55194 Federal Register / Vol. 70, No. 181 / Tuesday, September 20, 2005 / Notices 

7The Commission added to this sentence 

pursuant to a telephone conversation with CBOE, 

as noted herein. Telephone call between Tim Fox, 

Special Counsel, Commission, and Patrick Sexton, 

Assistant General Counsel, CBOE on September 12, 

2005. 

8See Supra note 3. 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(5). 

11 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(iii). 

4 17 CFR 240.19b–4(f)(6). 

calculated based on the number of 

contracts the sending and receiving 

Linkage Plan participants 

(‘‘Participants’’) guaranteed they would 

automatically execute. Now that all 

Participants disseminate dynamic 

quotes with size, the Participants 

believe that it is appropriate to calculate 

the FCQS based on the size of the 

disseminated quotation of the 

Participant receiving the P/A Order. 

Accordingly, the Exchange proposes to 

amend CBOE Rule 6.80 to effect this 

change.7

The other purpose of the proposed 

rule change is to eliminate a 15-second 

wait period for sending a secondary 

P/A Order currently provided in 

Exchange Rule 6.81(b)(2). Exchange 

Rule 6.81(b)(2) governs the manner in 

which a P/A Order larger than the FCQS 

can be broken into smaller P/A Orders. 

Currently, Exchange Rule 6.81(b)(2) 

provides that an initial P/A Order can 

be sent to the Participant disseminating 

the National Best Bid or Offer for the 

FCQS, and if that Participant continues 

to disseminate the same price after 15 

seconds from the execution of the initial 

P/A Order, a subsequent P/A Order can 

be sent for at least the lesser of (i) the 

size of the disseminated quote; (ii) 100 

contracts; or (iii) the remainder of the 

customer order underlying the P/A 

Orders. The Exchange proposes to 

eliminate the 15-second waiting period 

because the dynamic quotes with size 

now employed by the Participants 

obviate the need for a manual quote 

refresh period for P/A Orders. This 

proposed rule change would conform 

the CBOE rules to the pending 

Amendment No. 16 to the Linkage 

Plan.8

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with section 6(b) 

of the Act 9 in general, and furthers the 

objectives of section 6(b)(5) of the Act 10

in particular, in that it is designed to 

promote just and equitable principles of 

trade, 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. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The CBOE does not believe that the 

proposed rule change would 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 

Written comments were neither 

solicited nor received. 

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 CBOE 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 rulecomments@sec.gov. Please include File 

Number SR–CBOE–2005–68 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Jonathan G. Katz, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–9303. 

All submissions should refer to File 

Number SR–CBOE–2005–68. 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. 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 publicly available. All 

submissions should refer to File 

Number SR–CBOE–2005–68 and should 

be submitted on or before October 11, 

2005. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.11

Jonathan G. Katz, 

Secretary. 

[FR Doc. 05–18670 Filed 9–19–05; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–52423; File No. SR–CBOE–

2005–76] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Inc.; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change To Extend the Duration of 

CBOE Rule 6.45A(b) Pertaining to 

Orders Represented in Open Outcry 

September 14, 2005. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on 

September 13, 2005, the Chicago Board 

Options Exchange, Inc. (‘‘CBOE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the CBOE. The Exchange filed the 

proposal as a ‘‘non-controversial’’

proposed rule change pursuant to 

Section 19(b)(3)(A)(iii) of the Act 3 and 

Rule 19b–4(f)(6) thereunder,4 which 

Federal Register / Vol. 70, No. 181 / Tuesday, September 20, 2005 / Notices 55195 

5See Securities Exchange Act Release No. 51366 

(March 14, 2005), 70 FR 13217 (March 18, 2005) 

(SR–CBOE–2004–75). 

