Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to Cancellation Fees, 71465-71467 [E7-24310]
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Federal Register / Vol. 72, No. 241 / Monday, December 17, 2007 / Notices
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The proposed rule change would
make minor technical changes to
Sections 3 and 4 of Article XVI of OCC’s
By-Laws pertaining to yield-based
Treasury options.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
OCC 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. OCC has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of such statements. 4
ebenthall on PROD1PC69 with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
The purpose of this rule change is to
make minor technical changes to
Sections 3 and 4 of Article XVI of OCC’s
By-Laws, pertaining to yield-based
Treasury options. In 2004, OCC
amended Sections 3 and 4 of Article
XVI to conform those sections to the
corresponding By-Law provisions
governing index options. 5 However,
OCC delayed implementing these
changes until they were disclosed in a
supplement to the options disclosure
document, Characteristics and Risks of
Standardized Options. 6 Distribution of
such a supplement recently began. In
connection with preparing the
supplement, OCC determined that
minor technical changes to Sections 3
and 4 of Article XVI were warranted in
order to more precisely conform these
Sections to the disclosures made in the
supplement. OCC also determined to
correct an erroneous cross-reference to
another By-Laws provision.
The proposed change is consistent
with Section 17A of the Act because it
more precisely conforms the terms of
Sections 3 and 4 of Article XVI to
disclosures made in a supplement to the
options disclosure document, thereby
increasing the protection of investors
and promoting the prompt and accurate
4 The Commission has modified parts of these
statements.
5 Securities Exchange Act Release No. 50895
(December 20, 2004), 69 FR 78085 (December 29,
2004) (File No. SR–OCC–2004–11).
6 Securities Exchange Act Release No. 55702 (May
3, 2007), 72 FR 26671 (May 10, 2007) (File No. SR–
ODD–2007–02).
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clearance and settlement of yield-based
Treasury options. The proposed rule
change is not inconsistent with the
existing rules of OCC, including any
other rules proposed to be amended.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
OCC does not believe that the
proposed rule change would impose any
burden on competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were not and are
not intended to be solicited with respect
to the proposed rule change, and none
have been received.
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)(iii) of the Act 7 and Rule
19b–4(f)(4) 8 promulgated thereunder
because the proposal effects a change in
an existing service of OCC that (A) does
not adversely affect the safeguarding of
securities or funds in the custody or
control of OCC or for which it is
responsible and (B) does not
significantly affect the respective rights
or obligations of OCC or persons using
the service. At any time within sixty
days of the filing of the proposed rule
change, the Commission could have
summarily abrogated such rule change if
it appeared to the Commission that such
action was 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:
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–OCC–2007–07 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
7 15
8 17
PO 00000
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(4).
Frm 00121
Fmt 4703
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71465
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–OCC–2007–07. 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 OCC. 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–OCC–2007–07 and should
be submitted on or before January 7,
2008.
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority. 9
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–24308 Filed 12–14–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56937; File No. SR–CBOE–
2007–127]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change and Amendment No. 1
Thereto Relating to Cancellation Fees
December 10, 2007.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
9 17
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CFR 200.30–3(a)(12).
