February 4, 2005
Exchange
Bulletin
Volume 33, Number 5
The Constitution and Rules of the Chicago Options Exchange, Incorporated (“Exchange”), in certain specific instances, require
the Exchange to provide notice to the Exchange membership. To satisfy this requirement, a complimentary copy of the Exchange Bulletin, including the Regulatory Bulletin, is delivered to all effective members on a weekly basis.
CBOE members are encouraged to receive the Exchange and Regulatory Bulletin and Information Circulars via e-mail. E-mail
subscriptions may be obtained by submitting your name, firm, mailing address, e-mail address, and phone number, to
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delivery of the Exchange and Regulatory Bulletin or for Information Circulars. If you do sign up for e-mail delivery, please
remember to inform the Membership Department of e-mail address changes.
Additional subscriptions for hard copy delivery may be obtained by submitting your name, firm, mailing address, e-mail address and telephone number to: Chicago Board Options Exchange, Accounting Department, 400 South LaSalle, Chicago, Illinois 60605, Attention: Bulletin Subscriptions. The cost of an annual subscription (July 1 through June 30) is $200.00 ($100.00
after January 1), payable in advance. The Exchange reserves the right to limit subscriptions by non-members.
For up-to-date Seat Market Quotes, refer to CBOE.com and click “Seat Market Information” under the “About CBOE” tab. For
access to the CBOE Member Web Site, please also notify the Membership Department using the contact information above.
Copyright © 2004 Chicago Board Options Exchange, Incorporated
SEAT MARKET QUOTES AS OF FRIDAY, FEBRUARY 4, 2005
CLASS
CBOE/FULL
CBOT/FULL
BID
$295,000.00
$1,150,000.00
OFFER
$335,000.00
$1,220,000.00
LAST SALE AMOUNT
$320,000.00
$1,150,000.00
LAST SALE DATE
February 2, 2005
February 1, 2005
MEMBERSHIP SALES AND TRANSFERS
From
Larkspur Securities, Inc.
Pershing LLC
Pershing LLC
To
Red Cedar Trading LLC
Citadel Derivatives Group LLC
Citadel Derivatives Group LLC
Price/Transfer
$320,000.00
$320,000.00
$320,000.00
Date
1/28/05
2/2/05
2/2/05
Page 2
February 4, 2005
Volume 33, Number 5
Chicago Board Options Exchange
MEMBERSHIP INFORMATION FOR 1/27/05 THROUGH 2/2/05
MEMBERSHIPAPPLICATIONS RECEIVED FOR
WHICH A POSTING PERIOD IS REQUIRED
Member Organization Applicants
Date Posted
EWT, LLC
1/28/05
Rodney A. Faragalla, Nominee
345 N. Maple Dr., Ste. 205
Beverly Hills, CA 90210
Rodney A. Faragalla – President
Peter J. Kovac - Chief Operations Officer
David B. Salomon - Managing Member/CEO
Vincent J. Viola - Member
Equitec Compass LLC
1/27/05
Richard L. Graziadei, Nominee
111 W. Jackson, 20th Floor
Chicago, IL 60604
Equitec Group LLC – Member
Dansu Inc. – Member
Daniel B. Asher – President
LaRocque Trading Inc. – Member
John L. LaRocque – President
Fred O. Goldman - Chief Financial Officer
Joseph M. Jogmen – Administrator
William J. Shimanek - Compliance Officer
MEMBERSHIP LEASES
Effective Date
Lessor: Gail S. Meyers
Lessee: Israel A. Englander & Co., Inc.
Robert S. Sittloh, NOMINEE
Rate:
0.875%
Term: Monthly
2/1/05
Lessor: Richard E. Sims
Lessee: Kevin J. Thomas
Rate:
0.625%
Term: Monthly
2/1/05
Lessor: Citigroup Global Markets Inc.
Lessee: Citigroup Derivatives Markets Inc.
Brian R. Tobin, NOMINEE
Rate:
0.875%
Term: Monthly
2/1/05
Lessor: Sallie Leaf
Lessee: Westward Capital LLC
Brian A. Zielinski, NOMINEE
Rate:
0.8609%
Term: Monthly
2/1/05
Lessor: Citigroup Global Markets Inc.
Lessee: Citigroup Derivatives Markets Inc.
Rate:
0.875%
Term: Monthly
2/1/05
Lessor: Daniel A. Stucka
2/1/05
Lessee: X-Change Financial Access LLC
William G. Hohenadel Jr., NOMINEE
Rate:
0.875%
Term: Monthly
2/1/05
1/31/05
Lessor: Citigroup Global Markets Inc.
Lessee: Citigroup Derivatives Markets Inc.
Rate:
0.875%
Term: Monthly
2/1/05
Lessor: Steven V. Taitel
Lessee: Geneva Capital Investments LLC
Jonathon Coe, NOMINEE
Rate:
$2,000
Term: Monthly
2/1/05
Lessor: Citigroup Global Markets Inc.
Lessee: Citigroup Derivatives Markets Inc.
Rate:
0.875%
Term: Monthly
Lessor: Larkspur Securities, Inc.
Lessee: Raymond P. Dempsey Inc.
Thomas G. Weston, NOMINEE
Rate:
0.625%
Term: Monthly
2/1/05
Lessor: Edmund Leff Family Ltd. Partnership 2/1/05
Lessee: Cutler Group, LP
Bradley P. Anderson, NOMINEE
Rate:
0.875%
Term: Monthly
2/1/05
Lessor: Arnold B. And Sima H. Miller
Lessee: TJM Investments, LLC
Matthew S. Heyn, NOMINEE
Rate:
0.875%
Term: Monthly
2/1/05
Lessor: Pershing LLC
Lessee: Westward Capital LLC
Jeffrey S. Dalton, NOMINEE
Rate:
0.8609%
Term: Monthly
2/1/05
Lessor: JWG, Inc.
Lessee: X-Change Financial Access LLC
Jean R. Hanrahan, NOMINEE
Rate:
0.875%
Term: Monthly
2/1/05
Lessor: CMCJL, LLC
Lessee: RightSide Trading LP
Lincoln W. Brewer, NOMINEE
Rate:
$2,300
Term: Monthly
2/1/05
Lessor: Malachi J. Flanagan
Lessee: J.T. Limited Partnership
Thomas A. Hamilton Jr., NOMINEE
Rate:
0.75%
Term: Monthly
2/1/05
Lessor: John J. Conklin
Lessee: RightSide Trading LP
Timothy E. Starsia, NOMINEE
Rate:
$2,300
Term: Monthly
2/1/05
Lessor: CCD #1, Inc.
Lessee: Arctic Trading, LLC
Richard M. Coplan, NOMINEE
Rate:
$2,100
Term: Monthly
2/1/05
Lessor: Harry A. Brandt
Lessee: RightSide Trading LP
Kenneth E. Kwalik, NOMINEE
Rate:
$2,300
Term: Monthly
Lessor:
2/1/05
Lessor: Alan G. Barsumian
Lessee: TJM Investments, LLC
Robert M. Bleser, NOMINEE
Rate:
0.875%
Term: Monthly
2/1/05
Merrill Lynch Professional
Clearing Corp.
Lessee: Citigroup Derivatives Markets Inc.
Rate:
0.875%
Term: Monthly
Lessor: Citigroup Global Markets Inc.
Lessee: Citigroup Derivatives Markets Inc.
Rate:
0.875%
Term: Monthly
2/1/05
Lessor: Donald I. Goldstein
Lessee: AB Financial LLC
Thomas P. Tiernan, NOMINEE
Rate:
0.875%
Term: Monthly
2/1/05
New Leases
Effective Date
Lessor: Daniel A. Stucka
Lessee: Edward H. Brown III
Rate:
$1.00
Term: One Day
Page 3
February 4, 2005
Volume 33, Number 5
Chicago Board Options Exchange
*************Correction to Bulletin Dated 1/14/05************
Effective Date
Lessor: William B. Edmiston
Lessee: KC-Co. II LLC
Michael R. Quaid, NOMINEE
Rate:
0.8920%
Term: 17 Days
1/6/05
Terminated Leases
Termination Date
Lessor: Marshall C. Spiegel
Lessee: Hurricane Capital, LLC
Stephen K. Fox (FOX), NOMINEE
1/27/05
Lessor: Citigroup Global Markets Inc.
Lessee: TJM Investments, LLC
Matthew S. Heyn (HEY), NOMINEE
2/1/05
Lessor: Citigroup Global Markets Inc.
Lessee: X-Change Financial Access LLC
Jean R. Hanrahan (HNY), NOMINEE
2/1/05
Lessor: Malachi J. Flanagan
Lessee: Thomas A. Hamilton Jr. (HMI)
2/1/05
Lessor: Larkspur Securities, Inc.
Lessee: Terry Trading, LLC
Randy S. Terry (RND), NOMINEE
2/1/05
Lessor: Stephens Options
Lessee: Wks Incorporated
William K. Sutton (WIL), NOMINEE
2/1/05
Termination Date
Lessor: Citigroup Global Markets Inc.
2/1/05
Lessee: Raymond P. Dempsey Inc.
Thomas G. Weston (WES), NOMINEE
Lessor:
Merrill Lynch Professional
Clearing Corp.
Lessee: Cutler Group, LP
2/1/05
Lessor: X-Change Financial Access LLC
Lessee: Citadel Derivatives Group LLC
2/2/05
MEMBERSHIP TERMINATIONS
Individual Members
CBT Registered For:
Termination Date
James C. Sauser (JYM)
Cutler Group, LP
440 S. LaSalle - Ste. 1124
Chicago, IL 60605
2/1/05
Nathan R. Stuckey (CHE)
Stuckey LLC
440 S. LaSalle - Ste. 618
Chicago, IL 60605
2/1/05
Craig J. Anderson (CJA)
Sunset Securities LLC
440 S. LaSalle, Suite 2101
Chicago, IL 60605
2/1/05
Lessor: Marc I. Beilinson
2/1/05
Lessee: Panos Trading Limited Partnership
Francesco Spinnato (SPT), NOMINEE
Nominee(s) / Inactive Nominee(s):
Termination Date
Lessor: Richard E. Sims
Lessee: Wolverine Trading LLC
2/1/05
1/27/05
Lessor: Christopher M. Wheaton Inc.
