[Federal Register: July 6, 2006 (Volume 71, Number 129)]
[Notices]
[Page 38437-38438]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06jy06-121]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54065; File No. SR-CBOE-2006-54]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Order Granting Accelerated Approval
of Proposed Rule Change to Retroactively Credit Certain DPM Linkage-
Related Transaction Fees
June 29, 2006.
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 May 31, 2006, the Chicago Board Options Exchange, Incorporated
(``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons, and is granting
accelerated approval to the proposed rule change.
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\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
The Exchange proposes to amend its Fees Schedule to retroactively
credit Designated Primary Market-Makers (``DPMs'') for certain fees
they incur in executing orders under the Intermarket Options Linkage
Plan (``Linkage''). The text of the proposed rule change is available
on the Exchange's website (http://www.cboe.com), 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, 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 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 purpose of the proposed rule change is to amend the CBOE Fees
Schedule to retroactively establish certain fee relief that was
provided prospectively in a previous CBOE rule change filing, SR-CBOE-
2006-44 (``Previous Filing'').\3\
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\3\ See Securities Exchange Act Release No. 53866 (May 25,
2006), 71 FR 31237 (June 1, 2006) (Notice of Filing and Immediate
Effectiveness of File No. SR-CBOE-2006-44).
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In the Previous Filing, the Exchange amended Section 21 of the CBOE
Fees Schedule to enhance the credits provided to DPMs under the DPM
Linkage Fees Credit Program (``Program''). Under the enhanced Program
established by the Previous Filing, the Exchange credits DPMs for
certain fees they incur related to the execution of: (i) Outbound
principal acting as agent (``P/A'') orders; and (ii) outbound Principal
orders on behalf of orders that are for the account of a broker-dealer
(``P orders''). The purpose of the Program is to offset the additional
costs DPMs incur in routing orders to other exchanges in order to
obtain the National Best Bid or Offer (``NBBO'').
The Previous Filing established the enhanced Program as of May 18,
2006. In this filing, the Exchange proposes to extend this fee relief
retroactively back to all applicable transactions occurring since May
1, 2006, a total of 13 business days.
2. Statutory Basis
The Exchange states 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 CBOE members.
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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 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 states that no written comments were solicited or
received
[[Page 38438]]
with respect to the proposed rule change.
III. 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 No. SR-CBOE-2006-54 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-2006-54. 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 Commissions 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. 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-2006-54 and should be submitted by July 27, 2006.
IV. Commission Findings and Order Granting Accelerated Approval of a
Proposed Rule Change
After careful consideration, the Commission finds that the proposed
rule change is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
exchange.\6 \In particular, the Commission finds that the proposed rule
change is consistent with the requirements of Section 6(b)(4) of the
Act,\7\ in that, by retroactively crediting DPMs for certain fees they
incur in executing Linkage orders, the proposed rule change should help
to ensure the equitable allocation of reasonable dues, fees, and other
charges among the Exchange's members. As noted above, the Exchange
recently established the proposed fees on a going-forward basis.\8 \
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\6\ In approving this proposed rule change, the Commission notes
that it has considered the proposed rule's impact on efficiency,
competition, and capital formation. See U.S.C. 78c(f).
\7\ 15 U.S.C. 78f(b)(4).
\8\ See Securities Exchange Act Release No. 53866, supra at note
3.
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The Commission finds good cause, pursuant to section 19(b)(2) of
the Act,\9\ for approving the proposed rule change prior to the
thirtieth day after publication of the notice of filing thereof in the
Federal Register. The proposal would allow the Exchange to apply the
Program retroactively, for 13 additional business days. The Commission
did not receive any comments regarding the Previous Filing, and
therefore believes that retroactively crediting DPMs for certain fees
they incur in executing Linkage orders would not raise any new or novel
regulatory issues.
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\9\ 15 U.S.C. 78s(b)(2).
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V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the Act
\10\ that the proposed rule change (SR-CBOE-2006-54) is approved on an
accelerated basis.
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\10\ Id.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-10534 Filed 7-5-06; 8:45 am]
BILLING CODE 8010-01-P