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71466
Federal Register / Vol. 72, No. 241 / Monday, December 17, 2007 / Notices
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
1, 2007, the Chicago Board Options
Exchange, Incorporated (the ‘‘CBOE’’ or
the ‘‘Exchange’’) 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 CBOE. On
November 30, 2007, CBOE filed
Amendment No. 1 to the proposed rule
change. The CBOE has filed the
proposed rule change as one
establishing or changing a due, fee, or
other charge imposed by the Exchange
under Section 19(b)(3)(A)(ii) of the Act 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, as
amended, 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
The CBOE proposes to (i) reduce the
book execution fee in classes trading on
the ‘‘Hybrid 3.0 Platform’’, and (ii)
amend its Order Routing System
(‘‘ORS’’) order cancellation fee. The text
of the proposed rule change is available
at CBOE, 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, the
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 these statements
may be examined at the places specified
in Item IV below. The 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
ebenthall on PROD1PC69 with NOTICES
1. Purpose
The Exchange proposes to implement
the following fee changes on November
1, 2007.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
2 17
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Jkt 214001
Hybrid 3.0 Book Execution Fee
On June 7, 2007, the Commission
approved the Exchange’s ‘‘Hybrid 3.0’’
trading platform.5 The remaining nonHybrid classes trading on the Exchange
have moved to the Hybrid 3.0 platform.6
The new Hybrid 3.0 classes no longer
utilize the services of an Exchange
Order Book Official (‘‘OBO’’) 7. Pursuant
to Section 7 of the CBOE Fees Schedule,
the Exchange assessed per contract fees
on orders in non-Hybrid index option
classes resting in the electronic book
that were executed on the floor by the
OBO (‘‘OBO Execution Fees’’). These
OBO Execution Fees are $.25 per
contract excluding market orders and
certain limit orders entered prior to the
opening rotation, and $.10 per contract
for accommodation liquidations (cabinet
trades).8
The Exchange proposes to reduce the
$.25 per contract fee to $.18 per
contract, rename the fee ‘‘Hybrid 3.0
Book Execution Fee’’, and eliminate the
$.10 per contract fee for accommodation
liquidations. The fee would apply to
book executions in Hybrid 3.0 classes
(currently, OEX, SPX and MVR).
Specifically, orders in Hybrid 3.0
classes resting in the electronic book
that are executed would be assessed a
fee of $.18 per contract. This fee would
not apply to orders in SPX options
resting in the SPX electronic book that
are executed during opening rotation on
the final settlement date of CBOE
Volatility Index (‘‘VIX’’) options and
futures, as orders entered to participate
in such opening rotation help to
facilitate the calculation of a settlement
price for VIX options and futures.9
The Hybrid 3.0 book execution system
has helped to improve execution time as
well as service and efficiency. The
Hybrid 3.0 Book Execution Fee is
designed to help the Exchange recover
its costs of developing the system and
5 See Securities Exchange Act Release No. 55874
(June 7, 2007), 72 FR 32688 (June 13, 2007).
6 The classes that trade on the Hybrid 3.0
platform are options on the S&P 100 Index (‘‘OEX’’),
options on the S&P 500 Index (‘‘SPX’’) and options
on the Morgan Stanley Retail Index (‘‘MVR’’).
7 An ‘‘Order Book Official’’ is defined in CBOE
Rule 7.1 as an Exchange employee designated
pursuant to CBOE Rule 7.3 who is responsible for
(i) maintaining the book with respect to the classes
of options assigned to him; (ii) effecting proper
executions of orders placed with him; (iii)
displaying bids and offers pursuant to CBOE Rule
7.7 of these Rules; and (iv) monitoring the market
for the classes of options assigned to him.
8 An ‘‘accommodation’’ or ‘‘cabinet’’ trade refers
to trades in listed options on the Exchange that are
worthless or not actively traded. Cabinet trading is
conducted in accordance with CBOE Rule 6.54.
9 The opening rotation procedures in options
series used to calculate the final settlement price of
volatility indexes are described in CBOE Rule
6.2B.01.
PO 00000
Frm 00122
Fmt 4703
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offset the cost of maintaining and
enhancing the system in the future.
ORS Order Cancellation Fee
CBOE currently assesses an executing
clearing member $1.50 for each
cancelled public customer ORS order in
excess of the number of public customer
orders that the executing clearing
member executes in a month for itself or
for a correspondent firm. The purpose of
the fee is to ease order backlogs on ORS
and related systems. The fee is not
charged if less than 500 public customer
orders are cancelled in a month by the
executing clearing member for itself or
for a correspondent firm. The Exchange
aggregates and counts as one executed
order for purposes of the fee all public
customer options orders from the same
executing clearing member for itself or
for a correspondent firm that are
executed in the same series on the same
side of the market at the same price
within a 30 second period. The
following ORS order activity is exempt
from the fee: (i) Cancelled ORS orders
that improve the Exchange’s prevailing
bid-offer (BBO) market when received;
and (ii) fill and cancellation activity
occurring within the first one minute of
trading following the opening of each
option class.
