Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Hybrid Agency Liaison Step-Up Rebate Program, 14514-14515 [E8-5353]

Download as PDF 14514 Federal Register / Vol. 73, No. 53 / Tuesday, March 18, 2008 / Notices SECURITIES AND EXCHANGE COMMISSION and C below, of the most significant aspects of such statements. [Release No. 34–57470; File No. SR–CBOE– 2008–23] A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Hybrid Agency Liaison Step-Up Rebate Program March 11, 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 29, 2008, 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. 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,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 CBOE proposes to amend the Hybrid Agency Liaison (‘‘HAL’’) step-up rebate program. The text of the proposed rule change is available on the Exchange’s Web site (http://www.cboe.org/legal), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. mstockstill on PROD1PC66 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, 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, 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 17:39 Mar 17, 2008 Jkt 214001 1. Purpose In January 2008, in order to incent market makers to execute orders at CBOE versus routing orders away via the Intermarket Options Linkage (‘‘Linkage’’), the Exchange established a program whereby the Exchange provides a rebate to market-makers that ‘‘step-up’’ and trade all or part of certain orders on the HAL system.5 Specifically, the Exchange rebates 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 national best bid or offer (‘‘NBBO’’) price. Market-makers not meeting this 80% qualifying threshold are not eligible to receive a rebate. The HAL rebate program allows market-makers to compete better for order flow in the penny pilot classes. The Exchange proposes to amend the program in two respects effective March 1, 2008. First, the Exchange proposes to reduce the qualifying threshold from 80% of a market-maker’s quotes in a class to 60%. Second, the Exchange proposes to change the qualifying time period from the same month in which the rebate is given to the calendar month prior to the month in which the rebate is given. Thus, for example, if at least 60% of a market-maker’s quotes in a penny pilot class (excluding quotes in LEAPS series) in February 2008 were on one side of the NBBO, the market-maker would be eligible to receive the rebate for all of the market-maker’s HAL transactions in that class in March 2008. The proposed reduction in the qualifying threshold is intended to further incent market-makers to execute orders in penny pilot classes at CBOE instead of routing those orders away via the Linkage. The proposed change in the qualifying period is intended to make the program easier for members to administer because members will know going into a given month whether or not their HAL executions that month will qualify for the rebate. 5 See Securities Exchange Act Release No. 57231 (January 30, 2008), 73 FR 6752 (February 5, 2008). 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. PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Act 6 in general and furthers the objectives of Section 6(b)(4) 7 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. 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 The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 8 and subparagraph (f)(2) of Rule 19b–4 9 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 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. 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2008–23 on the subject line. 6 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 8 15 U.S.C. 78s(b)(3)(A). 9 17 CFR 240.19b–4(f)(2). 7 15 E:\FR\FM\18MRN1.SGM 18MRN1 Federal Register / Vol. 73, No. 53 / Tuesday, March 18, 2008 / Notices Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57472; File No. SR–CBOE– 2008–24] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and All submissions should refer to File Immediate Effectiveness of Proposed Number SR–CBOE–2008–23. This file Rule Change, as Modified by number should be included on the subject line if e-mail is used. To help the Amendment No. 1 Thereto, Regarding the CBOE Stock Exchange Market Data Commission process and review your Infrastructure Fee comments more efficiently, please use only one method. The Commission will March 11, 2008. post all comments on the Commission’s Pursuant to Section 19(b)(1) of the Internet Web site (http://www.sec.gov/ Securities Exchange Act of 1934 rules/sro.shtml). Copies of the (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 submission, all subsequent notice is hereby given that on March 7, amendments, all written statements 2008, the Chicago Board Options Exchange, Incorporated (‘‘Exchange’’ or with respect to the proposed rule ‘‘CBOE’’) filed with the Securities and change that are filed with the Exchange Commission (‘‘Commission’’) Commission, and all written the proposed rule change as described communications relating to the in Items I, II, and III below, which Items proposed rule change between the Commission and any person, other than have been substantially prepared by the Exchange. On March 11, 2008, the those that may be withheld from the Exchange filed Amendment No. 1 to the public in accordance with the proposed rule change. The Exchange provisions of 5 U.S.C. 552, will be has designated this proposal as one available for inspection and copying in establishing a due, fee, or other charge the Commission’s Public Reference imposed by the Exchange under Section Room, 100 F Street, NE., Washington, 19(b)(3)(A) of the Act 3 and Rule 19b– DC 20549 on official business days 4(f)(2) thereunder,4 which renders it between the hours of 10 a.m. and 3 p.m.. effective upon filing with the Copies of such filing also will be Commission. The Commission is available for inspection and copying at publishing this notice to solicit the principal office of CBOE. All comments on the proposed rule change comments received will be posted from interested persons. without change; the Commission does I. Self-Regulatory Organization’s not edit personal identifying Statement of the Terms of Substance of information from submissions. You the Proposed Rule Change should submit only information that The Exchange proposes to amend the you wish to make available publicly. All CBOE Stock Exchange (‘‘CBSX’’) market submissions should refer to File Number SR–CBOE–2008–23 and should data infrastructure fee. The text of the be submitted on or before April 8, 2008. proposed rule change is available on the Exchange’s Web site (http:// For the Commission, by the Division of www.cboe.org/legal), at the Exchange’s Trading and Markets, pursuant to delegated principal office, and at the authority.10 Commission’s Public Reference Room. Florence E. Harmon, Deputy Secretary. [FR Doc. E8–5353 Filed 3–17–08; 8:45 am] mstockstill on PROD1PC66 with NOTICES BILLING CODE 8011–01–P 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 Exchange 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 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 10 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 17:39 Mar 17, 2008 Jkt 214001 PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 14515 Exchange 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 charges CBSX market participants a monthly fee to recoup the fees CBSX pays a third-party market data vendor and other parties to help establish facilities at CBSX through which the third-party market data vendor can provide CBSX participants with certain market data.5 Currently, the amount of the fee is equal to $19,400 divided by the number of CBSX participants receiving the market data. Recently, the Exchange’s costs to provide this infrastructure have increased. To help compensate CBSX for its increased costs in providing this infrastructure, the Exchange proposes to increase the fee to $20,400 divided by the number of CBSX participants receiving the market data. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act 6 in general, and furthers the objectives of Section 6(b)(4) of the Act 7 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among its members. The Exchange believes the proposed fee will help allocate to each CBSX market participant receiving market data through this infrastructure a fair share of CBSX’s costs for providing this infrastructure. 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 No written comments were solicited or received with respect to the proposed rule change. 5 See Securities Exchange Act Release No. 55882 (June 8, 2007), 72 FR 32931 (June 14, 2007) (SR– CBOE–2007–54); and Securities Exchange Act Release No. 56231 (August 9, 2007), 72 FR 46118 (August 16, 2007) (SR–CBOE–2007–73). 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(4). E:\FR\FM\18MRN1.SGM 18MRN1

