Document ID: SEC-2005-0464-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Chicago Board Options Exchange, Inc.
Posted Date: 2005-12-29T05:00Z

[Federal Register: December 29, 2005 (Volume 70, Number 249)]
[Notices]               
[Page 77213-77214]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29de05-104]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52987; File No. SR-CBOE-2005-108]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to a Session Fee Increase for the 
Regulatory Element of the Continuing Education Requirements of CBOE 
Rule 9.3A

December 20, 2005.
    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 December 12, 2005, the Chicago Board Options Exchange, Incorporated 
(``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. The 
Exchange has designated this proposal as one establishing or changing a 
due, fee, or other charge imposed by 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

    CBOE proposes to amend its Fees Schedule to increase the session 
fee for the Regulatory Element of the Continuing Education requirements 
of CBOE Rule 9.3A. Below is the text of the proposed rule change. 
Proposed new language is in italics; proposed deletions are in 
[brackets].
* * * * *
Chicago Board Options Exchange, Inc.--Fees Schedule
December [1]12, 2005

    1.-4. Unchanged.
    FOOTNOTES: (1)-(18) Unchanged.
    5.-11. Unchanged.
    12. REGULATORY FEES
    (A)-(E) Unchanged.
    (F) Continuing Education Fee:
    There shall be a session fee of $75.00 assessed as to each 
individual who is required to complete the Regulatory Element of the 
Continuing Education Requirements pursuant to CBOE Rule 9.3A.
    13.-23. Unchanged.
    Remainder of Fees Schedule--Unchanged.
* * * * *

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, the Proposed Rule Change

1. Purpose
    The Regulatory Element, a computer-based education program 
administered by The National Association of Securities Dealers, Inc. 
(``NASD'') to help ensure that registered persons are kept up-to-date 
on regulatory, compliance, and sales practice matters in the industry, 
is a component of the Securities Industry Continuing Education Program 
(``Program'') under CBOE Rule 9.3A. The Securities Industry/Regulatory 
Council on Continuing Education (``Council'') \5\ was organized in 1995 
to facilitate cooperative industry/regulatory coordination of the 
administration and future development of the Program in keeping with 
applicable industry regulations and changing industry needs. Its roles 
include recommending and helping develop specific content and questions 
for the Regulatory Element, defining minimum core curricula for the 
Firm Element component of the Program, and developing and updating 
information about the Program for industry-wide dissemination.
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    \5\ The Council currently consists of 20 individuals, 14 of whom 
are securities industry professionals associated with NASD member 
firms and six of whom represent self-regulatory organizations (the 
American Stock Exchange LLC, CBOE, the Municipal Securities 
Rulemaking Board, NASD, the New York Stock Exchange, Inc., and the 
Philadelphia Stock Exchange, Inc.).
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    It is the Council's responsibility to maintain the Program on a 
revenue neutral basis while maintaining adequate reserves for 
unanticipated future expenditures.\6\ In December 2003, the Council 
voted to reduce the Regulatory Element session fee from $65 to $60 
effective January 1, 2004, in order to reduce the reserves to a level 
necessary to support current and expected programs and expenses. The 
Council decided to review the reserve level and evaluate the Regulatory 
Element session fee on an annual basis. The 2004 financial review and 
evaluation produced no change in the Regulatory Element session fee. In 
September 2005, the Council's annual financial review and evaluation 
revealed that unless the Regulatory Element session fee were adjusted, 
the Council's reserves were likely to be insufficient in 2006. The 
reasons for the declining surplus are: (1) Lower than projected session 
volume resulting in a significant decrease in actual revenue over 
projected revenue; (2) higher delivery-related expenses beginning in 
2006; and (3) costs associated with the

[[Page 77214]]

rebuilding of PROCTOR[reg].\7\ At its September 2005 meeting, the 
Council voted unanimously to increase the Regulatory Element session 
fee from $60 to $75, effective January 1, 2006, in order to meet costs 
and maintain an adequate reserve in 2006.
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    \6\ The Regulatory Element session fee was initially set at $75 
when NASD established the continuing education requirements in 1995. 
The session fee was reduced in 1999 to $65 and again in 2004 to $60. 
The proposed fee increase returns the Regulatory Element session fee 
to its 1995 level.
    \7\ PROCTOR[reg] is a technology system that supports computer-
based testing and training. The Regulatory Element program uses 
PROCTOR[reg] to package content, deliver, score and report results, 
and maintain and generate statistical data related to the Program.
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    The proposed implementation date is January 1, 2006.
2. Statutory Basis
    The CBOE believes the proposed rule change is consistent with 
section 6(b) of the Act,\8\ in general, and furthers the objectives of 
sections 6(b)(4) \9\ and 6(b)(5) \10\ 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, and that CBOE rules must be designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, and, in general, to protect investors 
and the public interest. CBOE believes that the proposed rule change is 
designed to accomplish these ends by enabling the Program to be 
maintained on a revenue neutral basis while maintaining adequate 
reserves for unanticipated future expenditures.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
    \10\ 15 U.S.C. 78f(b)(5).
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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 the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    CBOE has neither solicited nor received comments on the proposed 
rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to section 
19(b)(3)(A)(ii) of the Act \11\ and Rule 19b-4(f)(2) thereunder,\12\ 
because it establishes or changes a due, fee, or other charge imposed 
by the CBOE. Accordingly, the proposal will take effect upon filing 
with the Commission. At any time within 60 days of the filing of the 
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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    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 17 CFR 240.19b-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 Number SR-CBOE-2005-108 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-2005-108. 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 the filing 
also will be available for inspection and copying at the principal 
offices of 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-2005-108 and should be submitted on or before January 19, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
 [FR Doc. E5-8063 Filed 12-28-05; 8:45 am]

BILLING CODE 8010-01-P