Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change as Modified by Amendment No. 1 Thereto To Broaden the Application of Existing Transaction Fees for VIX Options to Options on All Volatility Indexes Calculated by CBOE, 59315-59316 [E7-20619]

Download as PDF Federal Register / Vol. 72, No. 202 / Friday, October 19, 2007 / Notices constitute a substantial portion of a meeting. Annually, the Chair compiles a report of pay issues discussed and concluded recommendations. These reports are available to the public, upon written request to the Committee. The public is invited to submit material in writing to the Chair on Federal Wage System pay matters felt to be deserving of the Committee’s attention. Additional information on these meetings may be obtained by contacting the Committee at U.S. Office of Personnel Management, Federal Prevailing Rate Advisory Committee, Room 5526, 1900 E Street, NW., Washington, DC 20415, (202) 606–2838. Dated: October 15, 2007. Charles E. Brooks, Chairman, Federal Prevailing Rate Advisory Committee. [FR Doc. E7–20646 Filed 10–18–07; 8:45 am] BILLING CODE 6325–49–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56660; File No. SR–CBOE– 2007–115] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change as Modified by Amendment No. 1 Thereto To Broaden the Application of Existing Transaction Fees for VIX Options to Options on All Volatility Indexes Calculated by CBOE pwalker on PROD1PC71 with NOTICES October 15, 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 September 27, 2007, 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. On October 4, 2007, CBOE filed Amendment No. 1 to the proposed rule change. The Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(2) thereunder,4 which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit 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)(2). 2 17 VerDate Aug<31>2005 16:46 Oct 18, 2007 Jkt 214001 comments on the proposed rule change, as amended, from interested persons. 59315 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change contract for public customer transactions. In addition, there is a $.04 surcharge fee currently assessed to nonpublic customer transactions in VIX options.8 The Exchange believes the rule change will further the Exchange’s goal of introducing new products to the marketplace that are competitively priced.9 The Exchange proposes to replace the two references to ‘‘VIX’’ in the Fees Schedule with the category ‘‘VOLATILITY INDEXES.’’ The transaction fees for options on ‘‘VOLATILITY INDEXES’’ will apply to currently listed volatility index options and volatility index options to be listed in the future. The impetus for this rule change is the launch of options on the CBOE Nasdaq-100 Volatility Index (‘‘VXN’’) and on the CBOE Russell 2000 Volatility Index (‘‘RVX’’).10 The Exchange represents that the surcharge fee on all non-public customer transactions in options on volatility indexes is to help the Exchange recoup license fees the Exchange must pay to the respective reporting authorities for the options that the Exchange uses to calculate the volatility indexes (e.g., The Nasdaq Stock Market, Inc. and The Frank Russell Company). This surcharge fee is currently assessed on non-public customer transaction options on the Standard & Poor 100 Index (‘‘OEX’’ and ‘‘XEO’’), options on the Standard & Poor 500 Index (‘‘SPX’’) and options on the VIX. 1. Purpose 2. Statutory Basis I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change CBOE proposes to amend its Fees Schedule to broaden the application of its existing fees for transactions in CBOE Volatility Index (‘‘VIX’’) options to transactions in options on all volatility indexes that are calculated by the Exchange. The text of the proposed rule change is available on the Exchange’s Web site (https://www.cboe.org/Legal), 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, CBOE 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. This rule change proposes to extend the existing fees for transactions in VIX options to options on all volatility indexes calculated by the Exchange. Currently, the established transaction fees for VIX options are: $0.20 per contract for Market-Makers, Designated Primary Market-Makers and Remote Market-Makers;5 $0.20 per contract for member firm proprietary transactions; $0.25 per contract for manually executed broker-dealer transactions;6 $0.45 per contract for electronically executed broker-dealer transactions (i.e., broker-dealer orders that are automatically executed on the CBOE Hybrid Trading System),7 and $0.40 per 5 This fee is set forth in the ‘‘Index Options’’ section at paragraph II of the Fees Schedule and is the standard rate that is subject to the Liquidity Provider Sliding Scale as set forth in Footnote 10 to the Fees Schedule. 6 This fee is set forth in the ‘‘Index Options’’ section at paragraph IV (4th bullet point) of the Fees Schedule. 7 This fee is set forth in the ‘‘Index Options’’ section at paragraph IV (5th bullet point) of the Fees Schedule. Broker-dealer manual and electronic PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 The proposed rule change is consistent with Section 6(b) of the Act,11 in general, and furthers the objectives of Section 6(b)(4) 12 of the Act, in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges transaction fees will apply to broker-dealer orders (orders with ‘‘B’’ origin code), non-member marketmaker orders (orders with ‘‘N’’ origin code) and orders from specialists in the underlying security (orders with ‘‘Y’’ origin code). 