The Exchange proposes to amend the
fee by additionally exempting the
following activity: (i) Complex order 10
fills and cancels; (ii) unfilled Fill-or-Kill
(‘‘FOK’’) orders 11, and (iii) unfilled
Immediate-or-Cancel (‘‘IOC’’) orders. 12
Because this activity does not contribute
excessively to system congestion the
Exchange believes it is appropriate to
exclude this activity from the
calculation of the fee.
Additionally, the Exchange proposes
to exempt from the fee fill and
cancellation activity in Mini-SPX Index
Options (XSP). CBOE intends to
undertake a marketing re-launch of the
XSP product due in part to the inclusion
of XSP options in the expanded penny
pilot program recently approved by the
Commission.13 In conjunction with the
marketing re-launch, CBOE has
10 ‘‘Complex Order’’ is defined in CBOE Rule
6.53C(a).
11 ‘‘Fill-or-Kill’’ order is defined in CBOE Rule
6.53(j) as an order which is to be executed in its
entirety as soon as it is represented in the trading
crowd, and such order, if not so executed, is to be
treated as cancelled.
12 ‘‘Immediate-or-Cancel’’ order is defined in
CBOE Rule 6.53(k) as a market or limit order which
is to be executed in whole or in part as soon as such
order is represented in the trading crowd. Any
portion not so executed is to be treated as cancelled.
13 See Securities and Exchange Act Release No.
56565 (September 27, 2007), 72 FR 56403 (October
3, 2007).
E:\FR\FM\17DEN1.SGM
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Federal Register / Vol. 72, No. 241 / Monday, December 17, 2007 / Notices
determined to exclude activity in XSP
options from the calculation of the fee.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the
Act 14, in general, and furthers the
objectives of Section 6(b)(4) 15 of the Act
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.
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 that is not
necessary or appropriate in furtherance
of 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
Because the foregoing proposed rule
change establishes or changes a due, fee,
or other charge imposed by the
Exchange, it has become effective
pursuant to Section 19(b)(3)(A) of the
Act 16 and Rule 19b–4(f)(2) 17
thereunder. 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.18
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:
ebenthall on PROD1PC69 with NOTICES
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–2007–127 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–2007–127. 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–2007–127 and
should be submitted on or before
January 7, 2008.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.19
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–24310 Filed 12–14–07; 8:45 am]
BILLING CODE 8011–01–P
14 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4).
U.S.C. 78s(b)(3)(A).
17 17 CFR 19b–4(f)(2).
18 For purposes of calculating the 60-day
abrogation period, the Commission considers the
abrogation period to have commenced on November
30, 2007.
15 15
16 15
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PO 00000
CFR 200.30–3(a)(12).
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71467
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56936; File No. SR–FINRA–
2007–022]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Order Granting Accelerated Approval
of Proposed Rule Change Relating to
FINRA’s NYSE Rule 342.13 and the
General Securities Principal
Examination
December 10, 2007.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (‘‘Act’’)
and Rule 19b–4 thereunder,2 notice is
hereby given that on November 9, 2007,
the Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) (f/k/a
National Association of Securities
Dealers, Inc. (‘‘NASD’’)) 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 FINRA. This
order provides notice of the proposed
rule change and approves the proposed
rule change on an accelerated basis.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FINRA is proposing to amend
FINRA’s New York Stock Exchange LLC
(‘‘NYSE’’) Rule 342.13 (Acceptability of
Supervisors) 3 to eliminate the
requirement that the General Securities
Principal Examination (‘‘Series 24
Examination’’) be passed after July 1,
2001 in order to be recognized by NYSE
as an acceptable alternative to the
General Securities Sales Supervisor
Qualification Examination (‘‘Series 9/10
Examination’’) for persons whose duties
do not include supervision of options or
municipal securities sales activities. The
proposed rule change is identical to a
rule change by the NYSE to its version
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 FINRA has incorporated certain NYSE rules into
its rulebook, including NYSE Rule 342. This
incorporated NYSE rule applies solely to those
members of FINRA that also are members of NYSE
on or after July 30, 2007 (‘‘Dual Members’’), and
until the time FINRA adopts a consolidated
rulebook applicable to all of its members. The
incorporated NYSE rules apply to the same
categories of persons to which they applied as of
July 30, 2007. In applying the incorporated NYSE
rules to Dual Members, FINRA also has
incorporated the related interpretive positions set
forth in the NYSE Rule Interpretations Handbook
and NYSE Information Memos.
