[Federal Register: February 28, 2008 (Volume 73, Number 40)]
[Notices]
[Page 10845-10846]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28fe08-111]
[[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.
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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
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 (http://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.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(4).
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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.
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 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
[[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 (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 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\
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\9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-3734 Filed 2-27-08; 8:45 am]
BILLING CODE 8011-01-P