Lessee: SLK-Hull Derivatives LLC
2/1/05
Michael R. Quaid (NFC)
KC-Co. II LLC
10 S. LaSalle St., Ste. 2300
Chicago, IL 60603
1/27/05
Lessor: Daniel A. Stucka
Lessee: Edward H. Brown III (NED)
2/1/05
Eric Johnson (EJN)
CMZ Trading, LLC
141 W. Jackson - Ste. 3310
Chicago, IL 60604
Lessor: William B. Edmiston
Lessee: KC-Co. II LLC
Mark R. Koenig (KOE), NOMINEE
2/1/05
1/27/05
Lessor: G-Bar Limited Partnership
Lessee: AB Financial LLC
Thomas P. Tiernan (TJT), NOMINEE
2/1/05
Stephen K. Fox (FOX)
Hurricane Capital, LLC
5 Greenwood Drive
New City, NY 10956
1/31/05
Lessor: Citigroup Global Markets Inc.
Lessee: TJM Investments, LLC
Robert M. Bleser (RAT), NOMINEE
2/1/05
Ryan P. Carey (RPC)
Tradelink LLC
200 W. Jackson Blvd., Ste. #2300
Chicago, IL 60606
1/31/05
Lessor: Donald I. Goldstein
Lessee: First Derivative Traders, LP
James B. Burns (JBZ), NOMINEE
2/1/05
Edward M. Giangiorgi (EGI)
KC-Co. II LLC
10 S LaSalle, Ste. 2300
Chicago, IL 60603
Lessor: Larkspur Securities, Inc.
Lessee: Kevin J. Thomas (KTO)
2/1/05
Thomas D. Tracy (TRC)
Equitec Proprietary Markets, LLC
440 S. LaSalle, #1124
Chicago, IL 60605
1/31/05
James R. Bokowski (JBO)
TD Options, LLC
230 S. LaSalle - Ste. 688
Chicago, IL 60604
1/31/05
Alan M. Sartin (MVS)
Cornerstone Partners
440 S. LaSalle - 19th Floor
Chicago, IL 60605
2/1/05
Lessor: Ruth I. Kahn
2/1/05
Lessee: G-Bar Limited Partnership
Anthony J. Carone (AJC), NOMINEE
Lessor: Citigroup Global Markets Inc.
2/1/05
Lessee: X-Change Financial Access LLC
William G. Hohenadel Jr. (WGH), NOMINEE
Lessor: Pershing LLC
Lessee: Ronin Capital, LLC
Jeffrey S. Dalton (DTN), NOMINEE
2/1/05
Page 4
February 4, 2005
Volume 33, Number 5
Termination Date
William K. Sutton (WIL)
Wks Incorporated
440 S. LaSalle - Ste. 1822
Chicago, IL 60605
2/1/05
Francesco Spinnato (SPT)
Panos Trading Limited Partnership
440 S. LaSalle - Ste. 743
Chicago, IL 60605
2/1/05
Randy S. Terry (RND)
Terry Trading, LLC
990 N. Lake Shore Dr., 6d
Chicago, IL 60611
2/1/05
Mark R. Koenig (KOE)
KC-Co. II LLC
10 S. LaSalle, Ste. 2300
Chicago, IL 60603
2/1/05
Member Organizations
CBT Registered For:
Termination Date
Stuckey LLC
440 S. LaSalle - Ste. 618
Chicago, IL 60605
2/1/05
Lessee(s):
Termination Date
Terry Trading, LLC
990 N. Lakeshore Drive, 6-D
Chicago, IL 60611
2/1/05
WKS Incorporated
440 S. LaSalle - Ste. 1822
Chicago, IL 60605
2/1/05
Individual Members
Effective Date
Robert Baxter (BXT)
1/28/05
Baxter Trading LLC
440 S. LaSalle, Ste., #1822
Chicago, IL 60605
Type of Business to be Conducted: Market Maker
Scotlond T. Ernsting (KBC)
1/31/05
Susquehanna Investment Group
32 W. 230 83rd St.
Naperville, IL 60564
Type of Business to be Conducted: Market Maker/Floor Broker
Nominee(s) / Inactive Nominee(s):
Effective Date
Dann C. Hansen (DXH)
1/28/05
TD Professional Execution Inc.
230 S. LaSalle St., Ste. 688
Chicago, IL 60604
Type of Business to be Conducted: Market Maker/Floor Broker
Mark R. Koenig (KOE)
1/31/05
KC-Co. II LLC
10 S. LaSalle, Ste. 2300
Chicago, IL 60603
Type of Business to be Conducted: Market Maker
Richard D. Gueren (RDG)
2/1/05
Morgan Stanley DW Inc.
1585 Broadway, 11th Floor
New York, NY 10036
Type of Business to be Conducted: Floor Broker
Brian A. Zielinski (BZN)
2/1/05
Westward Capital LLC
311 S. Wacker
Chicago, IL 60605
Type of Business to be Conducted: Market Maker
Jeffery I. Fried (FRE)
2/1/05
Red Cedar Trading LLC
811 Summer Ct.
Buffalo Grove, IL 60089
Type of Business to be Conducted: Market Maker/Floor Broker
William Ulivieri (YEA)
2/1/05
Equitec Proprietary Markets, LLC
111 W. Jackson - 20th Fl.
Chicago, IL 60604
Type of Business to be Conducted: Market Maker/Floor Broker
Robert S. Sittloh (CHF)
2/1/05
Israel A. Englander & Co.,Inc.
440 S. LaSalle - Ste. 1124
Chicago, IL 60605
Type of Business to be Conducted: Floor Broker
EFFECTIVE MEMBERSHIPS
CBT Registered For:
Chicago Board Options Exchange
Effective Date
James M. Jacobsen (JAM)
1/27/05
Citadel Derivatives Group LLC
131 S. Dearborn, 37th Fl.
Chicago, IL 60603
Type of Business to be Conducted: Market Maker
Scott W. Connor (SWC)
1/27/05
Citadel Derivatives Group LLC
131 S. Dearborn, 37th Fl.
Chicago, IL 60603
Type of Business to be Conducted: Market Maker
Edward M. Giangiorgi (EGI)
1/27/05
KC-Co. II LLC
10 S. LaSalle, Ste. 2300
Chicago, IL 60603
Type of Business to be Conducted: Market Maker
Brian E. Salomon (BST)
2/1/05
Everest Trading, LLC
440 S. LaSalle - Ste. 3100
Chicago, IL 60605
Type of Business to be Conducted: Market Maker
Lincoln W. Brewer (LBW)
2/1/05
RightSide Trading LP
440 S. LaSalle, Ste. #2101
Chicago, IL 60605
Type of Business to be Conducted: Market Maker
Timothy E. Starsia (UVA)
2/1/05
RightSide Trading LP
26 W. 441 Pinehurst Drive
Winfield, IL 60190
Type of Business to be Conducted: Market Maker
Kenneth E. Kwalik (KLK)
2/1/05
RightSide Trading LP
440 S. LaSalle Street, Ste. 2101
Chicago, IL 60605
Type of Business to be Conducted: Market Maker
Jeffrey W. Schneider (HEX)
2/1/05
Third Millennium Trading, LLC
440 S. LaSalle - Ste. 3100
Chicago, IL 60605
Type of Business to be Conducted: Market Maker
Page 5
February 4, 2005
Volume 33, Number 5
Member Organizations
CBT Registered For:
Effective Date
Baxter Trading LLC
1/28/05
440 S. LaSalle, Ste. #1822
Chicago, IL 60605
Type of Business to be Conducted: Market Maker
Lessee(s):
Effective Date
RightSide Trading LP
2/1/05
440 S. LaSalle - Suite 2101
Chicago, IL 60605
Type of Business to be Conducted: Market Maker/Floor Broker
JOINT ACCOUNTS
New Participants
Acronym
Effective Date
Daniel H. Frailey
QLO
1/27/05
Brian J. Saldeen
QEW
1/28/05
Brian J. Saldeen
QJY
1/28/05
Brian J. Saldeen
QMD
1/28/05
Brian J. Saldeen
QNA
1/28/05
Brian J. Saldeen
QPO
1/28/05
Brian J. Saldeen
QUT
1/28/05
Brian J. Saldeen
QVA
1/28/05
Brian J. Saldeen
QYH
1/28/05
Brian J. Saldeen
QYS
1/28/05
Patrick Brice
QNZ
1/28/05
Patrick Brice
QDD
1/28/05
Patrick Brice
QDX
1/28/05
Michael P. King
QNZ
1/28/05
Michael P. King
QDX
1/28/05
Scott R. Southwood
QGK
1/28/05
Scotlond T. Ernsting
QGS
1/31/05
Jeffrey J. Kupets
QMM
1/31/05
Jonathon Coe
QAV
2/1/05
Daniel H. Frailey
QIG
2/1/05
Daniel H. Frailey
QPX
2/1/05
Scott Trigg Thorstenson
QAG
2/1/05
Brian E. Salomon
QAZ
2/1/05
Kevin M. Scanlan
QBB
2/2/05
New Accounts
Acronym
Effective Date
Peter J. Meyer
QMW
2/1/05
Jeffrey S. Dalton
QMW
2/1/05
Brian A. Zielinski
QMW
2/1/05
Chicago Board Options Exchange
New Accounts
Acronym
Effective Date
Lincoln W. Brewer
QQR
2/1/05
Kenneth E. Kwalik
QQR
2/1/05
Timothy E. Starsia
QQR
2/1/05
Terminated Participants Acronym
Termination Date
Michael R. Quaid
QII
1/27/05
Michael R. Quaid
QQD
1/27/05
Michael R. Quaid
QVK
1/27/05
Eric Johnson
QWQ
1/27/05
James R. Bokowski
QRX
1/31/05
James R. Bokowski
QBB
1/31/05
James R. Bokowski
QWJ
1/31/05
Alan M. Sartin
QMV
2/1/05
Francesco Spinnato
QTF
2/1/05
Francesco Spinnato
QVV
2/1/05
Jeffrey S. Dalton
QAX
2/1/05
Jeffrey S. Dalton
QCD
2/1/05
Jeffrey S. Dalton
QRH
2/1/05
Jeffrey S. Dalton
QSP
2/1/05
Jeffrey S. Dalton
QTJ
2/1/05
Terminated Accounts
Acronym
Termination Date
Ryan P. Carey
QDO
1/31/05
David C. Adent
QBD
1/31/05
Joshua David Aling
QBD
1/31/05
Jonathan M. Costello
QBD
1/31/05
Gavin M. Lowrey
QBD
1/31/05
Jonathan S. Okman
QBD
1/31/05
Neel Shah
QBD
1/31/05
John E. Smollen Jr.
