[Federal Register Volume 70, Number 16 (Wednesday, January 26, 2005)]
[Notices]
[Pages 3757-3758]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-282]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51052; File No. SR-CBOE-2005-05]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Board Options 
Exchange, Inc., Amending Its Marketing Fee

January 18, 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 January 10, 2005, the Chicago Board Options Exchange, Inc., 
(``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 CBOE. 
The CBOE has designated this proposal as one establishing or changing a 
due, fee, or other charge imposed by the CBOE under section 
19(b)(3)(A)(ii) 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)(ii).
    \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

    The CBOE proposes to amend its marketing fee to assess a fee on 
options on Standard & Poor's Depositary Receipts (``SPDRs[reg]'') 
involving transactions of Market-Makers (including Designated Primary 
Market-Makers, or DPMs, and electronic Designated Primary Market-
Makers, or e-DPMs) other than Market-Maker-to-Market-Maker 
transactions. The fee will be imposed at the rate of $.22 per contract. 
Below is the text of the proposed rule change. Proposed new language is 
italicized; proposed deletions are in [brackets].

Chicago Board Options Exchange, Inc.

Fee Schedule

    1.-4. No change.
Notes:
    (1)-(5) No change.
    (6) The Marketing Fee will be assessed only on transactions of 
Market-Makers, e-DPMs and DPMs at the rate of $.22 per contract on 
all classes of equity options, options on HOLDRs, and options on 
SPDRs. [other than] The fee will not apply to Market-Maker-to-
Market-Maker transactions. This fee shall not apply to index options 
and options on ETFs (other than options on SPDRs). [The fee shall 
apply to options on HOLDRs.] Should any surplus of the marketing 
fees at the end of each month occur, those funds would be carried 
forward to the following month. The Exchange would then refund such 
surplus at the end of the quarter, if any, on a pro rata basis based 
upon contributions made by the Market-Makers, e-DPMs and DPMs.
    (7)-(14) No change.
* * * * *

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 its proposal and discussed any 
comments it had received regarding the proposal. 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
    On October 29, 2004, the CBOE amended its marketing fee program.\5\ 
The current marketing fee is assessed upon DPMs, e-DPMs, and Market-
Makers at a rate of $0.22 for every contract they enter into on the 
Exchange, other than Market-Maker-to-Market-Maker transactions, 
including all transaction between any combination of DPMs, e-DPMs, and 
Market-Makers.\6\ Currently, the marketing fee is assessed in all 
equity option classes and options on HOLDRs.\7\ The Exchange proposes 
to amend its marketing fee to also apply to options on SPDRs (ticker 
symbol ``SPY''), an Exchange Traded Fund (``ETF'').\8\ This fee shall 
not apply to index options and options on ETFs (other than options on 
SPDRs). The Exchange states that it is not making any other changes to 
its marketing fee.
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    \5\ See Securities Exchange Act Release No. 50736 (November 24, 
2004), 69 FR 69966 (December 1, 2004) (SR-CBOE-2004-68) (``Release 
No. 34-50736'').
    \6\ See Release No. 34-50736 for a more detailed description of 
the CBOE's marketing fee program.
    \7\ HOLDRs are trust-issued receipts that represent an 
investor's beneficial ownership of a specified group of stocks. See 
Interpretation .07 to CBOE Rule 5.3.
    \8\ ETFs are shares of trusts that hold portfolios of stocks 
designed to closely track the price performance and yield of 
specific indices.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act \9\ in general, and furthers the 
objectives of section 6(b)(4) of the Act \10\ in particular, in that it 
is designed to provide for the equitable allocation of reasonable dues, 
fees, and other charges among the CBOE's members.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 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 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 CBOE neither solicited nor received written comments with 
respect to the proposed rule change.

[[Page 3758]]

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

    Because the foregoing rule change establishes or changes a due, 
fee, or other charge imposed by the Exchange, it has become effective 
pursuant to section 19(b)(3)(A)(ii) of the Act \11\ and subparagraph 
(f)(2) of Rule 19b-4 thereunder.\12\ Accordingly, the proposal will 
take effect upon filing with the Commission. 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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    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 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 [email protected]. Please include 
File Number SR-CBOE-2005-05 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.

All submissions should refer to File Number SR-CBOE-2005-05. 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 the 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-2005-05 and should be submitted on or before February 16, 2005.
    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland,
Deputy Secretary.
 [FR Doc. E5-282 Filed 1-25-05; 8:45 am]
BILLING CODE 8010-01-P