April 8, 2005
Exchange
Bulletin
Volume 33, Number 14
The Constitution and Rules of the Chicago Board 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 by hard copy or e-mail 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 if applicable, mailing address, e-mail address, and phone number, to
members@cboe.com, or, by contacting the Membership Department by phone, at 312-786-7449. There is no charge for e-mail
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 after the first complimentary copy may be obtained by submitting your name, firm
if any, 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 nonmembers.
For up-to-date Seat Market Quotes, call 312-786-7456 or 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 by sending an e-mail to
members@cboe.com or by phone at 312-786-7449.
Copyright © 2005 Chicago Board Options Exchange, Incorporated
SEAT MARKET QUOTES AS OF FRIDAY, APRIL 8, 2005
CLASS
CBOE/FULL
CBOT/FULL
BID
$475,000.00
$1,410,000.00
OFFER
$494,000.00
$1,450,000.00
LAST SALE AMOUNT
$490,000.00
$1,440,000.00
LAST SALE DATE
April 8, 2005
April 6, 2005
MEMBERSHIP SALES AND TRANSFERS
From
Marcella Resnick
Ted R. Breiter
Michael S. Vanes
Larkspur Securities, Inc.
Mont R. Wickham
Larkspur Securities, Inc.
MB Partners II
Geneva Stock, LLC
To
Ilene M. Resnick Garber
Lehman Brothers Inc.
Anna L. Vanes
Lehman Brothers Inc.
Andrie Trading LLC
Lehman Brothers Inc.
Lehman Brothers Inc.
Lehman Brothers Inc.
Price/Transfer
Transfer
$444,000.00
Transfer
$444,000.00
$475,000.00
$490,000.00
$495,000.00
$490,000.00
Date
4/1/2005
4/1/2005
4/1/2005
4/4/2005
4/7/2005
4/7/2005
4/7/2005
4/8/2005
Information Circular IC05-45
To:
From:
Re:
Date:
CBOE Members and Applicants for Membership
Membership Committee
Membership Committee Meeting Schedule and Application Submission Deadline
April 6, 2005
Membership Committee Meeting Schedule:
The regularly scheduled Membership Committee meeting dates for the remainder of calendar year 2005 are as follows:
May 18, 2005
June 22, 2005
July 20, 2005
August 17, 2005
September 21, 2005
October 19, 2005
November 16, 2005
December 14, 2005
Application Submission Deadline for New Members and Associated Persons:
All required information and documentation for applications by new members and associated persons must be submitted to the Membership
Department no later than the 25th day of the month prior to the month in which the application will be considered by the Committee.
In the event that the submission deadline falls on a non-business day, the deadline will be the previous business day.
Any questions regarding this circular may be directed to Stan Leimer, Director, Membership Department (312-786-7299), or Regina Millison,
Manager, Membership Department (312-786-7452).
Page 2
April 8, 2005
Volume 33, Number 14
Chicago Board Options Exchange
April 7, 2005
DPM APPOINTMENT TRANSFER PROPOSAL
This notice is given in accordance with the procedures utilized by the MTS Committee under CBOE Rule 8.89 in considering DPM
appointment transfer proposals. Under Rule 8.89, the MTS Committee posts notice of any proposal by a DPM involving greater than
a nominal transfer of interest in the DPM’s organization. During the posting period, members may submit to the MTS Committee
written comments and/or written alternative proposals. Following the posting period, the MTS Committee will determine what action
to take regarding the proposal based on the factors enumerated in Rule 8.89 and the accompanying guidelines issued by the Board of
Directors. The MTS Committee has not yet made any determination regarding whether to approve or disapprove the proposal described below, and the posting of the proposal does not imply that the MTS Committee has reached a particular determination with
respect to the proposal.
The MTS Committee has received a proposal from Equitec-Feldman, LLC (“Equitec-Feldman”), a member organization operating as a DPM,
regarding a transfer of ownership interest percentages. The Equitec-Feldman DPM is located on the main trading floor at Post - 2 Station 5.
Currently, the Class A ownership structure of Equitec-Feldman is as follows: Equitec Group, LLC (“Equitec”) - 100%.
Under the proposal: (1) Rightside Trading, LP (“Rightside”) would be added as a Class B member; (2) Rightside will manage the trading activity
and other day-to-day affairs of Equitec-Feldman; and (3) Equitec-Feldman’s name would be changed to “Equitec RS, LLC.”
Any written comments and/or alternative written proposals must be received by the MTS Committee, in care of Daniel Hustad, Business Development Division (312-786-7715), on or before April 20, 2005. Unless otherwise requested, any written comments and/or
alternative written proposals will be made available for review by the membership. For additional information regarding this posting,
please contact Daniel Hustad at the number provided above.
MEMBERSHIP INFORMATION FOR 3/31/05 THROUGH 4/6/05
MEMBERSHIP APPLICATIONS RECEIVED FOR
Lessor: Lehman Brothers Inc.
