Document ID: SEC-2005-0339-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Chicago Board Options Exchange, Inc.
Posted Date: 2005-12-08T05:00Z

[Federal Register: December 8, 2005 (Volume 70, Number 235)]
[Notices]               
[Page 73042-73043]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08de05-115]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52871; File No. SR-CBOE-2005-88]

 
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 Transaction Fees 
and a Fee Waiver for Options on the Mini-SPX

December 1, 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 October 25, 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 and II below, which Items have been prepared by the Exchange. 
On December 1, 2005, the Exchange filed Amendment No. 1 to the proposed 
rule change.\3\ The CBOE submitted the proposed rule change under 
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, the Exchange proposed to reduce the XSP 
non-member market-maker transaction fee to $.17 per contract 
regardless of the premium.
    \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

    The Exchange proposes to amend its Fees Schedule to establish fees 
for options on the Mini-SPX (``XSP''). The Exchange also proposes to 
waive all fees for trading in XSP options beginning with the launch of 
trading through January 31, 2006. 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.

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 these statements may be examined at the places specified in 
Item IV below. The 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

a. XSP Fees

    The Exchange proposes to establish fees for XSP options, which 
commenced trading on October 25, 2005. XSP options are options that are 
based on one-tenth the value of the Standard & Poor's 500 Index. XSP 
options trade on CBOE's Hybrid 2.0 trading system.
    The transaction fee for customer orders in XSP options will be $.15 
per contract. The market-maker transaction fee will also be $.15 per 
contract.\6\ The Exchange believes the $.15 market-maker transaction 
fee will act as an incentive for market-makers to provide liquidity in 
the XSP product. Member firm proprietary transaction fees will be $.20 
for facilitation of customer orders and $.24 for non-facilitation 
orders. The broker-dealer transaction fee will be $.25 per contract, 
the remote market-maker transaction fee will be $.26 per contract, and 
the non-member market-maker fee will be $.17 per contract.
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    \6\ XSP options trade without a Designated Primary Market-Maker 
(``DPM''), Electronic-DPM (``e-DPM'') or Lead Market-Maker 
(``LMM''), under CBOE's index option hybrid rules.
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    As per the current CBOE Fee Schedule, the floor brokerage fee for 
XSP options will be $.04 per contract and $.02 per contract for crossed 
orders. The Marketing Fee and the RAES Access Fee will not apply.

b. Fee Waiver

    The Exchange proposes to waive all fees for trading in XSP options 
beginning with the launch of trading in XSP options through January 31, 
2006.

[[Page 73043]]

Following the fee waiver period, the Exchange will begin assessing the 
fees set forth above. The Exchange has decided to waive all XSP fees to 
promote the launch of the XSP product.
2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is 
consistent with Section 6(b) of the Act,\7\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act,\8\ in particular, in that 
it provides for the equitable allocation of reasonable dues, fees, and 
other charges among CBOE's members and other persons using its 
facilities.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change, as 
amended, 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 comments on the 
proposed rule change.

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

    The proposed rule change, as amended, has become effective upon 
filing pursuant to Section 19(b)(3)(A) of the Act \9\ and subparagraph 
(f)(2) of Rule 19b-4 thereunder,\10\ because it establishes or changes 
a due, fee, or other charge imposed by the CBOE. At any time within 60 
days of the filing of the proposed rule change, as amended, 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.\11\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(2).
    \11\ The effective date of the original proposed rule change is 
October 25, 2005 and the effective date of the amendment is December 
1, 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 1, 2005, the date on 
which the Exchange 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-2005-88 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-2005-88. 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 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-2005-88 and should be submitted on or before December 29, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
Jonathan G. Katz,
Secretary.
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    \12\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E5-7067 Filed 12-7-05; 8:45 am]

BILLING CODE 8010-01-P