Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Fee Changes, 10845-10846 [E8-3734]

Download as PDF Federal Register / Vol. 73, No. 40 / Thursday, February 28, 2008 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57374; File No. SR–CBOE– 2008–13] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Fee Changes February 22, 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 February 1, 2008, the Chicago Board Options Exchange, Incorporated (‘‘Exchange’’ or ‘‘CBOE’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the CBOE. The CBOE has designated this proposal as one establishing or changing a due, fee, or other charge imposed by the CBOE 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 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 extend its Hybrid 3.0 book execution fee to orders that are executed by the Hybrid Agency Liaison (‘‘HAL’’) system. The text of the proposed rule change is available on the Exchange’s Web site (https:// www.cboe.org/legal), at the principal office of the Exchange, and at the Commission’s Public Reference Room. rwilkins on PROD1PC63 with NOTICES 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. 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 VerDate Aug<31>2005 18:23 Feb 27, 2008 Jkt 214001 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 add another class of orders to which the Hybrid 3.0 book execution fee of $.18 per contract applies. On November 1, 2007, the Exchange implemented a fee of $.18 per contract applicable to orders in Hybrid 3.0 classes resting in the electronic book that are executed. 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’’). The fee does 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. In January 2008, CBOE introduced the HAL system in Hybrid 3.0 classes. HAL is a system for automated handling of electronically received orders that are not automatically executed upon receipt by the Hybrid Trading System. CBOE Rule 6.14 governs the operation of the HAL system. Orders received by the HAL system are electronically exposed (flashed) 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. In Hybrid 3.0 classes, this exposure and a subsequent allocation period afford crowd members an opportunity to trade against limit orders that improve the Exchange’s disseminated quotation. If any portion of an exposed order remains unexecuted at the end of a HAL process, the remaining order is displayed. The Exchange is proposing to extend the Hybrid 3.0 book execution fee to orders in Hybrid 3.0 classes that are executed by the HAL system. Specifically, an order that is exposed (flashed) by HAL and subsequently executed by the HAL system would be charged $.18 per contract. This is the same as if the order had been booked and then traded. The Hybrid 3.0 HAL system and book execution system have helped to improve execution time as well as service and efficiency. The fee is designed to help the Exchange recover its costs of developing these systems and offset the cost of maintaining and enhancing these systems in the future. PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 10845 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,5 in general, and furthers the objectives of Section 6(b)(4),6 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 CBOE facilities. B. Self-Regulatory Organization’s Statement on Burden on Competition The proposed rule change does not 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 The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing 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 7 and Rule 19b–4(f)(2) 8 thereunder. 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. 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 5 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 7 15 U.S.C. 78s(b)(3)(A). 8 17 CFR 19b–4(f)(2). 6 15 E:\FR\FM\28FEN1.SGM 28FEN1 10846 Federal Register / Vol. 73, No. 40 / Thursday, February 28, 2008 / Notices No. SR–CBOE–2008–13 on the subject line. SECURITIES AND EXCHANGE COMMISSION Paper Comments [Release No. 34–57363; File No.–CHX–2007– 21] • 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–2008–13. 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 the 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–2008–13 and should be submitted on or before March 20, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–3734 Filed 2–27–08; 8:45 am] rwilkins on PROD1PC63 with NOTICES BILLING CODE 8011–01–P Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, To Amend Rules Relating to Registration Requirements February 20, 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 October 9, 2007, the Chicago Stock Exchange, Inc. (‘‘CHX’’ 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 CHX. On February 14, 2008, CHX filed Amendment No. 1 to the proposed rule change.3 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 the Substance of the Proposed Rule Change CHX proposes to amend its registration requirements to require CHX participants to use the Financial Industry Regulatory Authority, Inc.’s (‘‘FINRA’’) Web Central Registration Depository (‘‘Web CRD’’) to register associated persons who are required to register with the Exchange under CHX rules. The Exchange would also amend its Fees Schedule (the ‘‘Fee Schedule’’) to include fees that would be charged in connection with the use of Web CRD. The text of this proposed rule change is available at CHX, on the Exchange’s Web site at https://www.chx.com, and in 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, CHX 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. CHX has prepared 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Amendment No. 1 replaced and superseded the original filing in its entirety. 2 17 9 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 18:23 Feb 27, 2008 Jkt 214001 PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 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 FINRA’s Web CRD system is a centralized, web-based system used by securities exchanges and broker-dealers across the country to track registration and qualification information about firms and the individuals who work for those firms. The Exchange has entered into an agreement with FINRA to allow the Exchange’s participants to use Web CRD to register certain of their associated persons. Through this proposal, the Exchange seeks to amend its registration rules and Fee Schedule: (a) To require Exchange participants to use Web CRD to register associated persons who are required to register with the Exchange under CHX rules; (b) to allow CHX to determine whether participants should submit fingerprints to CHX or to FINRA for processing during the registration process; and (c) to adopt new fees to cover charges assessed by FINRA for its work in processing fingerprints or the materials submitted through the Web CRD system. CHX would also delete a provision that requires firms to notify CHX of the termination of any non-registered, associated person’s employment.4 The first part of this proposal would require CHX participants to use the Web CRD system to register certain of their associated persons.5 Today, CHX participants that are not members of FINRA do not have access to the Web CRD system for registering their associated persons. Instead of using this on-line tool, those participants must handle their registration and continuing education processes manually, by filing paperwork with CHX. CHX staff must process and store this paperwork in hard copy form. To alleviate the need for manual processing and to ensure that other regulatory benefits are 4 See Article 6, Rule 2, Interpretations and Policies .03. CHX believes that this requirement has become somewhat obsolete with CHX’s move to its new trading model (and the elimination of its physical trading floor), because the requirement had, in effect, been largely focused on the employment status of clerks working on the Exchange’s trading floor. Because the Exchange no longer has a physical trading floor, it is no longer as important to learn of the termination of a clerk’s employment with a participant firm. Moreover, CHX regularly receives an updated list of a firm’s associated persons when it conducts its annual examinations. 5 See Proposed Article 6, Rule 2, Interpretations and Policies .01. E:\FR\FM\28FEN1.SGM 28FEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 73, Number 40 (Thursday, February 28, 2008)]
[Notices]
[Pages 10845-10846]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-3734]