6 In order to effect proprietary transactions on the 

floor of the Exchange, in addition to complying 

with the requirements of the Rule, members are also 

required to comply with the requirements of 

Section 11(a)(1) of the Act, 15 U.S.C. 78k(a)(1), or 

qualify for an exemption. Section 11(a)(1) restricts 

securities transactions of a member of any national 

securities exchange effected on that exchange for (i) 

the member’s own account, (ii) the account of a 

person associated with the member, or (iii) an 

account over which the member or a person 

associated with the member exercises discretion, 

unless a specific exemption is available. The 

Exchange will issue a regulatory circular to 

members reminding them of the applicability of 

these Section 11(a)(1) requirements. 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(6). 

11 Id. 

12For the purposes only of waiving the operative 

date of this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

renders it effective upon filing with the 

Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The CBOE proposes to extend the 

duration of CBOE Rule 6.45A(b) (the 

‘‘Rule’’), relating to the allocation of 

orders represented in open outcry in 

equity option classes designated by the 

Exchange to be traded on the CBOE 

Hybrid Trading System (‘‘Hybrid’’), 

through December 14, 2005. No other 

substantive changes are being made to 

the Rule. The text of the proposed rule 

change is available on the CBOE’s Web 

site (http://www.cboe.com), at the 

CBOE’s principal office, 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 those 

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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

In March 2005, the Commission 

approved revisions to CBOE Rule 6.45A 

related to the introduction of Remote 

Market-Makers.5 Among other things, 

the Rule, pertaining to the allocation of 

orders represented in open outcry in 

equity options classes traded on Hybrid, 

was amended to clarify that only incrowd market participants would be 

eligible to participate in open outcry 

trade allocations. In addition, the Rule 

was amended to limit its duration until 

September 14, 2005, unless otherwise 

extended. As the duration period 

expires on September 14, 2005, the 

Exchange proposes to extend the 

effectiveness of the Rule through 

December 14, 2005.6

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 

and the rules and regulations under the 

Act applicable to a national securities 

exchange and, in particular, the 

requirements of Section 6(b) of the Act.7

Specifically, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 8 requirements that 

the rules of an exchange be designed to 

promote just and equitable principles of 

trade, to prevent fraudulent and 

manipulative acts and, in general, to 

protect investors and the public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The CBOE does not believe that the 

proposed rule change will impose any 

burden on competition 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 neither solicited nor 

received comments on the proposal. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change: (1) Does not significantly affect 

the protection of investors or the public 

interest; (2) does not impose any 

significant burden on competition; and 

(3) does not become operative for thirty 

days from the date on which it was 

filed, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest, it has become effective 

pursuant to Section 19(b)(3)(A) of the 

Act 9 and Rule 19b–4(f)(6) 10 thereunder. 

A proposed rule change filed under 

Commission Rule 19b–4(f)(6) 11

normally does not become operative 

prior to thirty days after the date of 

filing. The CBOE requests that the 

Commission waive the 30-day operative 

delay, as specified in Rule 19b–

4(f)(6)(iii), and designate the proposed 

rule change to become operative 

immediately to allow the Exchange to 

continue to operate under the existing 

allocation parameters for orders 

represented in open outcry in Hybrid on 

an uninterrupted basis. The 

Commission hereby grants the request. 

The Commission believes that waiving 

the 30-day operative delay is consistent 

with the protection of investors and the 

public interest because such waiver will 

allow the CBOE to continue to operate 

under the Rule without interruption. 

For these reasons, the Commission 

designates the proposed rule change as 

effective and operative immediately.12

At any time within 60 days of the 

filing of the proposed rule change the 

Commission may summarily abrogate 

such proposed 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. 

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 rulecomments@sec.gov. Please include File 

Number SR–CBOE–2005–76 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Jonathan G. Katz, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–9303. 

All submissions should refer to File 

Number SR–CBOE–2005–76. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

55196 Federal Register / Vol. 70, No. 181 / Tuesday, September 20, 2005 / Notices 

13 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2The amendment corrected a pagination error in 

the original filing. 

3The Commission has modified the text of the 

summaries prepared by DTC. 4 15 U.S.C. 78q–1. 

