Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change as Modified by Amendments No. 1, 2, and 3 Relating to a Hybrid Agency Liaison (“HAL”) Step-Up Rebate and Pass-Through of Certain Linkage Related Costs, 6752-6753 [E8-2059]
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<![CDATA[
6752
Federal Register / Vol. 73, No. 24 / Tuesday, February 5, 2008 / Notices
until such time as there is no longer any
open interest in physical delivery FCOs
traded on the Phlx that are subject to the
separate FCO service access fee. In
addition, the Commission believes that
OPRA’s proposal to amend various
provisions of the OPRA Plan and the
OPRA Fee Schedule to eliminate the
separate fees for access to market data
concerning FCOs that currently apply to
certain FCOs traded on the Phlx is
appropriate in light of the Phlx’s
decision to cease listing new series of
physical delivery FCOs to replace
expiring series. Accordingly, the
Commission believes that it is necessary
or appropriate in the public interest, for
the protection of investors or the
maintenance of fair and orderly markets,
to remove impediments to, and perfect
mechanism of, a national market system
to approve the proposed amendment to
the OPRA Plan on a permanent basis.
IV. Conclusion
It is therefore ordered, pursuant to
Section 11A of the Act,15 and Rule 608
thereunder,16 that the proposed OPRA
Plan amendment (SR–OPRA–2007–03),
as modified by Amendment No. 1
thereto, be, and it hereby is, approved
on a permanent basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–1998 Filed 2–4–08; 8:45 am]
BILLING CODE 8011–01–P
‘‘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 CBOE. On
January 16, 2008, CBOE filed
Amendment No. 1 to the proposed rule
change. On January 23, 2008, CBOE
filed Amendment No. 2 to the proposed
rule change, and on January 28, CBOE
filed Amendment No. 3 to the proposed
rule change.3 CBOE has designated this
proposal as one establishing or changing
a due, fee, or other charge applicable
only to a member under section
19(b)(3)(A)(ii) of the Act,4 and Rule
19b–4(f)(2) thereunder,5 which renders
the proposal 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
CBOE proposes to: (i) Establish a HAL
step-up rebate, and (ii) pass through to
members certain costs related to
Intermarket Option Linkage (‘‘Linkage’’)
Principal orders. The text of the rule
proposal 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
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57231; File No. SR–CBOE–
2007–152]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change as Modified by
Amendments No. 1, 2, and 3 Relating
to a Hybrid Agency Liaison (‘‘HAL’’)
Step-Up Rebate and Pass-Through of
Certain Linkage Related Costs
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 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.
rmajette on PROD1PC64 with NOTICES
January 30, 2008.
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 December
21, 2007, the Chicago Board Options
Exchange, Incorporated (‘‘CBOE’’ or
15 15
U.S.C. 78k–1.
CFR 242.608.
17 17 CFR 200.30–3(a)(29).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
16 17
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15:34 Feb 04, 2008
Jkt 214001
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
HAL Step-Up Rebate
HAL is a system for automated
handling of electronically received
orders that are not automatically
executed upon receipt by the Hybrid
Trading System (‘‘Hybrid’’). CBOE Rule
6.14 governs the operation of the HAL
system.
Orders received by the HAL system
are electronically exposed to all CBOE
market-makers appointed to the relevant
option class, as well as to all members
acting as agent for orders at the top of
the Exchange’s book in the relevant
option series. This exposure and a
subsequent allocation period (together,
the ‘‘HAL auction’’) afford crowd
members an opportunity to match the
away national best bid or offer
(‘‘NBBO’’) price. If any portion of an
exposed order remains unexecuted at
the end of a HAL auction, then the
remaining order would be booked if it
is a limit order that is not marketable,
or, if marketable, routed to the exchange
showing the NBBO via Linkage.
In order to provide an incentive to
market makers to execute orders at
CBOE, versus routing orders away via
Linkage, the Exchange proposes to
establish a program whereby the
Exchange would provide a rebate to
market-makers that ‘‘step-up’’ and trade
all or part of certain orders on the HAL
system. Specifically, the Exchange will
rebate to a market-maker $.20 per
contract against transaction fees
generated from a transaction on the HAL
system in a penny pilot class, provided
that at least 80% of the market-maker’s
quotes in that class (excluding quotes in
LEAPS series) in that same month were
on one side of the NBBO. Marketmakers not meeting this 80% criteria
would not be eligible to receive a rebate.
The Exchange believes the HAL rebate
will allow market-makers to compete
better for order flow in the penny pilot
classes.
Pass-Through of Linkage P Order Costs
3 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 January 28, 2008, the
date on which the Exchange filed Amendment No.
3. See 15 U.S.C. 78s(b)(3)(C).
4 15 U.S.C. 78s(b)(3)(A)(ii).
5 17 CFR 240.19b–4(f)(2).