[[Page 10845]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57374; File No. SR-CBOE-2008-13]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to Fee Changes

February 22, 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 February 1, 2008, the Chicago Board Options Exchange, Incorporated 
(``Exchange'' or ``CBOE'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been substantially 
prepared by the CBOE. The CBOE has designated this proposal as one 
establishing or changing a due, fee, or other charge imposed by the 
CBOE 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 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 extend its Hybrid 3.0 book execution fee to 
orders that are executed by the Hybrid Agency Liaison (``HAL'') system. 
The text of the proposed rule change is available on the Exchange's Web 
site (https://www.cboe.org/legal), at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the 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 purpose of this proposed rule change is to add another class of 
orders to which the Hybrid 3.0 book execution fee of $.18 per contract 
applies. On November 1, 2007, the Exchange implemented a fee of $.18 
per contract applicable to orders in Hybrid 3.0 classes resting in the 
electronic book that are executed. 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''). The fee does 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.
    In January 2008, CBOE introduced the HAL system in Hybrid 3.0 
classes. HAL is a system for automated handling of electronically 
received orders that are not automatically executed upon receipt by the 
Hybrid Trading System. CBOE Rule 6.14 governs the operation of the HAL 
system.
    Orders received by the HAL system are electronically exposed 
(flashed) 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. In Hybrid 3.0 
classes, this exposure and a subsequent allocation period afford crowd 
members an opportunity to trade against limit orders that improve the 
Exchange's disseminated quotation. If any portion of an exposed order 
remains unexecuted at the end of a HAL process, the remaining order is 
displayed.
    The Exchange is proposing to extend the Hybrid 3.0 book execution 
fee to orders in Hybrid 3.0 classes that are executed by the HAL 
system. Specifically, an order that is exposed (flashed) by HAL and 
subsequently executed by the HAL system would be charged $.18 per 
contract. This is the same as if the order had been booked and then 
traded.
    The Hybrid 3.0 HAL system and book execution system have helped to 
improve execution time as well as service and efficiency. The fee is 
designed to help the Exchange recover its costs of developing these 
systems and offset the cost of maintaining and enhancing these systems 
in the future.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\5\ in general, and 
furthers the objectives of Section 6(b)(4),\6\ 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 
CBOE facilities.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change does not 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

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from members or other interested 
parties.

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

    Because the foregoing 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 \7\ and Rule 19b-4(f)(2) \8\ 
thereunder. 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.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 19b-4(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

[[Page 10846]]

No. SR-CBOE-2008-13 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-2008-13. 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 the 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-2008-13 and should be 
submitted on or before March 20, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-3734 Filed 2-27-08; 8:45 am]
BILLING CODE 8011-01-P

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