QBD
1/31/05
Michael J. Smollen
QBD
1/31/05
Timothy M. Sommerfield
QBD
1/31/05
John H. Waterfield III
QBD
1/31/05
Jayme A. Demes
QBD
1/31/05
David Piotrowski
QBD
1/31/05
Nicole R. Sanders
QBD
1/31/05
Vishal Savla
QBD
1/31/05
Page 6
February 4, 2005
Volume 33, Number 5
Chicago Board Options Exchange
CHANGES IN MEMBERSHIP STATUS
Individual Members
Effective Date
Edward J. Barry Jr.
1/28/05
From:
Nominee For TD Professional Execution Inc.; Market
Maker/Floor Broker
To:
Nominee For TD Options, LLC; Market Maker/Floor
Broker
Jeffrey J. Kupets
1/31/05
From:
CBT Exerciser; Market Maker
To:
CBT Registered For Mustang Trading, LLC; Market
Maker
Edward J. Barry Jr.
1/31/05
From:
Nominee For TD Options, LLC; Market Maker/Floor
Broker
To:
Nominee For TD Professional Execution Inc.; Floor
Broker
Edward H. Brown III
From:
Lessor
To:
Lessee/ Lessor; No Floor Functions
1/31/05
Thomas A. Hamilton Jr.
2/1/05
From:
Lessee; Market Maker
To:
Nominee For JT Limited Partnership; Market Maker
Jeffrey S. Dalton
2/1/05
From:
Nominee For Ronin Capital, LLC; Market Maker
To:
Nominee For Westward Capital LLC; Market Maker
David W. Silvester
2/1/05
From:
CBT Registered For Wellington Capital Markets, LLC;
Market Maker
To:
Nominee For Wellington Capital Markets, LLC; Market
Maker
Richard M. Coplan
2/1/05
From:
CBT Registered For Arctic Trading, LLC; Market Maker
To:
Nominee For Arctic Trading, LLC; Market Maker
Edward H. Brown III
From:
Lessee/ Lessor; No Floor Functions
To:
Lessor
2/1/05
Kevin M. Scanlan
2/2/05
From:
Lessor
To:
Lessor/ Nominee For TD Options, LLC; Market Maker/
Floor Broker
Paul K. Suvak
2/2/05
From:
Nominee For PKS Trading LLC; Market Maker
To:
Nominee For PKS Trading LLC; No Floor Functions
Effective Date
Chad R. Gramann
From:
CBT Individual; Market Maker
To:
CBT Individual; No Floor Functions
2/2/05
Member Organizations
Effective Date
X-Change Financial Access LLC
2/1/05
From:
Lessor/ Owner/ Lessee/ Member Organization Affiliated
with a CBT Registered For; Associated with a Floor
Broker
To:
Owner/ Lessee/ Member Organization Affiliated with a
CBT Registered For; Associated with a Floor Broker
Wellington Capital Markets, LLC
2/1/05
From:
Lessee/ Member Organization Affiliated with a CBT
Registered For; Associated with a Market Maker
To:
Lessee; Associated with a Market Maker
Westward Capital LLC
2/1/05
From:
Member Organization Affiliated with a CBT Registered
For; Associated with a Market Maker
To:
Lessee/ Member Organization Affiliated with a CBT
Registered For; Associated with a Market Maker
G-Bar Limited Partnership
2/1/05
From:
Lessor/ Lessee/ Member Organization Affiliated with a
CBT Registered For; Associated with a Market Maker/
Floor Broker
To:
Owner/ Lessee/ Member Organization Affiliated with a
CBT Registered For; Associated with a Market Maker/
Floor Broker
Arctic Trading, LLC
2/1/05
From:
Member Organization Affiliated with a CBT Registered
For; Associated with a Market Maker
To:
Lessee; Associated with a Market Maker
Morgan Stanley DW Inc.
2/1/05
From:
Lessor/ Non-Member Customer Business
To:
Owner/ Non-Member Customer Business; Associated
with a Floor Broker
Mustang Trading, LLC
1/31/05
From:
Lessee; Associated with a Market Maker
To:
Lessee/ Member Organization Affiliated with a CBT
Registered For; Associated with a Market Maker
MEMBER ADDRESS CHANGES
Individual Members
Effective Date
Carl M. Peller
1 E. Deleware - #2505
Chicago, IL 60611
1/28/05
Matt Carr
440 S. LaSalle - Ste. 3100
Chicago, IL 60605
1/31/05
Member Organizations
Effective Date
Bear Stearns Securities Corp
383 Madison Avenue
New York, NY 10179
1/31/05
Fabulous Texan Partners
c/o Pekin Singer Strauss
21 S. Clark St., Suite 3325
Chicago, IL 60603
2/2/05
Page 7
February 4, 2005
Volume 33, Number 5
Chicago Board Options Exchange
POSITION LIMIT CIRCULARS
Pursuant to Exchange Rule 4.11, the Exchange issued the below listed Position Limit Circulars between January 28 and January 31, 2005. The
complete circulars are available from the Department of Market Regulation, in the data information bins on the 2nd Floor of the Exchange, and on the
CBOE website at cboe.com under the “Market Data” tab.
To receive regular updates of the position limit list via fax, contact Candice Nickrand at (312) 786-7730. Questions concerning position and exercise
limits may be directed to the Department of Market Regulation to Rich Pedraza at (312) 786-7077 or Tim Mac Donald at (312) 786-7706.
Position Limit Circular PL05-05
January 28, 2005
Equity Position and Exercise Limits will be
decreased to a Lower Tier Limit Effective
February 22, 2005
Position Limit Circular PL05-06
January 28, 2005
Adjusted Position and Exercise Limits for
certain Equity Option Classes will revert to
their Applicable Standard Position and Exercise
Limits effective February 22, 2005
Position Limit Circular PL05-07
January 31, 2005
First Health Group Corp. (“FHCC/FHQ”) merger
completed withCoventry Merger Sub, Inc., a wholly
owned subsidiary of Coventry Health Care, Inc.
(“CVH/WJU/OVB”)
Effective Date January 31, 2005
RESEARCH CIRCULARS
The following Research Circulars were distributed between January 28 and February 2, 2005. If you wish to read the entire document, please
refer to the CBOE website at www.cboe.com and click on the “Trading Tools” Tab. New listings and series information is also available in the
Trading Tools section of the website. For questions regarding information discussed in a Research Circular, please call The Options Clearing
Corporation at 1-888-OPTIONS.
Research Circular #RS05-060
January 28, 2005
Gold Fields Limited ADS (“GFI”)
Subsequent Full Exchange Offer EXTENDED by
Harmony Gold Mining Company Limited ADS (“HMY”)
Research Circular #RS05-063
January 28, 2005
eBay, Inc (“EBAY/QXB/XBA/YEK/YEU/YRL/OYI”)
2-for-1 Stock Split
Ex-Distribution Date: February 17, 2005
Research Circular #RS05-065
January 28, 2005
Fox Entertainment Group, Inc. (“FOX”)
Exchange Offer EXTENDED by News Corporation
Research Circular #RS05-067
January 28, 2005
First Health Group Corp. (“FHCC/FHQ”) Merger COMPLETED
with Coventry Health Care, Inc. (“CVH/WJU/OVB”)
Research Circular #RS05-070
January 31, 2005
Frontline Ltd. (“FRO & adj. JVU/FMZ/FXW”)
Distribution of Shares of
Ship Finance International Limited (“SFL”)
Ex-Distribution Date: February 3, 2005
Research Circular #RS05-076
February 2, 2005
Chico’s FAS, Inc. (“CHS”)
2-for-1 Stock Split
Ex-Distribution Date: February 23, 2005
February 9, 2005
Volume RB16, Number 6
Regulatory
Bulletin
The Constitution and Rules of the Chicago Board Options Exchange, Incorporated
(“Exchange”), in certain specific instances, require the Exchange to provide notice to the membership. The weekly Regulatory Bulletin is delivered to all effective members to satisfy this
requirement.
Copyright © 2004 Chicago Board Options Exchange, Incorporated
Information Circular IC05-15
Date:
February 2, 2005
To:
Membership
From:
Legal Division
Re:
2004 Information Circulars
Following is a list of the Information Circulars issued by the Exchange during 2004. Any questions with regard to a
specific circular may be directed to the department or committee that issued the notice.
