Document ID: SEC-2008-0870-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2008-06-30T04:00Z

[Federal Register: June 30, 2008 (Volume 73, Number 126)]
[Notices]               
[Page 36936-36937]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30jn08-128]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57994; File No. SR-CBOE-2008-63]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Regarding Fees for the CBOE Stock Exchange

June 20, 2008.
    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 June 13, 2008, 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 substantially 
prepared by the Exchange. The Exchange filed the proposed rule change 
pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(2) 
thereunder,\4\ which renders 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\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 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 CBOE Stock Exchange (``CBSX'') Fees 
Schedule to include a CBSX Direct Connectivity Charge for a new 
facility of the Exchange that will enable CBOE Market-Makers to 
transmit orders directly to CBSX. The text of the proposed rule change 
is available at CBOE's principal office, the

[[Page 36937]]

Commission's Public Reference Room, and http://www.cboe.com.

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 
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
    CBSX is CBOE's stock trading facility. One of the aims of CBSX is 
to provide an effective and efficient platform for CBOE members to 
execute stock trades. This includes the hedging activity of CBOE option 
Market-Makers. Many CBOE option Market-Makers generate stock orders 
using systems from third-party technology providers that integrate 
options pricing and position management functions with functionality 
that generates stock orders for hedging purposes. The practice has 
typically been for these Market-Maker hedging orders to be routed to a 
stock broker for further routing to an exchange, including CBSX, or 
other venue for execution. To better facilitate the ability of CBOE 
Market-Makers to access CBSX, CBOE and CBSX are now making available to 
CBOE Market-Makers a direct connection between CBSX and the most 
prevalent of the market-making systems in use on CBOE that will enable 
the Market-Makers using that system to transmit stock orders directly 
to CBSX in their capacity as CBSX members.\5\ Similar to member 
connectivity fees charged by CBOE, CBSX is establishing a connectivity 
charge for members that desire to utilize this connection (and any 
similar connection that CBOE/CBSX may make available in the future) to 
directly route orders to CBSX. CBSX intends to charge $50 per calendar 
quarter; however, to promote usage, the fee will be waived through the 
first quarter of 2009.
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    \5\ Since CBSX is a facility of CBOE, CBOE members are eligible 
to trade on CBSX as ``members.''
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2. Statutory Basis
    The proposed rule change is consistent with the requirements of 
Section 6(b) of the Act,\6\ in general, and Section 6(b)(4) of the 
Act,\7\ 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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    \6\ 15 U.S.C. 78f(b).
    \7\ 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 the 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

    The foregoing proposed rule change is effective upon filing 
pursuant to Section 19(b)(3)(A)(ii) of the Act \8\ and Rule 19b-4(f)(2) 
thereunder,\9\ because it establishes or changes a due, fee, or other 
charge applicable only to a member imposed by the Exchange. 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 furtherance 
of the purposes of the Act.
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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 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-2008-63 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-2008-63. 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, on official business 
days between the hours of 10 a.m. and 3 p.m. Copies of such filing will 
also 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 No. SR-CBOE-
2008-63 and should be submitted on or before July 21, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-14761 Filed 6-27-08; 8:45 am]

BILLING CODE 8010-01-P