[Federal Register: November 28, 2003 (Volume 68, Number 229)]
[Notices]
[Page 66908]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28no03-128]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-48815; File No. SR-CBOE-2003-33]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change and Amendment No. 1 Thereto by the Chicago Board Options
Exchange, Inc., Relating to Non-Member Market Maker Transaction Fees
November 20, 2003.
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 July 30, 2003, the Chicago Board Options Exchange, Inc. (``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 by CBOE. On November 13,
2003, CBOE filed Amendment No. 1 by facsimile.\3\ 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\ See letter from Christopher R. Hill, Assistant General
Counsel, CBOE to Leah Mesfin, Attorney, Division of Market
Regulation, Commission, dated November 13, 2003 (``Amendment No.
1''). In Amendment No. 1, CBOE modified its argument in support of
the proposal.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
CBOE proposes to change its Fee Schedule to increase transaction
fees for orders originating from non-member market makers by $.02 per
contract. The text of the proposed rule change is available at the
Office of the Secretary, CBOE and at the Commission.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, CBOE included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. CBOE has prepared summaries, set forth in sections A, B,
and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of and
Statutory Basis for, Proposed Rule Change
1. Purpose
Currently, the Exchange charges transaction fees for orders
executed on behalf of non-member market makers (i.e., those designated
with an ``N'' origin code) that are equal to member market maker and
member firm rates in the equities and QQQ options ($.19 per contract)
and equal to customer rates in index products ($.15 to $.40). CBOE
represents that Exchange members have complained that such equivalence
of fees is unfair to Exchange members, who pay a variety of additional
fees through their membership in the Exchange to help offset the
Exchange's expenses. In order to more fairly assess Exchange costs
among the individuals and organizations who avail themselves of the
Exchange's trading opportunities, the Exchange proposes to increase
transaction fees for N orders by $.02 per contract.
In connection with the $.02 increase, the Exchange notes two
points. First, the Exchange notes that since it does not permit non-
members to enter orders on the Exchange, the Exchange will not be
directly assessing any such fees upon non-members. Second, the Exchange
notes that the $.02 increase will not apply to linkage orders.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with section 6(b) of the Act \4\ in general, and furthers the
objectives of Section 6(b)(4) of the Act \5\ in particular, in that it
is designed to provide for the equitable allocation of reasonable dues,
fees, and other charges among Exchange members and issuers and other
persons using its facilities.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(4).
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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 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
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) by order approve such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
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 Section. Copies of such filing will also
be available for inspection and copying at the principal office of
CBOE. All submissions should refer to File No. SR-CBOE-2003-33 and
should be submitted by December 19, 2003.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-29660 Filed 11-26-03; 8:45 am]
BILLING CODE 8010-01-P