2004 INFORMATION CIRCULARS
Circular
Subject
Issued By
IC04-01
PAR in the Quote for Non-Hybrid Classes
Trading Operations
Date
Issued
1-7-04
IC04-02
Allocation of Option Classes
Allocation Committee
1-6-04
IC04-03
Open Interest Newsletter
Public Relations
1-16-04
IC04-04
SEC Approval of BOX
Office of the Chairman
1-14-04
IC04-05
Fee Cap Program
Office of the Chairman
1-21-04
IC04-06
Member/Lessor E-News
Public Relations
1-22-04
IC04-07
2003 Information Circulars
Legal
1-22-04
IC04-08
CBOE Futures
Public Relations
1-27-04
IC04-09
Allocation of Option Classes
Allocation Committee
1-28-04
IC04-10
Membership Meeting
Office of the Chairman
2-2-04
IC04-11
Member/Lessor E-News
Public Relations
1-30-04
IC04-12
Quoting In Nickels for all Hybrid Series Under $15
Equity Floor Procedure
Committee
1-30-04
IC04-13
Pro-Rata Assignments for S&P 100 Index Options
Trading Operations
2-3-04
IC04-14
Appointment of R. Eden Martin as CBOE’s Lead
Director
Office of the Chairman
2-12-05
IC04-15
Member E-News
Public Relations
2-6-04
IC04-16
Hybrid 2.0 Trading Crowds
Equity Market Performance
Committee
2-10-04
IC04-17
Member E-News
Public Relations
2-13-04
IC04-18
Floor Broker Workstation (FBW) Enhancements
Trading Operations
2-17-04
IC04-19
How Do You Spell D-R-A-K-E Corporate Spelling
Bee
Office of the Chairman
2-6-04
IC04-20
CBOE System Enhancements
Regulatory Services
2-17-04
IC04-21
Allocation of Option Classes
Allocation Committee
2-19-04
IC04-22
Member E-News
Public Relations
2-20-04
IC04-23
Membership Meeting
Office of the Chairman
2-24-04
IC04-24
Revised Payment For Order Flow Program
Office of the Chairman
2-26-04
IC04-25
Open Interest Newsletter
Public Relations
2-27-04
IC04-26
Member E-News
Public Relations
2-27-04
IC04-27
LEAP Conversion Schedule for All Cycles
Trading Systems Support
3-2-04
IC04-28
Relocation of Option Classes
Allocation Committee
3-1-04
IC04-29
Floor Broker Workstation (FBW) Enhancements
Trading Operations
3-3-04
IC04-30
Book Touches Market Highlighting on Hybrid RCN
Trading Operations
3-8-04
IC04-31
CBOE Proposal to Purchase CBOT Exercise Rights
and Notice of Membership Meeting
Board of Directors
3-3-04
IC04-32
Camera Located in OEX-DJX
Public Relations
3-3-04
IC04-33
Telecommunications Problems During Membership
Meetings
Office of the Chairman
3-4-04
IC04-34
Member E-News
Public Relegations
3-5-04
IC04-35
Membership Vote on Revised Marketing Fee
Program and Record Date Notice
Office of the Secretary
3-8-04
IC04-36
Linkage PAR Timer Set to 12 Seconds
Equity Floor Procedure
Committee
3-9-04
IC04-37
Allocation of Option Classes
Allocation Committee
3-12-04
IC04-38
Proposed Marketing Fee Program
Equity Market Performance
Committee
3-12-04
IC04-39
Member E-News
Public Relations
3-12-04
IC04-40
CBOE Plan for the Purchase of CBOT Exercise
Rights
Office of the Chairman
3-12-04
IC04-41
CBOE Plan for the Purchase of CBOT Exercise
Rights
Office of the Chairman
3-25-04
IC04-42
Member E-News
Public Relations
3-19-04
IC04-43
Allocation of Option Classes
Allocation Committee
3-24-04
IC04-44
Member E-News
Public Relations
3-26-04
IC04-45
Membership Voting Results Hotline
Office of the Secretary
3-29-04
IC04-46
Open Interest Newsletter
Public Relations
IC04-47
Chicago Mercantile Exchange Lawsuit
Office of the Chairman
3-31-04
IC04-48
Special Membership Meeting Adjournment
Election Committee
3-31-04
IC04-49
Election Certificate
Office of the Secretary
4-1-04
IC04-50
Member E-News
Public Relations
4-2-04
IC04-51
Trading Floor Cleaning
Building Engineers
4-6-04
IC04-52
Allocation of Option Classes
Allocation Committee
4-7-04
IC04-53
Relocation of Option Classes
Allocation Committee
4-7-04
IC04-54
Member E-News
Public Relations
4-8-04
IC04-55
Hybrid Order Routing Parameter Update
Equity Floor Procedure
Committee
4-20-04
IC04-56
Membership Voting Results Hotline
Office of the Secretary
4-15-04
IC04-57
CBOE’s Comment Letter to the SEC
Office of the Chairman
4-16-04
IC04-58
Member E-News
Public Relations
4-16-04
IC04-59
Election Certificate
Office of the Secretary
4-19-04
IC04-60
Bring Your Child to Work Day
Edward Joyce
4-21-04
3-04
IC04-61
Allocation of Option Classes
Allocation Committee
4-21-04
IC04-62
Member E-News
Public Relations
4-23-04
IC04-63
Member E-News
Public Relations
4-30-04
IC04-64
Allocation of Option Classes
Allocation Committee
4-30-04
IC04-65
e-DPM Appointments
5-4-04
IC04-66
Allocation of Option Classes
Special Appointments
Committee
Allocation Committee
IC04-67
Membership Meeting
Office of the Chairman
5-5-04
IC04-68
Test Dates for VIX Settlement Process
CBOE Futures Exchange, LLC
5-6-04
IC04-69
Member E-News
Public Relations
5-7-04
IC04-70
Allocation of Option Classes
Allocation Committee
5-11-04
IC04-71
Member E-News
Public Relations
5-14-04
IC04-72
Contract Renewal
William Brodsky
5-20-04
IC04-73
Member E-News
Public Relations
5-21-04
IC04-74
Open Interest Newsletter
Public Relations
5-04
IC04-75
National Hunger Awareness Day
Office of the Chairman
5-27-04
IC04-76
Member E-News
Public Relations
5-28-04
IC04-77
Two Issues
Building Management
6-4-04
IC04-78
Elimination of Expiration Saturday Trade Checking
Member Trading Services
Department
6-1-04
IC04-79
Member E-News
Public Relations
6-4-04
IC04-80
Member E-News
Public Relations
6-10-04
IC04-81
Allocation of Option Classes
Allocation Committee
6-14-04
IC04-82
Membership Meeting
Office of the Chairman
6-16-04
IC04-83
Member E-News
Public Relations
6-18-04
IC04-84
Electronic DPM-M (e-DPM) Rollout Schedule
Modified Trading System
Appointments Committee
5-5-04
6-04
IC04-85
Member E-News
Public Relations
6-25-04
IC04-86
Relocation of Option Classes
Allocation Committee
6-30-04
IC04-87
Electronic Designated Primary Market-Maker (eDPM) Rollout Schedule Postponement
Modified Trading System
Appointments Committee
7-1-04
IC04-88
Member E-News
Public Relations
7-2-04
IC04-89
Allocation of Option Classes
Allocation Committee
7-9-04
IC04-90
Allocation of Option Classes
Allocation Committee
7-9-04
IC04-91
Member E-News
Public Relations
7-9-04
IC04-92
Allocation of Option Classes
Allocation Committee
7-13-04
IC04-93
Final Electronic Designated Primary Market-Makers
e-DPM Rollout Schedule
Modified Trading System
Appointments Committee
7-14-04
IC04-94
PAR on Windows Platform
Trading Operations
7-28-04
IC04-95
e-DPM Appointments
Special Appointments
Committee
7-14-04
IC04-96
Launch of Remote Market-Maker Program
Membership
7-15-04
IC04-97
Member E-News
Public Relations
7-15-04
IC04-98
Selection of Nominees for Board of Directors,
Nominating Committee, and MTS Committee
Nominating Committee
7-19-04
IC04-99
Hybrid Order Routing Parameter Update
Equity Options Procedure
Committee
7-19-04
IC04-100
Hybrid Opening Tips
Market Performance
Committee
7-19-04
IC04-101
Allocation of Option Classes
Allocation Committee
7-22-04
IC04-102
Relocation of Option Classes
Modified Trading System
Appointments Committee
7-23-04
IC04-103
August Electronic Designated Primary MarketMaker (e-DPM) Rollout Schedule
Modified Trading System
Appointments Committee
7-23-04
IC04-104
Member E-News
Public Relations
7-23-04
IC04-105
Allocation of Option Classes
Allocation Committee
7-28-04
IC04-106
CBOE Membership Forms Library
Membership
7-28-04
IC04-107
Persons Who Have Submitted Their Names to Fill
Vacancies on the Board of Directors, the
Nominating Committee and the MTS Committee
Nominating Committee
7-30-04
IC04-108
Member E-News
Public Relations
7-30-04
IC04-109
Persons Who Have Submitted Their Names to be
Considered for Nomination on the Board of
Directors, the Nominating Committee and the MTS
Committee
Nominating Committee
8-4-04
IC04-110
2004 Year in Review
Office of the Chairman
8-6-04
IC04-111
CBOE Member E-News
Public Relations
8-6-04
IC04-112
Response to Chicago Tribune Editorial
William Brodsky/Edward Tilly
8-9-04
IC04-113
Persons Who Have Submitted Their Names to be
Considered for Nomination on the Board of
Directors, the Nominating Committee and the MTS
Committee
Nominating Committee
8-10-04
IC04-114
Member E-News
Public Relations
8-13-04
IC04-115
Persons Who Have Submitted Their Names to be
Considered for Nomination on the Board of
Directors, the Nominating Committee and the MTS
Committee
Nominating Committee
8-18-03
IC04-116
Allocation of Option Classes
Allocation Committee
8-18-04
IC04-117
Partnership with John B. Drake School Back to
School Supply Drive
Office of the Chairman
8-17-04
IC04-118
Member E-News
Public Relations
8-20-04
IC04-119
Nominating Committee Meetings
Nominating Committee
