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Notice

Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Granting Accelerated Approval to a Proposed Rule Change To Amend CBOE Rule 8.4 To Remove the Physical Trading Crowd Appointment Alternative for Remote Market-Makers and To Create an “A+” Tier Consisting of the Two Most Actively-Traded Products on the Exchange

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Information about this document as published in the Federal Register.

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This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble Start Printed Page 20952 April 14, 2005.

On March 15, 2005, the Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) [1] and Rule 19b-4 thereunder,[2] a proposed rule change to amend CBOE Rule 8.4(d) to remove the Physical Trading Crowd (“PTC”) appointment alternative for Remote Market-Makers (“RMMs”) and to create an “A+” Tier consisting of the two most actively-traded products on the Exchange.

The proposed rule change was published for comment in the Federal Register on March 21, 2005.[3] The Commission received no comments on the proposal.

The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange [4] and, in particular, the requirements of section 6 of the Act [5] and the rules and regulations thereunder. The Commission specifically finds that the proposed rule change is consistent with section 6(b)(5) of the Act [6] in that it is designed to promote just and equitable principles of trade, to remove impediments and to perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest.

The Commission finds good cause for approving the proposed rule change prior to the thirtieth day after the proposal is published for comment in the Federal Register pursuant to section 19(b)(2) of the Act.[7] The Commission believes that accelerating approval of the proposal is necessary to accommodate the rollout of CBOE's RMM program. In particular, the Commission notes that the proposal would enable CBOE to commence its RMM program with two of the most actively-traded products included, options on Standard & Poor's Depositary Receipts (Spiders) and options on the Nasdaq-100 Index Tracking Stock (QQQQs), under a new “A+” Tier designation. Furthermore, the Commission notes that the proposal would eliminate the PTC appointment option for RMMs and would require them to have a Virtual Trading Crowd appointment, which should allow them greater flexibility to choose their own appointments. The Commission therefore believes that accelerated approval of the proposed rule change is appropriate and finds that it is consistent with the Act.

It is therefore ordered, pursuant to section 19(b)(2) of the Act,[8] that the proposed rule change (SR-CBOE-2005-23) be approved.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[9]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  See Securities Exchange Act Release No. 51371 (March 15, 2005), 70 FR 13557.

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4.  In approving this proposed rule change, the Commission notes that it has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).

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[FR Doc. E5-1883 Filed 4-21-05; 8:45 am]

BILLING CODE 8010-01-P