Document ID: SEC-2006-0014-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Chicago Board Options Exchange, Inc.
Posted Date: 2006-01-06T05:00Z

[Federal Register: January 6, 2006 (Volume 71, Number 4)]
[Notices]               
[Page 957-958]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06ja06-71]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53044; File No. SR-CBOE-2005-114]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change and Amendment No. 1 Thereto Relating to Extension of the 
Prospective Fee Reduction and DPM Linkage Fee Credit Programs

December 30, 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 16, 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 the 
Exchange. On December 22, 2005, CBOE filed Amendment No. 1 to the 
proposed rule change.\3\ CBOE has designated this proposal as one 
establishing or changing a due, fee, or other charge imposed by a self-
regulatory organization pursuant to Section 19(b)(3)(A) of the Act,\4\ 
and Rule 19b-4(f)(2) thereunder,\5\ which renders the proposal 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change, as 
amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, CBOE deleted all references to an 
extension of the Fixed Annual Fee Program.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 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 extend through January 
31, 2006 the Prospective Fee Reduction Program and the DPM Linkage Fees 
Credit Program. The text of the proposed rule change is available on 
CBOE's Web site, http://www.cboe.com, at 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, CBOE included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposal. 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to extend two Exchange-fee related programs 
through the end of January 2006: The Prospective Fee Reduction Program 
and the DPM Linkage Fees Credit Program.\6\ Each program is currently 
due to expire at the end of 2005. The Exchange has determined to extend 
each of these programs for an additional month because the Exchange's 
2006 budget is expected to be approved in January 2006.
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    \6\ See Sections 19 and 21 of the CBOE Fees Schedule, 
respectively.
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    Prospective Fee Reduction Program. The Exchange proposes to 
continue the Prospective Fee Reduction Program (``PFRP'') through 
January 31, 2006. No other changes to the PFRP are proposed. The 
current PFRP took effect on August 1, 2004.\7\ The PFRP is intended to 
reduce Market-Maker and DPM transaction fees in periods of high volume. 
The Exchange will determine as part of its annual budget review process 
whether the PFRP should be continued, modified or eliminated in the 
future. Any proposed changes to the PFRP would be filed with the 
Commission.
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    \7\ See Securities Exchange Act Release No. 50175 (August 10, 
2004), 69 FR 51129 (August 17, 2004) (SR-CBOE-2004-38). See also 
Securities Exchange Act Release No. 52111 (July 22, 2005), 70 FR 
43729 (July 28, 2005) (SR-CBOE-2005-52) (extension of PFRP through 
the end of 2005).
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    DPM Linkage Fees Credit Program. The Exchange proposes to continue 
the DPM Linkage Fees Credit Program (``Linkage Fees Credit'') through 
January 31, 2006. No other changes to the Linkage Fees Credit are 
proposed. The Linkage Fees Credit took effect on February 2, 2004 and 
was amended twice.\8\ The Linkage Fees Credit is a program that credits 
DPMs for transaction fees they incur related to the execution of 
outbound P/A orders, as defined in the Plan for the Purpose of Creating 
and Operating an Intermarket Option Linkage, to assist DPMs in 
offsetting the additional costs they incur in routing orders to other 
exchanges in order to obtain the National Best Bid or Offer. The 
Exchange will determine as part of its annual budget review process 
whether the Linkage Fees Credit should be continued, modified or 
eliminated in the future. Any proposed changes to the Linkage Fees 
Credit would be filed with the Commission.
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    \8\ See Securities Exchange Act Release Nos. 49341 (March 1, 
2004), 69 FR 10492 (March 5, 2004) (SR-CBOE-2004-08); 49769 (May 25, 
2004), 69 FR 31145 (June 2, 2004) (SR-CBOE-2004-13); and 52660 
(October 24, 2005), 70 FR 62355 (October 31, 2005) (SR-CBOE-2005-
80).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \9\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act \10\ in particular, in that it 
is designed to provide for the equitable allocation of reasonable dues, 
fees, and other charges among its members.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    CBOE believes that the proposed rule change would impose no 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 did not solicit or receive any written comments with respect 
to the proposal.

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

    The foregoing proposed rule change has been designated as a fee 
change pursuant to Section 19(b)(3)(A)(ii) of the Act \11\ and Rule 
19b-4(f)(2) \12\ thereunder. Accordingly, the proposal is effective 
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

[[Page 958]]

interest, for the protection of investors, or otherwise in furtherance 
of the purposes of the Act.\13\
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    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 17 CFR 240.19b-4(f)(2).
    \13\ The effective date of the original proposed rule change is 
December 16, 2005, and the effective date of Amendment No. 1 is 
December 22, 2005. For purposes of calculating the 60-day period 
within which the Commission may summarily abrogate the proposed rule 
change, as amended, under Section 19(b)(3)(C) of the Act, the 
Commission considers the period to commence on December 22, 2005, 
the date on which CBOE submitted Amendment No. 1. See 15 U.S.C. 
78s(b)(3)(C).
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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, as amended, 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-2005-114 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-2005-114. 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 available publicly. All submissions should refer to 
File Number SR-CBOE-2005-114 and should be submitted on or before 
January 27, 2006.
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    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
Jonathan G. Katz,
Secretary.
[FR Doc. E6-22 Filed 1-5-06; 8:45 am]

BILLING CODE 8010-01-P