8-23-04
IC04-120
Nominating Committee Open Meetings
Nominating Committee
8-23-04
IC04-121
Persons Who Have Submitted Their Names to be
Considered for Nomination on the Board of
Directors, the Nominating Committee and the MTS
Committee
Nominating Committee
8-25-04
IC04-122
Presentation by Ibbotson Associates at CBOE on
September 9
International Business
Development Department
8-30-04
IC04-123
September Electronic Designated Primary MarketMaker (e-DPM) Rollout Schedule
Modified Trading Systems
Appointments Committee
8-24-04
IC04-124
Anti-Money Laundering (“AML”) Compliance
Programs
Regulatory Services
8-26-04
IC04-125
Member E-News
Public Relations
8-27-04
IC04-126
Persons Who Have Submitted Their Names to be
Considered for Nomination on the Board of
Directors, the Nominating Committee and the MTS
Committee
Nominating Committee
9-1-04
IC04-127
Six Flags Great America – CBOE Night
OPRA
8-26-04
IC04-128
Allocation of Option Classes
Allocation Committee
9-1-04
IC04-129
Membership Meeting
Office of the Chairman
9-2-04
IC04-130
Member E-News
Public Relations
9-3-04
IC04-131
Persons Who Have Submitted Their Names to be
Considered for Nomination on the Board of
Directors, the Nominating Committee and the MTS
Committee
Nominating Committee
9-8-04
IC04-132
Relocation of Option Classes (Timber Hill)
Modified Trading System
Appointments Committee
9-8-04
IC04-133
Relocation of Option Classes (Susquehanna)
Modified Trading System
Appointments Committee
9-8-04
IC04-134
Student Mentoring Opportunity at CBOE
William Brodsky/Edward Tilly
9-8-04
IC04-135
Member E-News
Public Relations
9-10-04
IC04-136
Presentations for Membership Meeting
Office of the Chairman
9-10-04
IC04-137
Persons Who Have Submitted Their Names to be
Considered for Nomination on the Board of
Directors, the Nominating Committee and the MTS
Committee
Nominating Committee
9-14-04
IC04-138
Exercise Right Privilege Purchase Offer
Office of the Chairman
9-17-04
IC04-139
Member E-News
Public Relations
9-17-04
IC04-140
Persons Who Have Submitted Their Names to be
Considered for Nomination on the Board of
Directors, the Nominating Committee and the MTS
Committee
Nominating Committee
9-22-04
IC04-141
Membership Meeting
Office of the Chairman
9-22-04
IC04-142
Blood Drive
Human Resources
9-30-04
IC04-143
Market-Maker Orders in Hybrid Classes
Trading Operations
9-24-04
IC04-144
Allocation of Option Classes
Allocation Committee
9-22-04
IC04-145
Persons Who Have Submitted Their Names to be
Considered for Nomination on the Board of
Directors, the Nominating Committee and the MTS
Committee
Nominating Committee
9-23-04
IC04-146
Member E-News
Public Relations
9-24-04
IC04-147
Persons Who Have Submitted Their Names to be
Considered for Nomination on the Board of
Directors, the Nominating Committee and the MTS
Committee
Nominating Committee
9-24-04
IC04-148
Proposed Marketing Fee Program
Equity Market Performance
Committee
9-30-04
IC04-149
Candidates Nominated for Board of Directors,
Nominating Committee, and MTS Committee
Nominating Committee
9-30-04
IC04-150
CBOE Member E-News
Public Relations
10-1-04
IC04-151
Membership Vote on Revised Marketing Fee
Program and Record Date Notice
Office of the Secretary
10-5-04
IC04-152
Flu Vaccine
Security and Safety
10-8-04
IC04-153
Member E-News
Public Relations
10-8-04
IC04-154
Allocation of Option Classes
Allocation Committee
10-12-04
IC04-155
Member E-News
Public Relations
10-15-04
IC04-156
October 2004 Open Interest
Public Relations
10-20-04
IC04-157
Petition Candidate for the 2004 Annual Election
November 18, 2004
Office of the Secretary
10-20-04
IC04-158
Annual Membership Meeting
Office of the Chairman
10-20-04
IC04-159
Member E-News
Public Relations
10-22-04
IC04-160
Allocation of Option Classes
Allocation Committee
10-20-04
IC04-161
CBOE Annual Election – Record Date Notice
Office of the Secretary
10-26-04
IC04-162
Membership Voting Results Hotline
Office of the Secretary
10-27-04
IC04-163
Election Certificate
Office of the Secretary
10-28-04
IC04-164
Petition Candidates for the 2004 Annual Election
November 18, 2004
Office of the Secretary
10-29-04
IC04-165
Non-Member Market-Maker (N Origin Code)
Transaction Fee Increase
Financial Planning Committee
10-29-04
IC04-166
Member E-News
Public Relations
10-29-04
IC04-167
TNT Version 5.0
Trading Operations
11-2-04
IC04-168
Allocation of Option Classes
Allocation Committee
11-3-04
IC04-169
Membership Meeting
Office of the Chairman
11-4-04
IC04-170
Member E-News
Public Relations
11-5-04
IC04-171
Voluntary Delisting of Option Classes
Allocation Committee
11-11-04
IC04-172
Annual Holiday Food Drive
Office of the Chairman
11-10-04
IC04-173
Reallocation of Option Classes
Allocation Committee
11-11-04
IC04-174
Test Symbols for MNX Hybrid 1.0 Conversion
Trading Operations
11-11-04
IC04-175
Member E-News
Public Relations
11-12-04
IC04-176
Membership Voting Results Hotline
Office of the Secretary
11-15-04
IC04-177
Annual Election Certificate
Office of the Secretary
11-18-04
IC04-178
Member E-News
Public Relations
11-19-04
IC04-179
Capped Uma (CUMA)
Equity Options Procedure
/Trading Operations
Committees
11-24-04
IC04-180
Member E-News
Public Relations
11-24-04
IC04-181
Allocation of Option Classes
Allocation Committee
11-24-04
IC04-182
December Electronic Designated Primary MarketMaker (e-DPM) Rollout Schedule
MTS Appointments Committee
12-1-04
IC04-183
Open Interest Newsletter
Public Relations
IC04-184
Compliance with Final Judgment Agreed to With the
Department of Justice
Legal
11-30-04
IC04-185
Reuters News – Ceasing 3rd Party Access on 12-3104
Systems Operations
12-1-04
IC04-186
Hybrid Booking Update M, N & Y Orders
Trading Operations
12-3-04
IC04-187
Member E-News
Public Relations
12-3-04
IC04-188
Partnership with John B. Drake School – Holiday
Gift Drive
Office of the Chairman
12-10-04
IC04-189
CBOE Member E-News
Public Relations
12-10-04
IC04-190
December Electronic Designated Primary MarketMaker (e-DPM) Rollout Schedule
MTS Appointments Committee
12-14-04
IC04-191
2005 Committee Sign-Up
Edward Tilly
12-17-04
IC04-192
Member E-News
Public Relations
12-17-04
IC04-193
Systems Outage
Office of the Chairman
12-21-04
IC04-194
Member E-News
Public Relations
12-23-04
IC04-195
CBOE Governance Practices and Compensation of
Senior Officers and Directors
Robert Birnbaum, Chairman,
CBOE Governance Committee;
James Boris, Chairman, CBOE
Compensation Committee; R.
Eden Martin, Lead Director
12-28-04
IC04-196
Member E-News
Public Relations
12-30-04
11-04
Regulatory
Circulars
Regulatory Circular RG05-13
Date:
February 1, 2005
To:
The Membership
From:
Financial Planning Committee
Subject:
MNX and NDX Fee Changes Effective February 1, 2005
The Financial Planning Committee recommended and the Board of Directors recently approved the following per contract fee changes for MNX and NDX. The fee changes will be
effective February 1, 2005.
Customer MNX
Customer NDX prem. > or = $1
Customer NDX prem. < $1
Current
Tran.
Fee
$.20
.45
.25
$.20
.45
.25
Revised Revised Revised
Trans.
License Total
Fee
Fee
$.15
$.15
.15
.15
.15
.15
NDX Market-Maker & DPM (1)
MNX Market-Maker & DPM (1)
.24
.24
.24
.34
.24
.24
.10
.10
.34
.34
Member Firm Proprietary (2):
Facilitation of Customer
Non-facilitation
.20
.24
.20
.24
.24
.24
.10
.10
.34
.34
Broker-Dealer:
Premium > or = $1
Premium < $1
.45
.25
.45
.25
.25
.25
.10
.10
.35
.35
Non-member Market-Maker
Premium > or = $1
Premium < $1
.47
.27
.47
.27
.47
.27
.10
.10
.57
.37
Linkage Orders:
Premium > or = $1
Premium < $1
.45
.25
.45
.25
.45
.25
.10
.10
.55
.35
Product/Order Type
Current
License
Fee
.10
Current
Total
Notes:
(1)
(2)
Reflects standard rates prior to any reductions related to the Prospective
Fee Reduction Program.
Eligible firms are subject to a fee cap of $75,000 per month for all products.
Please contact Ermer Love at 312-786-7032 (lovee@cboe.com) or Don Patton at 312-7867026 (patton@cboe.com) if you have any questions.
February 9, 2005, Volume RB16, Number 6
RB11
Regulatory Circulars
continued
Regulatory Circular RG05-14
Date:
January 31, 2005
To:
The Membership
From:
Financial Planning Committee
Subject:
Fee Reductions for February 2005
CBOE averaged approximately 1,450,000 contracts per day (CPD) during the period July
2004 through January 2005.
Per the Prospective Fee Reduction Program, Market-Maker and DPM transaction fees
and floor brokerage fees will be reduced by 15% per contract from standard rates during
February 2005 (equal to January 2005 discounts).
