Document ID: SEC-2006-0668-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Chicago Board Options Exchange, Inc.
Posted Date: 2006-05-24T04:00Z

[Federal Register: May 24, 2006 (Volume 71, Number 100)]
[Notices]               
[Page 30007-30009]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24my06-140]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53832; File No. SR-CBOE-2006-46]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to Rule 15.9, Regulatory Cooperation

May 18, 2006.
    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 May 8, 2006, 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 and II below, which Items have been prepared by the Exchange. 
The Exchange filed the proposed rule change as a ``non-controversial'' 
rule change under Rule 19b-4(f)(6) under the Act,\3\ which rendered 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\ 17 CFR 240.19b-4(f)(6).
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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 CBOE Rule 15.9, Regulatory 
Cooperation, to clarify that the Exchange may contract with another 
self-regulatory organization (``SRO'') for the performance of certain 
of CBOE's regulatory functions. The text of the proposed rule change is 
available on the Exchange's Web site, http://www.cboe.com, 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, the Exchange included statements

[[Page 30008]]

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 Exchange 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
    CBOE Rule 15.9(a) allows the Exchange to enter into agreements with 
domestic and foreign SROs, associations and contract markets and the 
regulators of such markets for the exchange of information and other 
regulatory purposes.\4\
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    \4\ The Exchange has entered into a Regulatory Services 
Agreement (``RSA'') with other options markets participating in the 
proposed Options Regulatory Surveillance Authority (``ORSA'') 
national market system plan. Under the ORSA RSA, CBOE will provide 
certain regulatory services to the other options markets.
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    The Exchange proposes to amend CBOE Rule 15.9 to expressly allow 
the Exchange to contract with another SRO for the performance of 
certain of CBOE's regulatory functions. The proposed rule change would 
enhance CBOE's ability to carry out its regulatory obligations under 
the Act by providing CBOE the ability to contract with another SRO for 
regulatory services.
    Under any agreement for regulatory services with another SRO, CBOE 
would remain an SRO registered under section 6 of Act \5\ and, 
therefore, would continue to have statutory authority and 
responsibility for enforcing compliance by its members, and persons 
associated with its members, with the Act, the rules thereunder, and 
the rules of the Exchange.
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    \5\ 15 U.S.C. 78f.
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    The proposed rule change specifically states that any action taken 
by another SRO, or its employees or authorized agents, operating on 
behalf of CBOE pursuant to a regulatory services agreement with CBOE, 
would be deemed an action taken by CBOE. Under any agreement for 
regulatory services with another SRO, CBOE would retain ultimate 
responsibility for performance of its SRO duties, and the proposed rule 
change states that CBOE shall retain ultimate legal responsibility for, 
and control of, its SRO responsibilities.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act\6\ in general, and furthers the objectives 
of sections 6(b)(1), 6(b)(6) and 6(b)(7) of the Act\7\ in particular, 
in that it will enhance the ability of the Exchange to enforce 
compliance by its members and persons associated with its members with 
the provisions of the Act, the rules and regulations thereunder, and 
the rules of the Exchange; it will help ensure that members and persons 
associated with members are appropriately disciplined for violations of 
the Act, the rules and regulations thereunder, and the rules of the 
Exchange; and it will provide a fair procedure for the disciplining of 
members and persons associated with members.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(1); 15 U.S.C. 78f(b)(6); and 15 U.S.C. 
78f(b)(7).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange 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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

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

    Because the proposed rule change: (i) Does not significantly affect 
the protection of investors or the public interest; (ii) does not 
impose any significant burden on competition; and (iii) by its terms, 
does not become operative for 30 days after the date of filing, or such 
shorter time as the Commission may designate, if consistent with the 
protection of investors and the public interest, the proposed rule 
change has become effective pursuant to section 19(b)(3)(A) of the 
Act\8\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\9\ The 
Exchange has requested that the Commission waive the 30-day operative 
delay period for ``non-controversial'' proposals and make the proposed 
rule change effective and operative upon filing. The Commission hereby 
grants the request. The Commission believes that waiver of the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. In this regard, the Commission believes that the 
proposal should be implemented without delay because of its immediate 
applicability with respect to the proposed ORSA plan.\10\ For this 
reason, the Commission designates the proposal to be effective and 
operative upon filing with the Commission.\11\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ The Commission notes that the proposed rule change is based 
on a similar rule of the Boston Stock Exchange, Inc. See Securities 
Exchange Act Release No. 53436 (March 7, 2006), 71 FR 13194 (March 
14, 2006) (SR-BSE-2006-08).
    \11\ For the purposes only of accelerating 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).
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    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 the 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 rule-comments@sec.gov. Please include 

File Number SR-CBOE-2006-46 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-2006-46. 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

[[Page 30009]]

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 available publicly. All 
submissions should refer to File Number SR-CBOE-2006-46 and should be 
submitted on or before June 14, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-7918 Filed 5-23-06; 8:45 am]

BILLING CODE 8010-01-P