PO 00000
Frm 00063
Fmt 4703
Sfmt 4703
Pursuant to Section 21 of the CBOE
Fees Schedule, the Exchange provides
certain rebates and credits to Designated
Primary Market-Makers (‘‘DPMs’’) for
fees they incur related to the execution
of outbound Principal orders (‘‘P
orders’’) on behalf of orders that are for
the account of a broker-dealer (i.e., ‘‘B’’
and ‘‘F’’ origin codes).
The Exchange proposes to amend this
program in two respects. First, the
E:\FR\FM\05FEN1.SGM
05FEN1
Federal Register / Vol. 73, No. 24 / Tuesday, February 5, 2008 / Notices
Exchange proposes to expand the
program to apply to any non-customer
order underlying a P order.6 Second, in
order to recover the significant costs of
this program, the Exchange proposes to
pass through to the member that
originated the underlying order the total
amount of the credits paid by the
Exchange to the DPM under the program
(i.e., away exchange transaction fee, and
OCC, clearing firm and Sales Value
fees). The Exchange represents that
members seeking to send orders to the
Exchange that are not routed away
through the Linkage (thereby avoiding
any pass-through Linkage charges) may
do so by marking orders sent to CBOE
with an Immediate or Cancel (‘‘IOC’’)
designation. IOC orders are not routed
to other market centers, instead if they
cannot be executed on CBOE they are
cancelled.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with section
6(b) of the Act 7 in general and furthers
the objectives of section 6(b)(4) 8 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 result in 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
The Exchange neither solicited nor
received comments on the proposal.
rmajette on PROD1PC64 with NOTICES
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 9 and Rule 19b–4(f)(2) 10
thereunder because it establishes or
changes a due, fee, or other charge
applicable only to a member. At any
time within 60 days of the filing of such
proposed rule change, the Commission
may summarily abrogate such rule
6 The Exchange is expanding the application of
the P order program due to the fact that HAL now
processes market-maker orders in addition to
broker-dealer orders.
7 15 U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(4).
9 15 U.S.C. 78s(b)(3)(A).
10 17 CFR 240.19b–(f)(2).
VerDate Aug<31>2005
15:34 Feb 04, 2008
Jkt 214001
6753
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.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–2059 Filed 2–4–08; 8:45 am]
IV. Solicitation of Comments
BILLING CODE 8011–01–P
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–2007–152 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57229; File No. SR–ISE–
2008–09]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing of Proposed Rule
Change To Amend Exchange Rules
Related to the Imposition of Fines for
Minor Rule Violations
January 29, 2008.
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 January
Paper Comments
18, 2008, the International Securities
• Send paper comments in triplicate
Exchange, LLC (‘‘ISE’’ or ‘‘Exchange’’)
to Nancy M. Morris, Secretary,
filed with the Securities and Exchange
Securities and Exchange Commission,
Commission (‘‘Commission’’) the
100 F Street, NE., Washington, DC
proposed rule change as described in
20549–1090.
Items I, II, and III below, which Items
have been prepared substantially by the
All submissions should refer to File
ISE. The Commission is publishing this
Number SR–CBOE–2007–152. This file
notice to solicit comments on the
number should be included on the
subject line if e-mail is used. To help the proposed rule change from interested
persons.
Commission process and review your
comments more efficiently, please use
I. Self-Regulatory Organization’s
only one method. The Commission will Statement of the Terms of Substance of
post all comments on the Commission’s the Proposed Rule Change
Internet Web site (https://www.sec.gov/
The Exchange proposes to amend ISE
rules/sro.shtml). Copies of the
Rule 1614, ‘‘Imposition of Fines for
submission, all subsequent
Minor Rule Violations,’’ to add
amendments, all written statements
summary fines for violations of ISE Rule
with respect to the proposed rule
1100, ‘‘Exercise of Options Contracts.’’
change that are filed with the
The text of the proposed rule change is
Commission, and all written
available on the Exchange’s Web site
communications relating to the
(https://www.ise.com), at the ISE’s
proposed rule change between the
Commission and any person, other than principal office, and at the
Commission’s Public Reference Room.
those that may be withheld from the
public in accordance with the
II. Self-Regulatory Organization’s
provisions of 5 U.S.C. 552, will be
Statement of the Purpose of, and
available for inspection and copying in
Statutory Basis for, the Proposed Rule
the Commission’s Public Reference
Change
Room. Copies of such filing also will be
In its filing with the Commission, the
available for inspection and copying at
Exchange included statements
the principal office of CBOE.
concerning the purpose of, and basis for,
All comments received will be posted
the proposed rule change and discussed
without change; the Commission does
any comments it received on the
not edit personal identifying
proposed rule change. The text of these
information from submissions. You
statements may be examined at the
should submit only information that
places specified in Item IV below. The
you wish to make available publicly. All
Exchange has prepared summaries, set
submissions should refer to File
Number SR–CBOE–2007–152 and
11 17 CFR 200.30–3(a)(12).
should be submitted on or before
1 15 U.S.C. 78s(b)(1).
February 26, 2008.
2 17 CFR 240.19b–4.