8 There is also a $.04 surcharge fee assessed to non-public customers for options on the S&P 100 Index (‘‘OEX’’ and ‘‘XEO’’) and for options on the S&P 500 Index (‘‘SPX’’). 9 Linkage order fees are inapplicable for options on CBOE’s proprietary volatility indexes. 10 The Exchange previously received Commission approval to list and trade VXN and RVX options. See Securities Exchange Act Release No. 49563 (April 14, 2004), 69 FR 21589 (April 21, 2004) (order approving SR–CBOE–2003–40 to list and trade VXN options); see also Securities Exchange Act Release No. 55425 (March 8, 2007), 72 FR 12238 (March 15, 2007) (order approving SR– CBOE–2006–73 to list and trade RVX options). 11 15 U.S.C. 78f(b). 12 15 U.S.C. 78f(b)(4). E:\FR\FM\19OCN1.SGM 19OCN1 59316 Federal Register / Vol. 72, No. 202 / Friday, October 19, 2007 / Notices Paper Comments among CBOE members and other persons using its facilities. 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 Written comments on the proposed rule change were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change is subject to Section 19(b)(3)(A)(ii) of the Act 13 and subparagraph (f)(2) of Rule 19b–4 thereunder 14 because it establishes or changes a due, fee, or other charge applicable only to a member imposed by a self-regulatory organization. Accordingly, the proposal is effective upon Commission receipt of the filing. 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.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 (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2007–115 on the subject line. U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). 15 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 October 4, 2007, the date on which CBOE filed Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C). • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change pwalker on PROD1PC71 with NOTICES 14 17 16:46 Oct 18, 2007 Jkt 214001 [Release No. 34–56657; File No. SR–CHX– 2007–09] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change To All submissions should refer to File Amend the Exchange’s Institutional Number SR–CBOE–2007–115. This file Broker Rules To Add Provisions number should be included on the subject line if e-mail is used. To help the Relating to the Handling of Stop and Stop-Limit Orders Commission process and review your comments more efficiently, please use October 12, 2007. only one method. The Commission will Pursuant to Section 19(b)(1) of the post all comments on the Commission’s Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 Internet Web site (https://www.sec.gov/ notice is hereby given that on March 21, rules/sro.shtml). Copies of the 2007, the Chicago Stock Exchange, Inc. submission, all subsequent (‘‘CHX’’ or ‘‘Exchange’’) filed with the amendments, all written statements Securities and Exchange Commission with respect to the proposed rule (‘‘Commission’’) the proposed rule change that are filed with the change as described in Items I, II, and Commission, and all written III below, which Items have been communications relating to the substantially prepared by CHX. The proposed rule change between the Commission is publishing this notice to Commission and any person, other than solicit comments on the proposed rule those that may be withheld from the change from interested persons. public in accordance with the I. Self-Regulatory Organization’s provisions of 5 U.S.C. 552, will be Statement of the Terms of Substance of available for inspection and copying in the Proposed Rule Change the Commission’s Public Reference Room, 100 F Street, NE., Washington, The Exchange proposes to amend its DC 20549, on official business days rules to add new provisions to confirm between the hours of 10 a.m. and 3 p.m. how institutional brokers should handle stop and stop-limit orders. The text of Copies of such filing also will be the proposed rule change is available at available for inspection and copying at https://www.chx.com/rules/ the principal office of CBOE. All proposed_rules.htm, at the Exchange, comments received will be posted and at the Commission’s Public without change; the Commission does Reference Room. not edit personal identifying information from submissions. You II. Self-Regulatory Organization’s should submit only information that Statement of the Purpose of, and you wish to make available publicly. All Statutory Basis for, the Proposed Rule Change submissions should refer to File Number SR–CBOE–2007–115 and In its filing with the Commission, the should be submitted on or before Exchange included statements November 9, 2007. concerning the purpose of, and basis for, the proposed rule change and discussed For the Commission, by the Division of any comments it received on the Market Regulation, pursuant to delegated proposed rule change. The text of these authority.16 statements may be examined at the Florence E. Harmon, places specified in Item IV below. The Deputy Secretary. Exchange has prepared summaries, set [FR Doc. E7–20619 Filed 10–18–07; 8:45 am] forth in Sections A, B, and C below, of BILLING CODE 8011–01–P the most significant aspects of such statements. 13 15 VerDate Aug<31>2005 SECURITIES AND EXCHANGE COMMISSION 1. Purpose The Exchange proposes to add a new provision to its institutional broker rules 1 15 16 17 PO 00000 CFR 200.30–3(a)(12). Frm 00078 Fmt 4703 Sfmt 4703 2 17 E:\FR\FM\19OCN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 19OCN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 72, Number 202 (Friday, October 19, 2007)]
[Notices]
[Pages 59315-59316]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-20619]


