day. The bid is the closing bid in
the option series at CBOE on the preceding trading
day.
7 For purposes of this fee, ‘‘high premium series’’
are those series in which the value of the
underlying security is less than or equal to $100
and CBOE’s bid is greater than $10, or those series
in which the value of the underlying security is
greater than $100 and CBOE’s bid is greater than
15% of the underlying security.
8 A ‘‘duplicate quote’’ is one where there is no
change in bid and offer price and size. See proposed
Item 17 of the Fees Schedule, at note 5, as set forth
in CBOE’s Form 19b–4.
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Agencies
[Federal Register Volume 72, Number 195 (Wednesday, October 10, 2007)]
[Notices]
[Pages 57619-57620]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-19905]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56600; File No. SR-CBOE-2007-88]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Order Granting Approval of Proposed Rule Change To Amend
the Hybrid Opening System Opening Rotations Rules
October 2, 2007.
On July 25, 2007, 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 amend its opening rotations
rules conducted via the Hybrid Opening System (``HOSS''). The proposed
rule change was published in the Federal Register on August 29,
2007.\3\ The Commission received no comments on 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. 56302 (August 22,
2007), 72 FR 49752.
---------------------------------------------------------------------------
HOSS is the Exchange's automated system for initiating trading at
the beginning of each trading day. The Exchange proposes to amend HOSS
procedures contained in CBOE Rule 6.2B. HOSS procedures currently
provide that HOSS initiates an opening rotation for an options class at
a randomly selected time within a number of seconds after the primary
market \4\ for the underlying security opens (or after 8:30 a.m.
(Central Time) for index options).\5\
---------------------------------------------------------------------------
\4\ According to the Exchange, for purposes of CBOE Rule 6.2B,
the Exchange has interpreted the ``primary market'' to be the
primary listing market.
\5\ According to the Exchange, for purposes of CBOE Rule 6.2B,
the Exchange determines when the underlying market ``opens'', on a
class-by-class basis, to be either the opening trade and/or opening
quote (or whichever occurs first). Once the underlying market opens,
HOSS initiates the overlying option class opening and sends a
Rotation Notice to market participants. Thereafter, HOSS would open
the series of a class in a random order.
---------------------------------------------------------------------------
The Exchange proposes to permit HOSS to initiate the opening
rotation for an options class after the opening of the underlying
security on: (1) The primary listing market; (2) the primary volume
market,\6\ or (3) the first market to open the underlying security.
Determinations on the particular configuration for the market for the
underlying security would be made on a class-by-class basis by the
appropriate Exchange Procedure Committee and announced to the
membership via a Regulatory Circular.
---------------------------------------------------------------------------
\6\ Proposed CBOE Rule 6.2B(b) would define the primary volume
market as the market with the most liquidity in that underlying
security for the previous two calendar months.
---------------------------------------------------------------------------
After a careful review of the proposed rule change, the Commission
finds that the proposed rule change is consistent with the requirements
of the Act and the regulations thereunder applicable to a national
securities exchange.\7\ In particular, the Commission believes that the
proposed rule change is consistent with Section 6(b)(5) of the Act,\8\
which requires that the rules of an exchange be designed 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 Commission believes that the proposal will provide
[[Page 57620]]
the Exchange more flexibility to determine when to permit the HOSS
opening rotation process to begin, and should contribute to the
Exchange's ability to conduct openings in a fair and orderly manner.
Further, the Commission notes that it previously approved a similar
rule changes for the American Stock Exchange LLC.\9\
---------------------------------------------------------------------------
\7\ In approving the proposed rule change, the Commission notes
that it has considered the proposed rule's impact on efficiency,
competition, and capital formation. 15 U.S.C. 78c(f).
\8\ 15 U.S.C. 78f(b)(5).
\9\ See Securities Exchange Act Release No. 55272 (February 12,
2007), 72 FR 7779 (February 20, 2007) (approving SR-Amex-2006-77,
permitting the American Stock Exchange LLC to open its trading
rotation once the underlying security has opened for trading in any
market).
---------------------------------------------------------------------------
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\10\ that the proposed rule change (SR-CBOE-2007-88) be, and hereby
is, approved.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Nancy M. Morris,
Secretary.
[FR Doc. E7-19905 Filed 10-9-07; 8:45 am]
BILLING CODE 8011-01-P