Document ID: SEC-2008-0051-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Incorporated
Posted Date: 2008-01-09T05:00Z

[Federal Register: January 9, 2008 (Volume 73, Number 6)]
[Notices]               
[Page 1651-1653]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09ja08-76]                         

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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.
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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 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.
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    \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.
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    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\
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    \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.
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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.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
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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 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 rule-comments@sec.gov. 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.
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    \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