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. 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–2005–76 and should 

be submitted on or before October 11, 

2005. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.13

Jonathan G. Katz, 

Secretary. 

[FR Doc. 05–18674 Filed 9–19–05; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–52422; No. SR–DTC–2005–

11] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Establish an 

Insurance Program as Part of the 

Profile Modification System Feature of 

Its Direct Registration System 

September 14, 2005. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

August 22, 2005, The Depository Trust 

Company (‘‘DTC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) and on August 22, 

2005, amended 2 the rule change 

described in Items I, II, and III below, 

which items have been prepared 

primarily by DTC. The Commission is 

publishing this notice to solicit 

comments on the rule change from 

interested parties. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The rule change establishes an 

insurance program as part of DTC’s 

Profile Modification System (‘‘Profile’’) 

of its Direct Registration System 

(‘‘DRS’’). 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

DTC included statements concerning 

the purpose of and basis for the rule 

change and discussed any comments it 

received on the rule change. The text of 

these statements may be examined at 

the places specified in Item IV below. 

DTC has prepared summaries, set forth 

in sections (A), (B), and (C) below, of the 

most significant aspects of these 

statements.3

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

Currently, Profile allows a DTC 

participant to submit electronically to a 

transfer agent that is a DRS limited 

participant an investor’s instruction that 

its share positions be moved from the 

investor’s DRS account with the DRS 

limited participant to the investor’s 

broker-dealer’s participant account at 

DTC. Similarly, a DRS limited 

participant may submit an investor’s 

instruction for the movement of its 

share positions from the investor’s 

broker-dealer’s participant account at 

DTC to an account maintained by the 

DRS limited participant. 

Currently, all Profile users must agree 

to a Participant Terminal System 

(‘‘PTS’’) screen indemnity as part of 

their use of Profile and must procure a 

surety bond relating to their obligations 

under such indemnity (‘‘Surety 

Program’’). Participation in the Surety 

Program requires the payment of an 

annual premium of $3,150 to a surety 

provider and a DTC administration fee 

of $250. The Surety Program provides 

for a coverage limit of $3 million per 

occurrence and an annual aggregate 

limit of $6 million. 

DTC believes the cost of the annual 

surety and the coverage limit may be a 

disincentive for some to use Profile. In 

order to encourage greater participation 

in the service, DTC proposes the 

implementation of the DTC Profile 

Modification System Indemnity 

Insurance Program (‘‘Insurance 

Program’’). Under the Insurance 

Program, Profile users will have the 

option to procure indemnity insurance 

with higher coverage limits ($25 million 

per occurrence per policy with an 

annual aggregate limit of $100 million) 

than the surety bond under the Surety 

Program provides, which will allow 

larger transactions to be covered under 

one policy. Furthermore, Profile users 

will have the option to procure 

indemnity insurance at an annual fee 

that is less than the premium for the 

Surety Program. In addition to any passthrough fee from the insurer, DTC will 

charge users participating in the 

Insurance Program an annual 

administration fee of $250 and a $2.50 

per transaction fee. Users will be able to 

participate in both the Surety Program 

and the Insurance Program but would be 

required and permitted to use only one 

provider per Profile transaction. 

The issuing insurance company will 

be either a company selected by DTC as 

the administrator of such insurance or 

an insurance company selected by the 

user procuring the insurance, provided 

the insurance company will issue 

insurance subject to the terms and 

conditions established by DTC for the 

Insurance Program. 

DTC believes the rule change is 

consistent with Section 17A of the Act,4

as amended, because it is a modification 

of a DTC service that enhances the 

safeguards for transactions processed in 

the service. As such it is a change to an 

existing service that will not adversely 

affect the safeguarding of securities and 

funds in DTC’s custody or control. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

DTC does not believe that the rule 

change will have any impact or impose 

any burden on competition. 

(C) Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments relating to the rule 

change have not yet been solicited or 

received. DTC will notify the 

Commission of any written comments it 

receives.