PO 00000
Frm 00064
Fmt 4703
Sfmt 4703
E:\FR\FM\05FEN1.SGM
05FEN1
]]>Agencies
[Federal Register Volume 73, Number 24 (Tuesday, February 5, 2008)]
[Notices]
[Pages 6752-6753]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-2059]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57231; File No. SR-CBOE-2007-152]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change as Modified by Amendments No. 1, 2, and 3 Relating to a
Hybrid Agency Liaison (``HAL'') Step-Up Rebate and Pass-Through of
Certain Linkage Related Costs
January 30, 2008.
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 December 21, 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 CBOE. On January 16, 2008, CBOE filed Amendment No. 1 to
the proposed rule change. On January 23, 2008, CBOE filed Amendment No.
2 to the proposed rule change, and on January 28, CBOE filed Amendment
No. 3 to the proposed rule change.\3\ CBOE has designated this proposal
as one establishing or changing a due, fee, or other charge applicable
only to a member under section 19(b)(3)(A)(ii) of the Act,\4\ and Rule
19b-4(f)(2) thereunder,\5\ which renders the proposal 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\ 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 January 28, 2008, the date on which the Exchange
filed Amendment No. 3. See 15 U.S.C. 78s(b)(3)(C).
\4\ 15 U.S.C. 78s(b)(3)(A)(ii).
\5\ 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: (i) Establish a HAL step-up rebate, and (ii) pass
through to members certain costs related to Intermarket Option Linkage
(``Linkage'') Principal orders. The text of the rule proposal 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 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
HAL Step-Up Rebate
HAL is a system for automated handling of electronically received
orders that are not automatically executed upon receipt by the Hybrid
Trading System (``Hybrid''). CBOE Rule 6.14 governs the operation of
the HAL system.
Orders received by the HAL system are electronically exposed to all
CBOE market-makers appointed to the relevant option class, as well as
to all members acting as agent for orders at the top of the Exchange's
book in the relevant option series. This exposure and a subsequent
allocation period (together, the ``HAL auction'') afford crowd members
an opportunity to match the away national best bid or offer (``NBBO'')
price. If any portion of an exposed order remains unexecuted at the end
of a HAL auction, then the remaining order would be booked if it is a
limit order that is not marketable, or, if marketable, routed to the
exchange showing the NBBO via Linkage.
In order to provide an incentive to market makers to execute orders
at CBOE, versus routing orders away via Linkage, the Exchange proposes
to establish a program whereby the Exchange would provide a rebate to
market-makers that ``step-up'' and trade all or part of certain orders
on the HAL system. Specifically, the Exchange will rebate to a market-
maker $.20 per contract against transaction fees generated from a
transaction on the HAL system in a penny pilot class, provided that at
least 80% of the market-maker's quotes in that class (excluding quotes
in LEAPS series) in that same month were on one side of the NBBO.
Market-makers not meeting this 80% criteria would not be eligible to
receive a rebate. The Exchange believes the HAL rebate will allow
market-makers to compete better for order flow in the penny pilot
classes.
Pass-Through of Linkage P Order Costs
Pursuant to Section 21 of the CBOE Fees Schedule, the Exchange
provides certain rebates and credits to Designated Primary Market-
Makers (``DPMs'') for fees they incur related to the execution of
outbound Principal orders (``P orders'') on behalf of orders that are
for the account of a broker-dealer (i.e., ``B'' and ``F'' origin
codes).
The Exchange proposes to amend this program in two respects. First,
the
[[Page 6753]]
Exchange proposes to expand the program to apply to any non-customer
order underlying a P order.\6\ Second, in order to recover the
significant costs of this program, the Exchange proposes to pass
through to the member that originated the underlying order the total
amount of the credits paid by the Exchange to the DPM under the program
(i.e., away exchange transaction fee, and OCC, clearing firm and Sales
Value fees). The Exchange represents that members seeking to send
orders to the Exchange that are not routed away through the Linkage
(thereby avoiding any pass-through Linkage charges) may do so by
marking orders sent to CBOE with an Immediate or Cancel (``IOC'')
designation. IOC orders are not routed to other market centers, instead
if they cannot be executed on CBOE they are cancelled.
---------------------------------------------------------------------------
\6\ The Exchange is expanding the application of the P order
program due to the fact that HAL now processes market-maker orders
in addition to broker-dealer orders.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
section 6(b) of the Act \7\ in general and furthers the objectives of
section 6(b)(4) \8\ 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.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
CBOE does not believe that the proposed rule change will result in
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
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 \9\ and Rule 19b-4(f)(2) \10\ thereunder because
it establishes or changes a due, fee, or other charge applicable only
to a member. At any time within 60 days of the filing of such proposed
rule change, the Commission may summarily abrogate such rule change if
it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-(f)(2).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-CBOE-2007-152 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-2007-152. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal office of CBOE.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-CBOE-2007-152
and should be submitted on or before February 26, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-2059 Filed 2-4-08; 8:45 am]
BILLING CODE 8011-01-P