Fee
Equities Market-Maker Trans. Fee
Equities DPM Trans. Fee
QQQ, SPY & Indexes
Mrkt.-Maker/DPM Trans. Fee
Floor Brokerage Fee
Standard
Rate
Feb. ‘05
Rate
22 cents
12 cents
(1) 24 cents
18.7 cents
10.2 cents
(1) 20.4 cents
4 cents
3.4 cents
(1) Above rates exclude a license fee surcharge for the following products:
•
Dow Jones indexes, MNX and NDX – 10 cents
•
Russell 2000 (RUT) cash settled index – 40 cents
Please call Ermer Love (312-786-7032) or Don Patton (312-786-7026) if you have any
questions.
Regulatory Circular RG05-15 is a list of Regulatory Circulars issued by the CBOE in 2004.
The list is enclosed with this issue of the Regulatory Bulletin.
RB12
February 9, 2005, Volume RB16, Number 6
Regulatory Circular RG05-15
Date: February 1, 2005
To:
Membership
From: Legal Division
Re:
2004 Regulatory Circulars
Exchange policy provides that communications to Exchange members of a regulatory nature will be
designated Regulatory Circulars, and published in the Regulatory Bulletin. For the convenience of the
membership, the following is a list of Regulatory Circulars that were issued during 2004.
Any questions regarding a specific circular may be directed to the Exchange department or committee
that issued the notice. Regulatory Bulletins from 1998 to the present are available on the Membership Site
at http://www/cboe.com.
2004 REGULATORY CIRCULARS
Regulatory
Bulletin
Issue
1-16-04
Regulatory
Circular #
Subject
Issued By
RG04-01
Supplement to the Options Disclosure Document
Regulatory Services
RG04-02
Double Width Quote Spreads
Equity Market Performance
Committee
1-16-04
RG04-03
Supplement to the Options Disclosure Document
Regulatory Services
1-16-04
RG04-04
FOCUS Report (Form X-17A-5)
Financial and Sales Practice
Compliance
1-16-04
RG04-05
Erroneous Execution Reports and Order
Reinstatments
Regulatory Services
1-23-04
RG04-06
Issuance of Clerk and Floor Manager Badges
Membership
1-23-04
RG04-07
Inter-Exchange Procedures in Volatile Markets
Market Operations
1-23-04
RG04-08
Minimum Market Share Requirements
Equity Market Performance
and Development
1-30-04
RG04-09
Void
RG04-10
Void
RG04-11
Responsibilities of Financial and Operations
Principals
Regulatory Services
2-13-04
RG04-12
Assignment of Liability for Linkage Satisfaction
Orders
Equity Floor Procedure
Committee
2-6-04
RG04-13
Membership Application and Other Membership
Fees
Membership
2-6-04
RG04-14
Extension of Inactive Nominee Status and
Renewal/Change of Status Application Time Periods
Membership
2-6-04
RG04-15
2003 Regulatory Circulars
Legal
2-6-04
RG04-16
Cap on Member Firm Proprietary and Facilitation
Fees
Financial Planning
2-6-04
RG04-17
Prospective Fee Reductions program for February
and March 2004
Financial Planning
2-6-04
RG04-18
SEC Approval of Supplement to the Options
Disclosure Document
Regulatory Services
2-13-04
RG04-19
DPM Fee Credits Relating to Linkage “Scratched”
Transactions
Financial Planning
2-20-04
RG04-20
SEC Approval of Proposed Changes to the
Governance of the Exchange
Legal
2-20-04
RG04-21
Delisting Option Classes
Allocation Committee
2-20-04
RG04-22
Hybrid Quote Lock Timer
Equity Floor Procedure
Committee
2-20-04
RG04-23
$5 Quote Widths in Top 200 Hybrid Classes
Equity Market Performance
Committee
3-5-04
RG04-24
Extension of Contrary Exercise Advice (CEA)
Submission Time for Certain Accounts
Market Regulation
2-27-04
RG04-25
Restrictions on Transactions in China Fund Inc.
(CHN/CHN) Option Class
Market Operations
3-5-04
RG04-26
Product Delisting
Office of the Chairman
3-5-04
RG04-27
CMTA Orders Regarding Cap on Member Firm
Proprietary and Firm Facilitation Fees
Financial Planning Committee
3-12-04
RG04-28
Restrictions on Transactions in Certain Micromuse,
Inc. (MUSEE/QUM)
Market Operations
3-12-04
RG04-29
Restrictions on Transactions in Certain Motorola
Options (MOT/MOJ)
Market Operations
3-12-04
RG04-30
Transfer of Individual Memberships in Trust
Membership
3-12-04
RG04-31
$5 Quote Widths Expanded to All Hybrid Classes
Equity Market Performance
Committee
3-12-04
RG04-32
Food & Drink on the Trading Floor
Floor Officials Committee
3-12-04
RG04-33
Expiration of Option Trading Permits
Membership
3-12-04
RG04-34
Restrictions on Transactions in Certain Internet
Initiative Japan, Inc. (IIJIE/IQD)
Market Operations
3-19-04
RG04-35
SEC Approval of Amendments to Exchange Rule 4.6
(False Statements) and Adoption of Exchange Rule
4.22 (Communications to the Exchange or the
Clearing Corporation)
Legal/Regulatory Services
Divisions
3-26-04
RG04-36
Regular Contrary Exercise Advice (CEA) Procedures
for Equity Options
Market Regulation
3-26-04
RG04-37
Permanent Approval of Rule Change to Extend the
Contrary Exercise Advice (CEA) Submission Time
for Certain Accounts
Market Regulation
3-26-04
RG04-38
Revised Summary Fine Schedule for Position Limit
Violations
Market Regulation
3-26-04
RG04-39
Changes to RAES Volume Limit for OEX/XEO
Index Floor Procedure
Committee
4-2-04
RG04-40
PAR Eligibility for Broker Dealer Orders in DJX and
DIA
Index Floor Procedure
Committee
4-2-04
RG04-41
Submission of Payment Data to the Exchange
Equity Market Performance
and Marketing Fee Oversight
Committees
4-9-04
Financial Planning Committee
4-16-04
RG04-42
Prospective Fee Reduction Program April through
June, 2004
RG04-43
Russell 2000 DPM and Market-Maker License Fees
Effective April 1, 2004
Financial Planning Committee
4-16-04
RG04-44
Index Classes Eligible for NASD Short Sale Rule
Option Market-Maker Exemption
Regulatory Services
4-16-04
RG04-45
Aggregation of Accounts for Position and Exercise
Limit Purposes
Regulatory Services
4-16-04
RG04-46
Adjustment and Nullification of Open Outcry
Transactions
Legal
4-23-04
RG04-47
Inter-Exchange Procedures in Volatile Markets For
the Second Quarter 2004
Market Operations
4-23-04
RG04-48
EBOOK “Trigger” Functionality
Equity Floor Procedure
Committee
5-7-04
RG04-49
Hybrid Quote Lock Timer
Equity Floor Procedure
Committee
5-7-04
RG04-50
Restrictions on Transactions in Certain Nortel
Networks (NT) Options
Market Operations
5-7-04
RG04-51
Restrictions on Transactions in Certain OM Group,
Inc. (OMG) Options
Market Operations
5-7-04
RG04-52
Restrictions on Transactions in Certain Goodyear
Tire and Rubber Company (GT) Options
Market Operations
5-7-04
RG04-53
Restrictions on Transactions in Certain EL Paso
Corporation (EP) Options
Market Operations
5-7-04
RG04-54
Restrictions on Transactions in Certain Key Energy
Services, Inc. (KEG) Options
Market Operations
5-7-04
RG04-55
Restrictions on Transactions in Certain Hollinger
International, Inc. (HLR) Options
Market Operations
5-7-04
RG04-56
How Firm Quote Applies to Marketable Orders
Entered At or Near the Close
Regulatory Services
5-14-04
RG04-57
Anti-Money Laundering Programs (“AML”)
Compliance Programs
Regulatory Services
5-14-04
RG04-58
Description of Procedures for the ROS Opening on
VIX Futures and Options Contract Settlement Days
Regulatory Services
5-21-04
RG04-59
Financial Accounting Standards Board Statement
No. 150
Regulatory Services
5-21-04
RG04-60
Delisting Option Classes
Allocation Committee
5-21-04
RG04-61
Procedure for Signing on ROS for VIX
SPX Floor Procedure
Committee
5-28-04
RG04-62
EBOOK “Trigger” Functionality (non-Hybrid
Classes Only)
Equity Floor Procedure
Committee
5-28-04
RG04-63
Product Delisting
Office of the Chairman
5-28-04
RG04-64
Issuance of Clerk and Floor Manager Badges
Membership Committee
6-4-04
RG04-65
Restrictions on Transactions in Certain Goodyear
Tire and Rubber Company (“GT”) Options
Market Operations
6-11-04
RG04-66
All or None (AON) Orders in Hybrid Classes
Equity Floor Procedure
Committee
6-11-04
RG04-67
Hybrid Quote Lock Timer
Equity Floor Procedure
Committee
6-25-04
RG04-68
Routing of Discretionary Orders to DPM PAR
Workstations
Regulatory Services
6-11-04
RG04-69
No Exercises of CBOE American-Style Cash-Settled
Options on Friday, June 11, 2004
Regulatory Services
6-25-04
RG04-70
Committee Standards and Procedures
Legal
6-25-04
RG04-71
Legal Width Quotes in Open Outcry in Hybrid
Legal
6-25-04
RG04-72
Description of Procedures for the ROS Opening on
VIX Futures and Options Contract Settlement Days
Regulatory Services
6-25-04
RG04-73
June 2004 Equity, Index and Interest Rate Options
Expiration Schedule
Trading Systems Support
6-25-04
RG04-74
Hybrid Quote Lock Timer
Equity Floor Procedure
Committee
7-2-04
RG04-75
SEC Approval of Proposed Rule Change Regarding
Relocating Securities
Legal
7-2-04
RG04-76
Anti-Money Laundering (“AML”) Compliance
Programs: Educational Sessions and Extension
Regulatory Services
7-9-04
RG04-77
Fiscal 2005 (FY05) Fee Changes
Financial Planning Committee
7-9-04
RG04-78
Index Option Classes Eligible for NASD Short Sale
Rule Option Market-Maker Exemption
Regulatory Services
7-9-04
RG04-79
Linkage – A Required Part of Customer Order
Handling
Equity Floor Procedure
Committee
7-9-04
RG04-80
Automatic Execution of Market-Maker Orders in
Hybrid Classes
Equity Floor Procedure/Index
Floor Procedure Committees
7-23-04
RG04-81
Changes to Quote Lock in Hybrid
Equity Floor Procedure/Index
Floor Procedure Committees
7-23-04
RG04-82
Quote Lock and “Fading”
Legal Division and
Department of Market
Regulation
8-6-04
RG04-83
Fee Reductions for August 2004
Office of the Chairman
8-13-04
RG04-84
CBOE Marketing Fee Program
Market Quality Assurance
8-13-04
RG04-85
SPX Opening on VIX Futures Settlement Days
CBOE Futures Exchange
8-20-04
RG04-86
Linkage – Approved Amendments to the Linkage
Plan
Legal/Trading Operations
8-20-04
RG04-87
Payment for Order Flow Program
Marketing Fee Oversight
Committee
8-20-04
RG04-88
Restrictions on Transactions in Vaxgen Inc.
