Document ID: SEC-2008-1276-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2008-09-18T04:00Z

[Federal Register: September 18, 2008 (Volume 73, Number 182)]
[Notices]               
[Page 54186-54188]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18se08-90]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58513; File No. SR-CBOE-2008-92]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to Hybrid Electronic Quoting Fee

September 11, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on August 29, 2008, the Chicago Board Options Exchange, 
Incorporated ( ``Exchange'' or ``CBOE'') filed with the Securities and 
Exchange Commission (the ``Commission'') the proposed rule change as 
described in Items I, II and III below, which Items have been prepared 
by the CBOE. The Commission is publishing this notice to solicit

[[Page 54187]]

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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE is proposing to amend its Hybrid Electronic Quoting Fee. 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 those 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 parts 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 purpose of this proposed rule change is to amend CBOE's Hybrid 
Electronic Quoting Fee (``Quoting Fee''), which is applicable to all 
Market-Makers, DPMs, and e-DPMs (collectively ``liquidity providers'') 
in order to promote and encourage more efficient quoting.
    Under the current Quoting Fee, CBOE assesses all liquidity 
providers who are submitting electronic quotations to CBOE in Hybrid 
option classes a monthly amount of $450 per membership utilized.\3\ 
CBOE also assesses or credits fees on liquidity providers that vary 
depending on: (i) the quality of the liquidity provider's quotation (a 
quotation is a bid and an offer); and (ii) the value of the underlying 
security and CBOE's bid in the option series. The Quoting Fee provides 
that a liquidity provider's total credits cannot exceed the total 
debits assessed. If the total credits were to exceed the total debits, 
the Quoting Fee assessed to that liquidity provider would be $450.
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    \3\ See Securities Exchange Act Release No. 34-56927 (12/7/07), 
72 FR 70912 (12/13/07), granting immediate effectiveness to SR-CBOE-
2007-145.
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    CBOE now proposes to amend the Quoting Fee and establish a cap of 
$50,000 on the amount a liquidity provider's total credits can exceed 
the total debits assessed. If the liquidity provider is a member 
organization utilizing more than one membership, the $50,000 cap is 
applied per member organization. CBOE believes that establishing a cap 
of $50,000 will serve as an incentive to liquidity providers to submit 
competitive quotations, and that the Quoting Fee will continue to 
promote and encourage more efficient quoting and help to reduce quote 
traffic.
    Additionally, CBOE proposes to make a technical change to Section 
17 and delete the reference to ``Hybrid 2.0,'' which CBOE recently 
deleted from its rules.\4\
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    \4\ See Securities Exchange Act Release No. 34-58153 (7/14/08), 
73 FR 41386 (7/18/08), granting immediate effectiveness to SR-CBOE-
2008-67.
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    The Exchange intends to implement this revised Quoting Fee 
effective September 1, 2008.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Securities Exchange Act of 1934 (``Act'') \5\, in 
general, and furthers the objectives of Section 6(b)(4) \6\ 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. In particular, CBOE believes the establishment of a $50,000 
cap on the amount a liquidity provider's total credits can exceed the 
total debits assessed is an equitable allocation of reasonable dues and 
fees in that it will serve as an incentive to liquidity providers to 
submit competitive quotations. CBOE also believes that the Quoting Fee 
will continue to promote and encourage more efficient quoting and help 
to reduce quote traffic.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 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 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 neither solicited nor received comments on the 
proposal.

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) of the Act \7\ and subparagraph (f)(2) of Rule 19b-4 \8\ 
thereunder. At any time within 60 days of the filing of such 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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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 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-2008-92 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

    All submissions should refer to File Number SR-CBOE-2008-92. 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, 100 F Street, 
NE., Washington, DC 20549, on official business days between the hours 
of 10 a.m. and 3 p.m.

[[Page 54188]]

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-2008-92 and should be submitted on 
or before October 9, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-21759 Filed 9-17-08; 8:45 am]

BILLING CODE 8010-01-P