Document ID: SEC-2006-0961-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Chicago Board Options Exchange, Inc.
Posted Date: 2006-07-27T04:00Z

[Federal Register: July 27, 2006 (Volume 71, Number 144)]
[Notices]               
[Page 42690-42691]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27jy06-87]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54184; File No. SR-CBOE-2006-66]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing of a Proposed Rule Change Regarding 
Market-Maker Appointments

July 20, 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 July 11, 2006, 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. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE proposes to amend CBOE Rule 8.3 relating to Market-Maker 
appointments. The text of the proposed rule change is available on the 
Exchange's Web site (http://www.cboe.com), at the CBOE'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 
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 Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant parts of such 
statements.

[[Page 42691]]

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 amend CBOE Rule 8.3 with respect to 
Market-Maker appointments. Currently, pursuant to CBOE Rule 8.1, a 
Market-Maker is by definition an individual (either a member or nominee 
of a member organization) who is registered with the Exchange for the 
purpose of making transactions as a dealer-specialist on the 
Exchange.\3\ Under CBOE Rule 8.3, an individual Market-Maker's 
appointment(s) are in the name of the Market-Maker even if the Market-
Maker is a nominee of a member organization or has registered the 
Market-Maker's membership for a member organization.
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    \3\ An RMM, on the other hand, can be either an individual 
member or a member organization. See CBOE Rule 8.4(a).
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    CBOE proposes to amend CBOE Rule 8.3 to provide that in the event a 
Market-Maker is a nominee of a member organization or has registered 
the Market-Maker's membership for a member organization, the member 
organization with which the Market-Maker is associated would be 
permitted to request that the Exchange deem all class appointments be 
made to the member organization instead of to the individual Market-
Maker. In such a case, if an individual Market-Maker were no longer 
associated with a member organization, the class appointments would 
continue to be held by the member organization and not the individual 
Market-Maker. A member organization, however, would not be required to 
make such a request. In the event a member organization did not request 
that the class appointments be held by the member organization, a 
Market-Maker's class appointments would continue to be held in the name 
of the individual Market-Maker and not the member organization with 
which the Market-Maker is associated.
    Additionally, CBOE proposes to amend CBOE Rule 8.3 to provide that 
if such a request is made by a member organization, CBOE would consider 
that the submission of electronic quotations and orders would be made 
by and on behalf of the member organization with which the individual 
Market-Maker is associated. However, CBOE Rule 8.3, as proposed to be 
amended, states that the individual Market-Maker would continue to have 
all of the obligations of a Market-Maker under Exchange rules in these 
circumstances.
    Finally, CBOE proposes to replace various references to 
``appropriate Market Performance Committee'' with the ``Exchange'' in 
CBOE Rule 8.3. Certain of these changes make the rule consistent with 
current practice and procedures. Additionally, CBOE would be permitted 
to continue to delegate to the appropriate Market Performance Committee 
various duties and responsibilities.
2. Statutory Basis
    CBOE believes the proposed rule change is consistent with the Act 
\4\ and the rules and regulations under the Act applicable to a 
national securities exchange and, in particular, the requirements of 
Section 6(b) of the Act.\5\ Specifically, the Exchange believes the 
proposed rule change is consistent with the Section 6(b)(5) \6\ 
requirements that the rules of an exchange be designed to remove 
impediments to and perfect the mechanism for a free and open market and 
a national market system, and, in general, to protect investors and the 
public interest.
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    \4\ 15 U.S.C. 78a et seq.
    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which CBOE consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-2006-66 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-2006-66. 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 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-2006-66 and should be submitted on or before August 
17, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-11983 Filed 7-26-06; 8:45 am]

BILLING CODE 8010-01-P