Market Operations
8-20-04
RG04-89
Restrictions on Transactions in Sonus Networks, Inc.
(SONSE/UJS)
Market Operations
8-27-04
RG04-90
Margin Requirements for Certain Complex Spreads
Regulatory Services
8-27-04
RG04-91
Addition to Obvious Error Rule for “No Bid at a
Nickel” Transactions
Legal
8-27-04
RG04-92
Ability to Quote 1-Up in Hybrid Classes
Trading Operations/Legal
9-3-04
RG04-93
Hybrid Order Routing Parameter Update
Trading Operations
9-3-04
RG04-94
Prospective Fee Reduction Program for September
2004
Office of the Chairman
9-10-04
RG04-95
OCC Rule Change Automatic Exercise Thresholds
Regulatory Services
10-1-04
RG04-96
Restrictions on Transactions in US Airways Group,
Inc. (UAIRQ/UWS)
Market Operations
10-1-04
RG04-97
Expiration Friday Trade Checking
Trading Systems Support
10-6-04
RG04-98
Lifting Restrictions on Transactions in Sonus
Networks, Inc. (SONS/UJS)
Market Operations
10-6-04
RG04-99
BERS/BART Hybrid Order Routing
Equity Options Procedure
Committee
10-13-04
RG04-100
ETF and HOLDRs Options Customer Fee
Reductions
Financial Planning Committee
10-13-04
RG04-101
Restrictions on Transactions in Clarus Corp.
(CLRS/RPU)
Market Operations
10-13-04
RG04-102
2004 Annual Election Process
Office of the Secretary
10-13-04
RG04-103
Index Option Classes Eligible for NASD Short Sale
Rule Option Market-Maker Exemption
Regulatory Services Division
10-20-04
RG04-104
Restrictions on Transactions in Netopia, Inc.
(NTPA/NQD)
Market Operations
10-27-04
RG04-105
Inter-Exchange Procedures in Volatile Markets
Marketing
11-3-04
RG04-106
Personal Computers in the Trading Crowd
Facilities
11-3-04
RG04-107
Financial Accounting Standard Board (“FASB”)
Statement No. 150 – Temporary Relief on
Calculation of Net Capital
Regulatory Services
11-3-04
RG04-108
Fee Reductions for November, 2004
Office of the Chairman
11-10-04
RG04-109
Exchange Traded Funds (“ETF’s”) Cross
Transactions
Market Regulation
11-10-04
RG04-110
Margin & Net Capital Requirements for Options on
the CBOE China Index
Regulatory Services
11-10-04
RG04-111
E-Mail and Instant Messaging Retention
Requirements
Market Regulation
11-17-04
RG04-112
Linkage Plan Approval of Real Size Amendment
Legal/Trading Operations
11-17-04
RG04-113
Regulation SHO (Short Sales)
Regulatory Services
11-17-04
RG04-114
Campaign Materials
Office of the Secretary
11-17-04
RG04-115
Electioneering
Election Committee
11-17-04
RG04-116
Personal Computers in the Trading Crowd
Facilities
12-15-04
RG04-117
Relief from Commodity Pool Operator and
Commodity Trading Advisor Registration for
Security Futures Trading
Legal
11-24-04
RG04-118
PAR Auto-Book Timer Change to 5 Seconds
Equity Options
Procedure/Trading Operations
Committees
12-1-04
RG04-119
MNX DPM and Market-Maker License Fees
Effective December 1, 2004
Financial Planning Committee
12-1-04
RG04-120
CBOE Rule Filing Regarding Systematizing Orders
and COATS
Legal/Regulatory
12-1-04
RG04-121
Fee Reductions for December 2004
Office of the Chairman
12-8-04
RG04-122
Trading Hours for Options on the NASDAQ-100
Stock Index Tracking Stock
Research
12-8-04
RG04-123
Amendments to CBOE Rule 9.3A that Eliminate all
Exemptions from the Requirement to Complete the
Regulatory Element of the Continuing Education
Program
Financial and Sales Practice
Compliance
12-8-04
RG04-124
Gratuities Policy – Rule 4.4
Office of the Secretary
12-8-04
RG04-125
CBOE Rule Filing Regarding Systematizing Orders
and COATS
Legal
12-15-04
RG04-126
Void
RG04-127
Regulation SHO (Short Sales)
Regulatory Services
1-5-05
RG04-128
Wireless Systems in the Trading Crowds
Legal
1-5-05
RG04-129
Improper Disclosure of Orders on PAR Terminal
Regulatory Services
1-5-05
RG04-130
New Obvious Error Rule for Equities
Legal
1-5-05
RG04-131
Fee Changes Effective January 1, 2005
Financial Planning Committee
1-12-05
RG04-132
Monthly “Fair Value” Settlement of CME Stock
Index Futures and Options and Year End Closing
Rotations
Research & Planning
1-12-05
Rule Changes,
Interpretations
and Policies
APPROVED RULE CHANGES
The Securities and Exchange Commission (“SEC”) has approved the following change(s) to
Exchange Rules pursuant to Section 19(b) of the Securities Exchange Act of 1934, as
amended (“the Act”). Copies are available from the Legal Division.
The effective date of the rule change is the date of approval unless otherwise noted.
SR-CBOE-2004-35
DPM Obligation to Display Customer Limit Orders
On January 21, 2005, the SEC approved Rule Change File No. SR-CBOE-2004-35, which
filing revises Rule 8.85 to require DPMs to immediately display the full price and size of any
customer limit order that improves the price or increases the size of the best disseminated
CBOE quote. (Securities Exchange Act Release No. 51063, 70 FR 4165 (January 28,
2005)). Any questions regarding the rule change may be directed to Steve Youhn, Legal
Division, at 312-786-7416. The text of the amended rules is set forth below. New language
is italicized.
Rule 8.85
DPM Obligations
(a) No change
(b) Agency Transactions. Each DPM shall fulfill all of the obligations of a Floor
Broker (to the extent that the DPM acts as a Floor Broker) and of an Order Book
Official under the Rules, and shall satisfy each of the requirements contained in
this paragraph, in respect of each of the securities allocated to the DPM. To the
extent that there is any inconsistency between the specific obligations of a DPM
set forth in subparagraphs (b)(i) through (b)(vii) of this Rule and the general obligations of a Floor Broker or of an Order Book Official under the Rules, subparagraphs
(b)(i) through (b)(vii) of this Rule shall govern.
(i) Display Obligation: Each DPM shall display immediately the full price
and size of any customer limit order that improves the price or increases
the size of the best disseminated CBOE quote. “Immediately” means,
under normal market conditions, as soon as practicable but no later than
30-seconds after receipt (“30-second standard”) by the DPM. The term
“customer limit order” means an order to buy or sell a listed option at a
specified price that is not for the account of either a broker or dealer;
provided, however, that the term customer limit order shall include an order
transmitted by a broker or dealer on behalf of a customer. The following are
exempt from the Display Obligation as set forth under this Rule:
(A) An order executed upon receipt;
(B) An order where the customer who placed it requests that it not be displayed,
and upon receipt of the order, the DPM announces in public outcry the information
concerning the order that would be displayed if the order were subject to being
displayed;
(C) An order for which immediately upon receipt a related order for the principal
account of a DPM reflecting the terms of the customer order is routed to another
options exchange that is a participant in the Intermarket Options Linkage Plan;
(D) The following orders as defined in Rule 6.53: contingency orders; one-cancelsthe-other orders; all or none orders; fill or kill orders; immediate or cancel orders;
complex orders (e.g., spreads, straddles, combinations); and stock-option orders;
February 9, 2005, Volume RB16, Number 6
RB21
Rule Changes,
Interpretations and
Policies continued
SR-CBOE-2004-35 continued
(E) Orders received before or during a trading rotation (as defined in Rule 6.2,
6.2A, and 6.2B), including Opening Rotation Orders as defined in Rule 6.53(l), are
exempt from the 30-second standard, however, they must be displayed immediately upon conclusion of the applicable rotation; and
(F) Large Sized Orders: Orders for more than 100 contracts, unless the customer
placing such order requests that the order be displayed.
(ii)-(v)
No change
(vi) not represent discretionary orders as a Floor Broker or otherwise.
(vii)
No change
(c) – (e)
No change
…. Interpretations and Policies
No change
SR-CBOE-2005-05
Marketing Fee for SPDR Options
On January 26, 2005, the SEC approved Rule Change File No. SR-CBOE-2005-05, which
filing amends the CBOE Fee Schedule to assess a fee on options on Standard & Poor’s
Depository Receipts (SPDRs) involving transactions of Market-Makers, DPMs, and eDPMs other than Market-Maker-to-Market-Maker transactions. The fee will be imposed at
the rate of $.22 per contract. Any questions regarding the rule change may be directed to
Andrew Spiwak, Legal Division, at 312-786-7483. The text of the amended Fee Schedule
is available from the Legal Division, or can be accessed online at www.cboe.com, under
the “About CBOE” link.