2 17
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]]>Agencies
[Federal Register Volume 72, Number 241 (Monday, December 17, 2007)]
[Notices]
[Pages 71465-71467]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-24310]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56937; File No. SR-CBOE-2007-127]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change and Amendment No. 1 Thereto Relating to Cancellation Fees
December 10, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 71466]]
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 1, 2007, the Chicago Board Options Exchange, Incorporated
(the ``CBOE'' or the ``Exchange'') 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 CBOE. On November 30, 2007, CBOE filed Amendment No. 1
to the proposed rule change. The CBOE has filed the proposed rule
change as one establishing or changing a due, fee, or other charge
imposed by the Exchange under Section 19(b)(3)(A)(ii) of the Act \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, as amended, 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
The CBOE proposes to (i) reduce the book execution fee in classes
trading on the ``Hybrid 3.0 Platform'', and (ii) amend its Order
Routing System (``ORS'') order cancellation fee. The text of the
proposed rule change is available at CBOE, 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, the 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 these statements may be examined at the places specified in
Item IV below. The 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 Exchange proposes to implement the following fee changes on
November 1, 2007.
Hybrid 3.0 Book Execution Fee
On June 7, 2007, the Commission approved the Exchange's ``Hybrid
3.0'' trading platform.\5\ The remaining non-Hybrid classes trading on
the Exchange have moved to the Hybrid 3.0 platform.\6\ The new Hybrid
3.0 classes no longer utilize the services of an Exchange Order Book
Official (``OBO'') \7\. Pursuant to Section 7 of the CBOE Fees
Schedule, the Exchange assessed per contract fees on orders in non-
Hybrid index option classes resting in the electronic book that were
executed on the floor by the OBO (``OBO Execution Fees''). These OBO
Execution Fees are $.25 per contract excluding market orders and
certain limit orders entered prior to the opening rotation, and $.10
per contract for accommodation liquidations (cabinet trades).\8\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 55874 (June 7,
2007), 72 FR 32688 (June 13, 2007).
\6\ The classes that trade on the Hybrid 3.0 platform are
options on the S&P 100 Index (``OEX''), options on the S&P 500 Index
(``SPX'') and options on the Morgan Stanley Retail Index (``MVR'').
\7\ An ``Order Book Official'' is defined in CBOE Rule 7.1 as an
Exchange employee designated pursuant to CBOE Rule 7.3 who is
responsible for (i) maintaining the book with respect to the classes
of options assigned to him; (ii) effecting proper executions of
orders placed with him; (iii) displaying bids and offers pursuant to
CBOE Rule 7.7 of these Rules; and (iv) monitoring the market for the
classes of options assigned to him.
\8\ An ``accommodation'' or ``cabinet'' trade refers to trades
in listed options on the Exchange that are worthless or not actively
traded. Cabinet trading is conducted in accordance with CBOE Rule
6.54.
