Browse: Departments Dates Agencies
SECURITIES AND EXCHANGE COMMISSION
Securities and Exchange Commission
DOCUMENT ID: [Release No. 34-56927; File No. SR-CBOE-2007-145]
NOTICE: NOTICES
ACTION: Self-regulatory organizations; proposed rule changes:
SUBJECT CATEGORY: Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Exchange's Hybrid Electronic Quoting Fee
DOCUMENT SUMMARY: December 7, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b4 thereunder,\2\ notice is hereby given that
on November 30, 2007, 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. CBOE has designated this proposal as one
establishing or changing a due, fee, or other charge imposed by the
Exchange under Section 19(b)(3)(A),\3\ and Rule 19b4(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. \1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b4(f)(2).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
CBOE proposes to amend its Hybrid Electronic Quoting Fee. The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, and http://www.cboe.org/legal. II. SelfRegulatory 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.
CBOE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
[[Page 70913]]
A. SelfRegulatory Organization's Statement of the Purpose of, and 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, which is applicable to all MarketMakers, RMMs, DPMs and eDPMs (collectively ``liquidity providers'') in order to promote and encourage more efficient quoting.
Under the current fee, CBOE assesses all liquidity providers who
are submitting electronic quotations to the Exchange in Hybrid and
Hybrid 2.0 option classes a monthly fee of $450 per membership
utilized.\5\ CBOE also assesses or credits fees on liquidity providers
that vary depending on: (i) the quality of the liquidity providers'
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.\6\ The fee
varies slightly in ``high premium series'' \7\ with respect to Market
Makers and RMMs on the one hand, and DPMs and eDPMs on the other hand due to the difference in their quoting obligations.
\5\ See Securities Exchange Act Release No. 56602 (October 3, 2007), 72 FR 57620 (October 10, 2007) (SRCBOE2007116).
\6\ The value of the underlying security is the closing price of
the underlying security on the preceding trading day. The bid is the
closing bid in the option series at CBOE on the preceding trading day.
\7\ For purposes of this fee, ``high premium series'' are those
series in which the underlying security is less than or equal to
$100 and CBOE's bid is greater than $10, or those series in which
the underlying security is greater than $100 and CBOE's bid is greater than 15% of the underlying security.
CBOE believes that the quote mitigation strategies it has
implemented, including the Hybrid Electronic Quoting Fee, have been
effective in mitigating quotations. Some liquidity providers have
modified their quoting processes in response to the Hybrid Electronic
Quoting Fee. Accordingly, CBOE believes that it would be appropriate to
reduce slightly certain of the fees and, thus, reduce the total amount
of revenue that CBOE collects from the Hybrid Electronic Quoting Fee.
At the same time, CBOE believes that it would be beneficial to increase
the amounts that are credited for competitive quotations that improve
or match the NBBO, as an incentive to liquidity providers to submit
competitive quotations. Specifically, CBOE proposes to amend certain of
the fees that are imposed as part of the Hybrid Electronic Quoting Fee as follows:
The Exchange believes that the Hybrid Electronic Quoting Fee, as amended, is fair and reasonable and will continue to promote and encourage more competitive and efficient quoting and help to reduce quote traffic. The fee encourages and rewards liquidity providers that quote competitively, and imposes costs on liquidity providers that do not. CBOE intends to monitor the fee and may amend the fee in the future.
As before, the Hybrid Electronic Quoting Fee will be assessed by liquidity provider acronym. In the event a liquidity provider is utilizing more than one membership and submits electronic quotations for all of the memberships under the same acronym, the Hybrid Electronic Quoting Fee will be assessed per membership utilized by the liquidity provider. Because a liquidity provider's total credits cannot exceed the total debits assessed according to the schedule of credits and debits set forth in the two tables in Item 17 of the CBOE Fees Schedule, if the total credits were to exceed the total debits, the Hybrid Electronic Quoting Fee assessed to that liquidity provider would be $450.
If a liquidity provider is assessed the Hybrid Electronic Quoting Fee, the liquidity provider does not pay a member dues fee. The Exchange intends to implement this revised Hybrid Electronic Quoting Fee effective Monday, December 3, 2007.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\8\ in general, and furthers the objectives of Section 6(b)(4) of
the Act,\9\ 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.
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4).
B. SelfRegulatory 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. SelfRegulatory 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 rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \10\ and subparagraph (f)(2) of Rule 19b4
thereunder,\11\ since it establishes or changes a due, fee or other
charge imposed by the Exchange. 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 the furtherance of the purposes of the Act.
\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
\11\ 17 CFR 240.19b4(f)(2).
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
[[Page 70914]]
Paper Comments
All submissions should refer to File Number SRCBOE2007145. This file number should be included on the subject line if email 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. Copies of such filing also will be available for inspection and copying at the principal office 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 No. SRCBOE2007145 and should be submitted on or before January 3, 2008.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\12\
\12\ 17 CFR 200.303(a)(12).
