Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to an Extension of the Linkage Fee Pilot Program, 40645-40646 [E8-16060]

Download as PDF Federal Register / Vol. 73, No. 136 / Tuesday, July 15, 2008 / Notices reasonable and consistent with the Act for the Exchanges to adopt new trading halt criteria for certain derivative products in the manner described in the respective proposals. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,12 that the proposed rule changes (SR–Amex– 2008–40; SR–NYSE–2008–39; SR– NYSEArca–2008–50) and the proposed rule change (SR–NASDAQ–2008–046), as modified by Amendment No. 1 thereto, be, and they hereby are, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Acting Secretary. [FR Doc. E8–16059 Filed 8–14–08; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58117; File No. SR–CBOE– 2008–69] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to an Extension of the Linkage Fee Pilot Program July 8, 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 June 30, 2008, 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 prepared substantially by CBOE. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. mstockstill on PROD1PC66 with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change CBOE proposes to amend its Fees Schedule to extend through July 31, 2009 the Options Intermarket Linkage (‘‘Linkage’’) fees pilot program. The text of the proposed rule change is available at http://www.cboe.org/legal, the 12 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 13 17 VerDate Aug<31>2005 15:01 Jul 14, 2008 Jkt 214001 Exchange, and 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. The 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’s fees for Principal (‘‘P’’) and Principal Acting as Agent (‘‘P/ A’’) orders 3 are operating under a pilot program scheduled to expire on July 31, 2008.4 The Exchange proposes to amend its Fees Schedule to extend the pilot program until July 31, 2009. The Exchange is proposing no other changes to the operation of the pilot program. The Exchange assesses its members the following Linkage order related fees: (i) $.30 per contract transaction fee, and (ii) $.10 per contract surcharge fee on transactions in options on the Nasdaq100 Index (MNX and NDX) and options on the Russell 2000 Index (RUT).5 Satisfaction orders are not assessed Exchange fees. The Exchange believes that extension of the Linkage fee pilot program until July 31, 2009 will give the Commission the Plan for the Purpose of Creating and Operating an Options Intermarket Linkage (‘‘Plan’’) and Exchange Rule 6.80(12), which tracks the language of the Plan, a ‘‘Linkage Order’’ means an Immediate or Cancel Order routed through the Linkage as permitted under the Plan. There are three types of Linkage Orders: (i) ‘‘P/A Order’’, which is an order for the principal account of a specialist (or equivalent entity on another Participant Exchange that is authorized to represent Public Customer orders), reflecting the terms of a related unexecuted Public Customer order for which the specialist is acting as agent; (ii) ‘‘P Order’’, which is an order for the principal account of an Eligible Market Maker and is not a P/A Order; and (iii) ‘‘Satisfaction Order,’’ which is an order sent through the Linkage to notify a member of another Participant Exchange of a Trade-Through and to seek satisfaction of the liability arising from that Trade-Through. 4 See Securities Exchange Act Release No. 56132 (July 25, 2007), 72 FR 42158 (August 1, 2007) (SR– CBOE–2007–71). 5 See CBOE Fees Schedule, Footnote 14. Surcharge fees are also assessed on OEX, XEO, SPX, volatility index options, DJX and DXL options; however, Linkage fees do not apply to these products as they are not multiply listed. PO 00000 3 Under Frm 00167 Fmt 4703 Sfmt 4703 40645 further opportunity to evaluate the appropriateness of Linkage fees. The Exchange also proposes to amend Section 21 of the Fees Schedule to change the Linkage fees pilot expiration date included in that section to July 31, 2009, thereby extending the term of the DPM Linkage Fees Credit program for PA orders. 2. Statutory Basis The Exchange believes 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 and other persons using its facilities. The Exchange believes that extension of the Linkage fee pilot program until July 31, 2009 will give the Commission further opportunity to evaluate the appropriateness of Linkage fees. 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 does not: (i) Significantly affect the protection of investors or the public interest; (ii) Impose any significant burden on competition; and (iii) Become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 8 and Rule 19b–4(f)(6) thereunder.9 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, 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)(6). 7 15 E:\FR\FM\15JYN1.SGM 15JYN1 40646 Federal Register / Vol. 73, No. 136 / Tuesday, July 15, 2008 / Notices 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Acting Secretary. [FR Doc. E8–16060 Filed 7–14–08; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments [Release No. 34–58119; File No. SR-CBOE– 2008–53] • 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–2008–69 on the subject line. Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving Proposed Rule Change Pertaining to the Imposition of Fines for Minor Rule Violations mstockstill on PROD1PC66 with NOTICES Paper Comments July 8, 2008. On May 19, 2008, the Chicago Board Options Exchange, Incorporated • Send paper comments in triplicate (‘‘CBOE’’ or ‘‘Exchange’’) filed with the to Secretary, Securities and Exchange Securities and Exchange Commission Commission, 100 F Street, NE., (‘‘Commission’’), pursuant to Section Washington, DC 20549–1090. 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 All submissions should refer to File thereunder,2 a proposed rule change to Number SR–CBOE–2008–69. This file amend CBOE Rule 17.50 (Imposition of number should be included on the subject line if e-mail is used. To help the Fines for Minor Rule Violations) and to revise the provisions of CBOE Commission process and review your 17.50(g)(1) (Violations of Position Limits comments more efficiently, please use only one method. The Commission will Rules). The proposed rule change was post all comments on the Commission’s published for comment in the Federal Register on June 5, 2008.3 The Internet Web site (http://www.sec.gov/ Commission received no comments rules/sro.shtml). Copies of the regarding the proposal. This order submission, all subsequent approves the proposed rule change. amendments, all written statements The proposal would, in connection with respect to the proposed rule with any member or customer who change that are filed with the exceeds the Exchange’s position limit in Commission, and all written accordance with CBOE Rule 4.11, communications relating to the increase the fine levels specified in the proposed rule change between the Minor Rule Violation Plan (‘‘MRVP’’); Commission and any person, other than consolidate individual members, those that may be withheld from the member organizations, and customers public in accordance with the into one category; and lengthen the provisions of 5 U.S.C. 552, will be surveillance period from a 12-month available for inspection and copying in period to a rolling 24-month period. the Commission’s Public Reference The Commission finds that the Room on official business days between proposed rule change is consistent with the requirements of the Act and the the hours of 10 a.m. and 3 p.m. Copies rules and regulations thereunder of such filing also will be available for applicable to a national securities inspection and copying at the principal exchange.4 In particular, the office of the Exchange. All comments received will be posted without change; Commission believes that the proposal is consistent with Section 6(b)(5) of the the Commission does not edit personal identifying information from 10 17 CFR 200.30–3(a)(12). submissions. You should submit only 1 15 U.S.C. 78s(b)(1). information that you wish to make 2 17 CFR 240.19b–4. available publicly. All submissions 3 See Securities Exchange Act Release No. 57883 should refer to File Number SR–CBOE– (May 29, 2008), 73 FR 32065. 4 In approving this proposed rule change, the 2008–69 and should be submitted on or Commission notes that it has considered the before August 5, 2008. proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Aug<31>2005 15:01 Jul 14, 2008 Jkt 214001 PO 00000 Frm 00168 Fmt 4703 Sfmt 4703 Act,5 which requires that the rules of an exchange be designed to promote just and equitable principles of trade, to facilitate transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Commission further believes that CBOE’s proposal is consistent with Sections 6(b)(1) and 6(b)(6) of the Act,6 which require that the rules of an exchange enforce compliance with, and provide appropriate discipline for, violations of Commission and Exchange rules. In addition, because existing CBOE Rule 17.50 provides procedural rights to a person fined under the MRVP to contest the fine and permits a hearing on the matter, the Commission believes that the MRVP, as amended by this proposal, provides a fair procedure for the disciplining of members and persons associated with members, consistent with Sections 6(b)(7) and 6(d)(1) of the Act.7 In addition, the Commission finds that the proposal is consistent with the public interest, the protection of investors, or otherwise in furtherance of the purposes of the Act, as required by Rule 19d–1(c)(2) under the Act,8 which governs minor rule violation plans. The Commission believes that the proposed rule change should strengthen the Exchange’s ability to carry out its oversight and enforcement responsibilities as an SRO in cases where full disciplinary proceedings are unsuitable in view of the minor nature of the particular violation. In approving this proposed rule change, the Commission in no way minimizes the importance of compliance with CBOE rules and all other rules subject to the imposition of fines under the MRVP. The Commission believes that the violation of any SRO rules, as well as Commission rules, is a serious matter. However, the MRVP provides a reasonable means of addressing rule violations that do not rise to the level of requiring formal disciplinary proceedings, while providing greater flexibility in handling certain violations. The Commission expects that CBOE would continue to conduct surveillance with due diligence and make a determination based on its findings, on a case-by-case basis, whether a fine of more or less than the recommended amount is appropriate for a violation under the CBOE MRVP or whether a violation requires formal 5 15 U.S.C. 78f(b)(5). U.S.C. 78f(b)(1) and 78f(b)(6). 7 15 U.S.C. 78f(b)(7) and 78f(d)(1). 8 17 CFR 240.19d–1(c)(2). 6 15 E:\FR\FM\15JYN1.SGM 15JYN1

