[Federal Register Volume 73, Number 6 (Wednesday, January 9, 2008)]
[Notices]
[Pages 1651-1653]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-151]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57083; File No. SR-CBOE-2007-151]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing of Proposed Rule Change Relating to
Linkage Fees
January 2, 2008.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 1652]]
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 20, 2007, Chicago Board Options Exchange, Incorporated
(``CBOE'' or the ``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. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested parties.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend its Options Intermarket Linkage
(``Linkage'') fees. 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, Proposed Rule Change
1. Purpose
Under the Exchange's current Fees Schedule, Principal (``P'') and
Principal Acting as Agent (``P/A'') orders \3\ are charged a
transaction fee of $.26 per contract.\4\ Satisfaction orders are not
assessed Exchange fees. Linkage fees are operating under a pilot
program scheduled to expire on July 31, 2008.
---------------------------------------------------------------------------
\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 an 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\ Linkage orders in MNX, NDX, and RUT options are also charged
a $.10 per contract surcharge fee. See CBOE Fees Schedule, Footnote
14.
---------------------------------------------------------------------------
The Exchange proposes to increase its Linkage transaction fee from
$.26 per contract to $.30 per contract. The proposed fee increase would
help the Exchange partially offset its costs of crediting Linkage fees
and related costs to Designated Primary Market-Makers (``DPMs'')
pursuant to the Exchange's DPM Linkage Fees Credit Program.\5\ The
Exchange believes the proposed fee is reasonable in that it is
significantly lower than Linkage fees currently charged by certain
exchanges.\6\
---------------------------------------------------------------------------
\5\ See CBOE Fees Schedule, Section 21.
\6\ The Exchange believes NYSEArca, Inc., charges $.50 per
contract on electronically executed Linkage orders and the Boston
Options Exchange charges $.45 per contract or $.50 per contract for
Linkage orders in classes included in its make or take pricing
structure.
---------------------------------------------------------------------------
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the Act
\7\ in general, and furthers the objectives of Section 6(b)(4) \8\ 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.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
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
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. 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 [email protected]. Please include
File Number SR-CBOE-2007-151 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-2007-151. 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 Section, 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-2007-151 and
[[Page 1653]]
should be submitted on or before January 30, 2008.
---------------------------------------------------------------------------
\9\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-151 Filed 1-8-08; 8:45 am]
BILLING CODE 8011-01-P