---------------------------------------------------------------------------
The Exchange proposes to reduce the $.25 per contract fee to $.18
per contract, rename the fee ``Hybrid 3.0 Book Execution Fee'', and
eliminate the $.10 per contract fee for accommodation liquidations. The
fee would apply to book executions in Hybrid 3.0 classes (currently,
OEX, SPX and MVR). Specifically, orders in Hybrid 3.0 classes resting
in the electronic book that are executed would be assessed a fee of
$.18 per contract. This fee would not apply to orders in SPX options
resting in the SPX electronic book that are executed during opening
rotation on the final settlement date of CBOE Volatility Index
(``VIX'') options and futures, as orders entered to participate in such
opening rotation help to facilitate the calculation of a settlement
price for VIX options and futures.\9\
---------------------------------------------------------------------------
\9\ The opening rotation procedures in options series used to
calculate the final settlement price of volatility indexes are
described in CBOE Rule 6.2B.01.
---------------------------------------------------------------------------
The Hybrid 3.0 book execution system has helped to improve
execution time as well as service and efficiency. The Hybrid 3.0 Book
Execution Fee is designed to help the Exchange recover its costs of
developing the system and offset the cost of maintaining and enhancing
the system in the future.
ORS Order Cancellation Fee
CBOE currently assesses an executing clearing member $1.50 for each
cancelled public customer ORS order in excess of the number of public
customer orders that the executing clearing member executes in a month
for itself or for a correspondent firm. The purpose of the fee is to
ease order backlogs on ORS and related systems. The fee is not charged
if less than 500 public customer orders are cancelled in a month by the
executing clearing member for itself or for a correspondent firm. The
Exchange aggregates and counts as one executed order for purposes of
the fee all public customer options orders from the same executing
clearing member for itself or for a correspondent firm that are
executed in the same series on the same side of the market at the same
price within a 30 second period. The following ORS order activity is
exempt from the fee: (i) Cancelled ORS orders that improve the
Exchange's prevailing bid-offer (BBO) market when received; and (ii)
fill and cancellation activity occurring within the first one minute of
trading following the opening of each option class.
The Exchange proposes to amend the fee by additionally exempting
the following activity: (i) Complex order \10\ fills and cancels; (ii)
unfilled Fill-or-Kill (``FOK'') orders \11\, and (iii) unfilled
Immediate-or-Cancel (``IOC'') orders. \12\ Because this activity does
not contribute excessively to system congestion the Exchange believes
it is appropriate to exclude this activity from the calculation of the
fee.
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\10\ ``Complex Order'' is defined in CBOE Rule 6.53C(a).
\11\ ``Fill-or-Kill'' order is defined in CBOE Rule 6.53(j) as
an order which is to be executed in its entirety as soon as it is
represented in the trading crowd, and such order, if not so
executed, is to be treated as cancelled.
\12\ ``Immediate-or-Cancel'' order is defined in CBOE Rule
6.53(k) as a market or limit order which is to be executed in whole
or in part as soon as such order is represented in the trading
crowd. Any portion not so executed is to be treated as cancelled.
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Additionally, the Exchange proposes to exempt from the fee fill and
cancellation activity in Mini-SPX Index Options (XSP). CBOE intends to
undertake a marketing re-launch of the XSP product due in part to the
inclusion of XSP options in the expanded penny pilot program recently
approved by the Commission.\13\ In conjunction with the marketing re-
launch, CBOE has
[[Page 71467]]
determined to exclude activity in XSP options from the calculation of
the fee.
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\13\ See Securities and Exchange Act Release No. 56565
(September 27, 2007), 72 FR 56403 (October 3, 2007).
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the Act
\14\, in general, and furthers the objectives of Section 6(b)(4) \15\
of the Act 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.
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\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(4).
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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 that is not necessary or appropriate in
furtherance of 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
Because the foregoing proposed rule change establishes or changes a
due, fee, or other charge imposed by the Exchange, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \16\ and Rule 19b-
4(f)(2) \17\ thereunder. 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.\18\
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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 19b-4(f)(2).
\18\ For purposes of calculating the 60-day abrogation period,
the Commission considers the abrogation period to have commenced on
November 30, 2007.
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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-2007-127 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-2007-127. 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-2007-127 and should be
submitted on or before January 7, 2008.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-24310 Filed 12-14-07; 8:45 am]
BILLING CODE 8011-01-P