PROPOSED RULE CHANGES
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934, as amended (“the
Act”), and Rule 19b-4 thereunder, the Exchange has filed the following proposed rule changes
with the Securities and Exchange Commission (“SEC”). Copies of the rule change filings
are available from the Legal Division. Members may submit written comments to the Legal
Division.
The effective date of a proposed rule change will be the date of approval by the SEC,
unless otherwise noted.
SR-CBOE-2005-12
Amendments to Equity and Index Obvious Error Rules
On January 26, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-12, which
filing proposes to amend Exchange Rule 6.25 – Nullification and Adjustment of Equity
Options Transactions, to adopt an erroneous quote provision. The filing also proposes two
minor grammatical changes to Exchange Rule 24.16 – Nullification and Adjustment of
Index Option Transactions. Any questions regarding the proposed rule change may be
directed to Andrew Spiwak, Legal Division, at 312-786-7483. The text of the proposed rule
amendments is set forth below. Proposed new language is underlined. Proposed deleted
language is [stricken out]. A copy of the filing is available from the Legal Division.
Rule 6.25
Nullification and Adjustment of Equity Options Transactions
*****
RB22
February 9, 2005, Volume RB16, Number 6
Rule Changes,
Interpretations and
Policies continued
SR-CBOE-2005-12 continued
(a) Trades Subject to Review
*****
(1) – (4) No change
(5) Erroneous Quote in Underlying: Electronic trades (this provision has no
applicability to trades executed in open outcry) resulting from an erroneous quote in
the underlying security may be adjusted or nullified as setforth in paragraph (a)(1)
above. An erroneous quote occurs when the underlying security has a width of at
least $1.00 and has a width at least five times greater than the average quote width
for such underlying security on the primary market (as defined in Rule 1.1(v)) during
the time period encompassing two minutes before and after the dissemination of
such quote. For purposes of this Rule, the average quote width shall be determined
by adding the quote widths of each separate quote during the four minute time
period referenced above (excluding the quote in question) and dividing by the number of quotes during such time period (excluding the quote in question).
(b) – (e) No change
Interpretations and Policies…
No change
*****
Rule 24.16
Nullification and Adjustment of Index Option Transactions
(a) Trades Subject to Review
(1) – (7) No change
(b) Procedures for Reviewing Transactions
(1) Notification: Any member or person associated with a member that believes it
participated in a transaction that may be adjusted or nullified in accordance with
paragraph (a) must notify any Trading Official promptly but not later than fifteen (15)
minutes after the execution in question. For transactions occurring after 2:45 p.m.
(CT[CST]), notification must be provided promptly but not later than fifteen (15)
minutes after the close of trading of that security on CBOE. Absent unusual circumstances, Trading Officials shall not grant relief under this Rule unless notification is made within the prescribed time periods.
In the absence of unusual circumstances, Trading Officials (either on their own
motion or upon request of a member) must initiate action pursuant to paragraph
(a)(3) above within sixty (60) minutes of the occurrence of the verifiable disruption
or malfunction. When Trading Officials take action pursuant to paragraph (a)(3), the
members involved in the transaction(s) shall receive verbal notification as soon as
is practicable.
(2)
No change
(c) Adjustments
February 9, 2005, Volume RB16, Number 6
RB23
Rule Changes,
Interpretations and
Policies continued
SR-CBOE-2005-12 continued
Unless otherwise specified in Rule 24.16(a)(1)-(6), transactions will be adjusted
provided the adjusted price does not violate the customer’s limit price. Otherwise,
the transaction will be nullified. With respect to Rule 24.16(a)(1)-(5), the price to
which a transaction shall be adjusted shall be the National Best Bid (Offer) immediately following the erroneous transaction with respect to a sell (buy) order entered on the Exchange. For ROS or HOSS transactions, the price to which a
transaction shall be adjusted shall be based on the first non-erroneous quote after
the erroneous transaction on CBOE. With respect to 24.16(a)(6), the transaction
shall be adjusted to a price that is $0.10 under parity.
(d) -(e) No change
Interpretations and Policies…..
.01 -.02 No change
SR-CBOE-2005-13
Extension of Linkage Pilot Program Relating to TradeThroughs
On January 26, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-13, which
filing proposes to revise Exchange Rule 6.83 to extend a linkage pilot program relating to
the satisfaction of Satisfaction Orders and to revise the maximum number of contracts to
be filled with respect to any Satisfaction Order. Any questions regarding the proposed rule
change may be directed to Angelo Evangelou, Legal Division, at 312-786-7464. The text of
the proposed rule amendments is set forth below. Proposed new language is underlined.
Proposed deleted language is [stricken out]. A copy of the filing is available from the Legal
Division.
Rule 6.83 Order Protection
(a)
Avoidance and Satisfaction of Trade-Throughs.
(1)
No change.
(2)
Price and Size. The price and size at which a Satisfaction Order shall be
filled is as follows:
(i)
No change.
(ii) Size. An Aggrieved Party may send a Satisfaction Order up to the
lesser of the size of the Verifiable Number of Customer Contracts that
were included in the disseminated bid or offer that was traded through
and the size of the transaction that caused the Trade-Through. Subject to
paragraph (2)(i) above and paragraph (b) below, a Member shall fill in full
all Satisfaction Orders it receives following a Trade-Through, subject to
the following limitations:
(A) No change.
(B) Notwithstanding paragraph (A) above, for a pilot period beginning on February 1, 2005 [July 1, 2004] and ending on January 31, 2006[5], if the transaction that caused the Trade-Through
occurred in the period between five minutes prior to the regularly-scheduled close of trading in the principal market in which
the underlying security is traded and the close of trading in the
Options Class, the maximum number of contracts to be satisfied with respect to any Satisfaction Order from any Participant
Exchange is 50[25] contracts.
RB24
February 9, 2005, Volume RB16, Number 6
Rule Changes,
Interpretations and
Policies continued
SR-CBOE-2005-14
Amended Fee Schedule – Transaction Fees for MNX and NDX
Options
On January 31, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-14, which
filing proposes to amend certain transactions fees for options on the Mini-Nasdaq-100 Index
(“MNX”) and the Nasdaq-100 Index (“NDX”). Any questions regarding the proposed rule
change may be directed to Jaime Galvan, Legal Division, at 312-786-7058. The text of the
amended Fee Schedule is available from the Legal Division, or can be accessed online at
www.cboe.com, under the “About CBOE” link.
SR-CBOE-2005-15
DPM Participation Entitlements
On January 31, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-15, which
filing proposes to permit the Exchange to reduce the DPM participation entitlement percentage on a product-by-product basis for newly-listed products or for products that are being
allocated to a DPM trading crowd for the first time. Any questions regarding the proposed
rule change may be directed to Angelo Evangelou, Legal Division, at 312-786-7464. The
text of the proposed rule amendments is set forth below. Proposed new language is underlined. Proposed deleted language is [stricken out]. A copy of the filing is available from the
Legal Division.
Rule 8.87 Participation Entitlements of DPMs and e-DPMs
(a) Subject to the review of the Board of Directors, the MTS Committee may establish from time to time a participation entitlement formula that is applicable to all
DPMs.
(b) The participation entitlement for DPMs and e-DPMs (as defined in Rule 8.92)
shall operate as follows:
(1) Generally.
(i) To be entitled to a participation entitlement, the DPM/e-DPM must be
quoting at the best bid/offer on the Exchange.
(ii) A DPM/e-DPM may not be allocated a total quantity greater than the
quantity that the DPM/e-DPM is quoting at the best bid/offer on the Exchange.
(iii) The participation entitlement is based on the number of contracts remaining after all public customer orders in the book at the best bid/offer on
the Exchange have been satisfied.
(2) Participation Rates applicable to DPM Complex. The collective DPM/e-DPM
participation entitlement shall be: 50% when there is one Market-Maker also quoting at the best bid/offer on the Exchange; 40% when there are two Market-Makers
also quoting at the best bid/offer on the Exchange; and, 30% when there are three
or more Market-Makers also quoting at the best bid/offer on the Exchange.
February 9, 2005, Volume RB16, Number 6
RB25
Rule Changes,
Interpretations and
Policies continued
SR-CBOE-2005-15 continued
(3) Allocation of Participation Entitlement Between DPMs and e-DPMs. The participation entitlement shall be as follows: If the DPM and one or more e-DPMs are
quoting at the best bid/offer on the Exchange, the e-DPM participation entitlement
shall be one-half (50%) of the total DPM/e-DPM entitlement and shall be divided
equally by the number of e-DPMs quoting at the best bid/offer on the Exchange.
The remaining half shall be allocated to the DPM. If the DPM is not quoting at the
best bid/offer on the Exchange and one or more e-DPMs are quoting at the best
bid/offer on the Exchange, then the e-DPMs shall be allocated the entire participation entitlement (divided equally between them). If no e-DPMs are quoting at
the best bid/offer on the Exchange and the DPM is quoting at the best bid/offer on
the Exchange, then the DPM shall be allocated the entire participation entitlement. If only the DPM and/or e-DPMs are quoting at the best bid/offer on the
Exchange (with no Market-Makers at that price), the participation entitlement shall
not be applicable and the allocation procedures under Rule 6.45A shall apply.
…Interpretations and Policies:
.01 Notwithstanding subparagraph (b)(2) above, the Exchange may establish a
lower DPM Complex Participation Rate on a product-by-product basis for newlylisted products or products that are being allocated to a DPM trading crowd for the
first time. Notification of such lower participation rate shall be provided to members through a Regulatory Circular.
RB26
February 9, 2005, Volume RB16, Number 6