Agencies

[Federal Register Volume 73, Number 136 (Tuesday, July 15, 2008)]
[Notices]
[Pages 40645-40646]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-16060]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58117; File No. SR-CBOE-2008-69]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to an Extension of the Linkage Fee Pilot Program

July 8, 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 June 30, 2008, 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 prepared 
substantially by CBOE. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE proposes to amend its Fees Schedule to extend through July 31, 
2009 the Options Intermarket Linkage (``Linkage'') fees pilot program. 
The text of the proposed rule change is available at http://
www.cboe.org/legal, the Exchange, and 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. The 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's fees for Principal (``P'') and Principal Acting as 
Agent (``P/A'') orders \3\ are operating under a pilot program 
scheduled to expire on July 31, 2008.\4\ The Exchange proposes to amend 
its Fees Schedule to extend the pilot program until July 31, 2009. The 
Exchange is proposing no other changes to the operation of the pilot 
program.
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    \3\ Under the Plan for the Purpose of Creating and Operating an 
Options Intermarket Linkage (``Plan'') and Exchange Rule 6.80(12), 
which tracks the language of the Plan, a ``Linkage Order'' means an 
Immediate or Cancel Order routed through the Linkage as permitted 
under the Plan. There are three types of Linkage Orders: (i) ``P/A 
Order'', which is an order for the principal account of a specialist 
(or equivalent entity on another Participant Exchange that is 
authorized to represent Public Customer orders), reflecting the 
terms of a related unexecuted Public Customer order for which the 
specialist is acting as agent; (ii) ``P Order'', which is an order 
for the principal account of an Eligible Market Maker and is not a 
P/A Order; and (iii) ``Satisfaction Order,'' which is an order sent 
through the Linkage to notify a member of another Participant 
Exchange of a Trade-Through and to seek satisfaction of the 
liability arising from that Trade-Through.
    \4\ See Securities Exchange Act Release No. 56132 (July 25, 
2007), 72 FR 42158 (August 1, 2007) (SR-CBOE-2007-71).
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    The Exchange assesses its members the following Linkage order 
related fees: (i) $.30 per contract transaction fee, and (ii) $.10 per 
contract surcharge fee on transactions in options on the Nasdaq-100 
Index (MNX and NDX) and options on the Russell 2000 Index (RUT).\5\ 
Satisfaction orders are not assessed Exchange fees.
---------------------------------------------------------------------------

    \5\ See CBOE Fees Schedule, Footnote 14. Surcharge fees are also 
assessed on OEX, XEO, SPX, volatility index options, DJX and DXL 
options; however, Linkage fees do not apply to these products as 
they are not multiply listed.
---------------------------------------------------------------------------

    The Exchange believes that extension of the Linkage fee pilot 
program until July 31, 2009 will give the Commission further 
opportunity to evaluate the appropriateness of Linkage fees.
    The Exchange also proposes to amend Section 21 of the Fees Schedule 
to change the Linkage fees pilot expiration date included in that 
section to July 31, 2009, thereby extending the term of the DPM Linkage 
Fees Credit program for PA orders.
2. Statutory Basis
    The Exchange believes 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 and other persons using its 
facilities. The Exchange believes that extension of the Linkage fee 
pilot program until July 31, 2009 will give the Commission further 
opportunity to evaluate the appropriateness of Linkage fees.
---------------------------------------------------------------------------

    \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

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) Impose any significant burden on competition; and
    (iii) Become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to Section 19(b)(3)(A) of the Act \8\ and 
Rule 19b-4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
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    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,

[[Page 40646]]

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 rule-comments@sec.gov. Please include 
File Number SR-CBOE-2008-69 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2008-69. 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 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 Exchange. 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-2008-69 and should be submitted on or before August 5, 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,
Acting Secretary.
[FR Doc. E8-16060 Filed 7-14-08; 8:45 am]
BILLING CODE 8010-01-P