=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56660; File No. SR-CBOE-2007-115]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change as Modified by Amendment No. 1 Thereto To Broaden the 
Application of Existing Transaction Fees for VIX Options to Options on 
All Volatility Indexes Calculated by CBOE

October 15, 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 September 27, 2007, 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. On October 4, 2007, CBOE filed Amendment No. 
1 to the proposed rule change. The Exchange filed the proposed rule 
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(2) thereunder,\4\ which renders it effective upon filing with the 
Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change, as amended, 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)(2).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE proposes to amend its Fees Schedule to broaden the application 
of its existing fees for transactions in CBOE Volatility Index 
(``VIX'') options to transactions in options on all volatility indexes 
that are calculated by the Exchange. The text of the proposed rule 
change is available on the Exchange's Web site (https://www.cboe.org/
Legal), 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, CBOE 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    This rule change proposes to extend the existing fees for 
transactions in VIX options to options on all volatility indexes 
calculated by the Exchange. Currently, the established transaction fees 
for VIX options are: $0.20 per contract for Market-Makers, Designated 
Primary Market-Makers and Remote Market-Makers;\5\ $0.20 per contract 
for member firm proprietary transactions; $0.25 per contract for 
manually executed broker-dealer transactions;\6\ $0.45 per contract for 
electronically executed broker-dealer transactions (i.e., broker-dealer 
orders that are automatically executed on the CBOE Hybrid Trading 
System),\7\ and $0.40 per contract for public customer transactions. In 
addition, there is a $.04 surcharge fee currently assessed to non-
public customer transactions in VIX options.\8\
---------------------------------------------------------------------------

    \5\ This fee is set forth in the ``Index Options'' section at 
paragraph II of the Fees Schedule and is the standard rate that is 
subject to the Liquidity Provider Sliding Scale as set forth in 
Footnote 10 to the Fees Schedule.
    \6\ This fee is set forth in the ``Index Options'' section at 
paragraph IV (4th bullet point) of the Fees Schedule.
    \7\ This fee is set forth in the ``Index Options'' section at 
paragraph IV (5th bullet point) of the Fees Schedule. Broker-dealer 
manual and electronic transaction fees will apply to broker-dealer 
orders (orders with ``B'' origin code), non-member market-maker 
orders (orders with ``N'' origin code) and orders from specialists 
in the underlying security (orders with ``Y'' origin code).
    \8\ There is also a $.04 surcharge fee assessed to non-public 
customers for options on the S&P 100 Index (``OEX'' and ``XEO'') and 
for options on the S&P 500 Index (``SPX'').
---------------------------------------------------------------------------

    The Exchange believes the rule change will further the Exchange's 
goal of introducing new products to the marketplace that are 
competitively priced.\9\ The Exchange proposes to replace the two 
references to ``VIX'' in the Fees Schedule with the category 
``VOLATILITY INDEXES.'' The transaction fees for options on 
``VOLATILITY INDEXES'' will apply to currently listed volatility index 
options and volatility index options to be listed in the future. The 
impetus for this rule change is the launch of options on the CBOE 
Nasdaq-100 Volatility Index (``VXN'') and on the CBOE Russell 2000 
Volatility Index (``RVX'').\10\
---------------------------------------------------------------------------

    \9\ Linkage order fees are inapplicable for options on CBOE's 
proprietary volatility indexes.
    \10\ The Exchange previously received Commission approval to 
list and trade VXN and RVX options. See Securities Exchange Act 
Release No. 49563 (April 14, 2004), 69 FR 21589 (April 21, 2004) 
(order approving SR-CBOE-2003-40 to list and trade VXN options); see 
also Securities Exchange Act Release No. 55425 (March 8, 2007), 72 
FR 12238 (March 15, 2007) (order approving SR-CBOE-2006-73 to list 
and trade RVX options).
---------------------------------------------------------------------------

    The Exchange represents that the surcharge fee on all non-public 
customer transactions in options on volatility indexes is to help the 
Exchange recoup license fees the Exchange must pay to the respective 
reporting authorities for the options that the Exchange uses to 
calculate the volatility indexes (e.g., The Nasdaq Stock Market, Inc. 
and The Frank Russell Company). This surcharge fee is currently 
assessed on non-public customer transaction options on the Standard & 
Poor 100 Index (``OEX'' and ``XEO''), options on the Standard & Poor 
500 Index (``SPX'') and options on the VIX.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\11\ in general, and furthers the objectives of Section 6(b)(4) 
\12\ of the Act, in particular, in that it is designed to provide for 
the equitable allocation of reasonable dues, fees, and other charges

[[Page 59316]]

among CBOE members and other persons using its facilities.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b).
    \12\ 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

    Written comments on the proposed rule change were neither solicited 
nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing proposed rule change is subject to Section 
19(b)(3)(A)(ii) of the Act \13\ and subparagraph (f)(2) of Rule 19b-4 
thereunder \14\ because it establishes or changes a due, fee, or other 
charge applicable only to a member imposed by a self-regulatory 
organization. Accordingly, the proposal is effective upon Commission 
receipt of the filing. 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.\15\
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \14\ 17 CFR 240.19b-4(f)(2).
    \15\ 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 October 4, 2007, the date on which CBOE filed 
Amendment No. 1. See 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 (https://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2007-115 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-2007-115. 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, 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 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-2007-115 and should be 
submitted on or before November 9, 2007.
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-20619 Filed 10-18-07; 8:45 am]
BILLING CODE 8011-01-P

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