Agencies

[Federal Register Volume 73, Number 53 (Tuesday, March 18, 2008)]
[Notices]
[Pages 14514-14515]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-5353]



[[Page 14514]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57470; File No. SR-CBOE-2008-23]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to the Hybrid Agency Liaison Step-Up Rebate 
Program

March 11, 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 29, 2008, 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. 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,\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.
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    \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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE proposes to amend the Hybrid Agency Liaison (``HAL'') step-up 
rebate program. The text of the proposed rule change is available on 
the Exchange's Web site (http://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
    In January 2008, in order to incent market makers to execute orders 
at CBOE versus routing orders away via the Intermarket Options Linkage 
(``Linkage''), the Exchange established a program whereby the Exchange 
provides a rebate to market-makers that ``step-up'' and trade all or 
part of certain orders on the HAL system.\5\ Specifically, the Exchange 
rebates 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 national best bid or offer (``NBBO'') price. Market-makers not 
meeting this 80% qualifying threshold are not eligible to receive a 
rebate. The HAL rebate program allows market-makers to compete better 
for order flow in the penny pilot classes.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 57231 (January 30, 
2008), 73 FR 6752 (February 5, 2008). 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.
---------------------------------------------------------------------------

    The Exchange proposes to amend the program in two respects 
effective March 1, 2008. First, the Exchange proposes to reduce the 
qualifying threshold from 80% of a market-maker's quotes in a class to 
60%. Second, the Exchange proposes to change the qualifying time period 
from the same month in which the rebate is given to the calendar month 
prior to the month in which the rebate is given. Thus, for example, if 
at least 60% of a market-maker's quotes in a penny pilot class 
(excluding quotes in LEAPS series) in February 2008 were on one side of 
the NBBO, the market-maker would be eligible to receive the rebate for 
all of the market-maker's HAL transactions in that class in March 2008.
    The proposed reduction in the qualifying threshold is intended to 
further incent market-makers to execute orders in penny pilot classes 
at CBOE instead of routing those orders away via the Linkage. The 
proposed change in the qualifying period is intended to make the 
program easier for members to administer because members will know 
going into a given month whether or not their HAL executions that month 
will qualify for the rebate.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the Act 
\6\ in general and furthers the objectives of Section 6(b)(4) \7\ 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.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \8\ and subparagraph (f)(2) of Rule 19b-4 \9\ 
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 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.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
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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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2008-23 on the subject line.

[[Page 14515]]

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-2008-23. 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 (http://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-2008-23 and should be 
submitted on or before April 8, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-5353 Filed 3-17-08; 8:45 am]
BILLING CODE 8011-01-P