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E724122 Filed 121207; 8:45 am]
BILLING CODE 801101P
SUMMARY: Chicago Board Options Exchange, Inc.,
DOCUMENT BODY 2: December 7, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b4 thereunder,\2\ notice is hereby given that
on November 30, 2007, 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. CBOE has designated this proposal as one
establishing or changing a due, fee, or other charge imposed by the
Exchange under Section 19(b)(3)(A),\3\ and Rule 19b4(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. \1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b4(f)(2).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
CBOE proposes to amend its Hybrid Electronic Quoting Fee. The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, and http://www.cboe.org/legal. II. SelfRegulatory 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.
CBOE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
[[Page 70913]]
A. SelfRegulatory Organization's Statement of the Purpose of, and 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, which is applicable to all MarketMakers, RMMs, DPMs and eDPMs (collectively ``liquidity providers'') in order to promote and encourage more efficient quoting.
Under the current fee, CBOE assesses all liquidity providers who
are submitting electronic quotations to the Exchange in Hybrid and
Hybrid 2.0 option classes a monthly fee of $450 per membership
utilized.\5\ CBOE also assesses or credits fees on liquidity providers
that vary depending on: (i) the quality of the liquidity providers'
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.\6\ The fee
varies slightly in ``high premium series'' \7\ with respect to Market
Makers and RMMs on the one hand, and DPMs and eDPMs on the other hand due to the difference in their quoting obligations.
\5\ See Securities Exchange Act Release No. 56602 (October 3, 2007), 72 FR 57620 (October 10, 2007) (SRCBOE2007116).
\6\ The value of the underlying security is the closing price of
the underlying security on the preceding trading day. The bid is the
closing bid in the option series at CBOE on the preceding trading day.
\7\ For purposes of this fee, ``high premium series'' are those
series in which the underlying security is less than or equal to
$100 and CBOE's bid is greater than $10, or those series in which
the underlying security is greater than $100 and CBOE's bid is greater than 15% of the underlying security.
CBOE believes that the quote mitigation strategies it has
implemented, including the Hybrid Electronic Quoting Fee, have been
effective in mitigating quotations. Some liquidity providers have
modified their quoting processes in response to the Hybrid Electronic
Quoting Fee. Accordingly, CBOE believes that it would be appropriate to
reduce slightly certain of the fees and, thus, reduce the total amount
of revenue that CBOE collects from the Hybrid Electronic Quoting Fee.
At the same time, CBOE believes that it would be beneficial to increase
the amounts that are credited for competitive quotations that improve
or match the NBBO, as an incentive to liquidity providers to submit
competitive quotations. Specifically, CBOE proposes to amend certain of
the fees that are imposed as part of the Hybrid Electronic Quoting Fee as follows:
The Exchange believes that the Hybrid Electronic Quoting Fee, as amended, is fair and reasonable and will continue to promote and encourage more competitive and efficient quoting and help to reduce quote traffic. The fee encourages and rewards liquidity providers that quote competitively, and imposes costs on liquidity providers that do not. CBOE intends to monitor the fee and may amend the fee in the future.
As before, the Hybrid Electronic Quoting Fee will be assessed by liquidity provider acronym. In the event a liquidity provider is utilizing more than one membership and submits electronic quotations for all of the memberships under the same acronym, the Hybrid Electronic Quoting Fee will be assessed per membership utilized by the liquidity provider. Because a liquidity provider's total credits cannot exceed the total debits assessed according to the schedule of credits and debits set forth in the two tables in Item 17 of the CBOE Fees Schedule, if the total credits were to exceed the total debits, the Hybrid Electronic Quoting Fee assessed to that liquidity provider would be $450.
If a liquidity provider is assessed the Hybrid Electronic Quoting Fee, the liquidity provider does not pay a member dues fee. The Exchange intends to implement this revised Hybrid Electronic Quoting Fee effective Monday, December 3, 2007.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\8\ in general, and furthers the objectives of Section 6(b)(4) of
the Act,\9\ 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.
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4).
B. SelfRegulatory 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. SelfRegulatory 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 rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \10\ and subparagraph (f)(2) of Rule 19b4
thereunder,\11\ since it establishes or changes a due, fee or other
charge imposed by the Exchange. 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 the furtherance of the purposes of the Act.
\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
\11\ 17 CFR 240.19b4(f)(2).
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
[[Page 70914]]
Paper Comments
All submissions should refer to File Number SRCBOE2007145. This file number should be included on the subject line if email 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. Copies of such filing also will be available for inspection and copying at the principal office 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 No. SRCBOE2007145 and should be submitted on or before January 3, 2008.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\12\
\12\ 17 CFR 200.303(a)(12).
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E724122 Filed 121207; 8:45 am]
BILLING CODE 801101P
Common CFR Searches
14 CFR Part 39 40 CFR Part 52 14 CFR Part 71 33 CFR Part 165 50 CFR Part 679 47 CFR Part 73 26 CFR Part 1 40 CFR Part 180 33 CFR Part 117 50 CFR Part 17 44 CFR Part 67 50 CFR Part 648 14 CFR Part 97 40 CFR Part 63 33 CFR Part 100 50 CFR Part 622 50 CFR Part 660 26 CFR Part 301 44 CFR Part 65 39 CFR Part 111 40 CFR Part 300 6 CFR Part 5 40 CFR Part 271 47 CFR Part 64 40 CFR Parts 52 and 81 50 CFR Part 665 10 CFR Part 50 44 CFR Part 64 49 CFR Part 571 39 CFR Part 3020