WHICH A POSTING PERIOD IS REQUIRED
Lessee:
MEMBERSHIP LEASES
Rate:
New Leases
Effective Date
Lessor:
Lessee:
Lessor:
Lessee:
Patrick F. Girondi
Bear Wagner Specialists LLC
David S. Levinsky, NOMINEE
0.875%
Term: Monthly
3/31/05
Rate:
4/1/05
Rate:
Ilene M. Resnick Garber
SMC Option Management LLC
Mark Severin, NOMINEE
0.875%
Term: Monthly
Lessor:
Lessee:
Rate:
Anthony J. Goldish
Gary S. Bell
0.875%
Term: Monthly
4/1/05
Lessor:
Lessee:
Donald I. Goldstein
Consolidated Trading, LLC
Christopher T. Steiner, NOMINEE
0.875%
Term: Monthly
4/1/05
James M. Kelley
G-Bar Limited Partnership
Nicholas M. Theodorakos, NOMINEE
0.75%
Term: Monthly
4/1/05
Abe J. Matthew
DRO WST Trading LLC
Matthew H. Bentley, NOMINEE
0.875%
Term: Monthly
4/1/05
Pax Acquisition Corporation
Gelber Securities, LLC
Brian R. Gelber, NOMINEE
0.875%
Term: Monthly
4/1/05
CCD #1, Inc.
Blue Capital Asset Management LLC
Lorry A. Lichtenstein, NOMINEE
0.8128%
Term: Monthly
4/1/05
Anna L. Vanes
Cassandra Trading Group, LLC
Frank A. Hirsch, NOMINEE
0.75%
Term: Monthly
4/1/05
Rate:
Lessor:
Lessee:
Rate:
Lessor:
Lessee:
Rate:
Lessor:
Lessee:
Rate:
Lessor:
Lessee:
Rate:
Lessor:
Lessee:
Rate:
Lessor:
Lessee:
Rate:
Lessor:
Lessee:
Rate:
Lessor:
Lessee:
Rate:
Lessor:
Lessee:
Rate:
Lessor:
Lessee:
Rate:
Effective Date
4/4/05
Prospect Trading LLC
Martin L. Dim, NOMINEE
$1,904.76
Term: Monthly
Patrick J. English
Sunset Securities LLC
Michael N. Suarez, NOMINEE
0.875%
Term: Monthly
4/4/05
Newcastle Financial LLC
Ronin Capital, LLC
Jerry E. Diegel, NOMINEE
0.8128%
Term: Monthly
4/4/05
Goliath Group, LLC
Mercury Trading, Inc.
Peter Najarian, NOMINEE
0.8128%
Term: Monthly
4/4/05
Arclight Securities, LLC
Raymond P. Dempsey Inc.
Raymond P. Dempsey, NOMINEE
0.8128%
Term: Monthly
4/6/05
M.B. Partners II
Edgewater Partners, LLC
Craig R. Barone, NOMINEE
0.875%
Term: Monthly
4/6/05
Terminated Leases
Termination Date
Lessor:
Lessee:
Bernard J. McDermott
Tradelink LLC
3/31/05
Lessor:
Lessee:
Abe J. Matthew
Samuelson Trading Corporation
4/1/05
Lessor:
Lessee:
Donald I. Goldstein
AB Financial LLC
Thomas P. Tiernan (TJT), NOMINEE
4/1/05
Lessor:
Lessee:
Michael S. Vanes
Frank A. Hirsch (FAH)
4/1/05
Lessor:
Lessee:
Susquehanna Investment Group
Susquehanna Securities
Benjamin Dekker (BDK), NOMINEE
4/1/05
Page 3
April 8, 2005
Volume 33, Number 14
Termination Date
Chicago Board Options Exchange
MEMBERSHIP TERMINATIONS
Lessor:
Lessee:
Patrick J. English
Cornerstone Trading, LLC
William J. O’Keefe (BOK), NOMINEE
4/1/05
Lessor:
Lessee:
CCD #1, Inc.
Arctic Trading, LLC
Richard M. Coplan (COP), NOMINEE
4/1/05
CBT Exercisers:
Termination Date
4/6/05
Lessor:
Lessee:
AB Financial LLC
Gary S. Bell (GCA)
4/1/05
Greg P. Farrall (TEG)
440 S. LaSalle - Ste. 1586
Chicago, IL 60605
Lessor:
Lessee:
Newcastle Financial LLC
Commercial Crush Trading, LLC
4/1/05
CBT Registered For:
Termination Date
4/5/05
Lessor:
Lessee:
Robert G. Martin
Mercury Trading, Inc.
Peter Najarian (NFX), NOMINEE
4/1/05
Lawrence M. Shover (LMS)
The Hermitage Group, LLC
10 S. LaSalle - #2300
Chicago, IL 60603
Lessor:
Lessee:
Credit Suisse First Boston LLC
4/1/05
Merrill Lynch, Pierce, Fenner & Smith, Inc.
Ronald A. Myers (CPT), NOMINEE
Lessor(s):
Termination Date
4/1/05
Lessor:
Lessee:
PEAK6 Capital Management LLC
4/1/05
G-Bar Limited Partnership
Nicholas M. Theodorakos (NMT), NOMINEE
Marcella Resnick
382 Kelburn Rd. - Apt. 323
Deerfield, IL 60015
4/1/05
Lessor:
Lessee:
Cassandra Trading Group, LLC
Blue Capital Group LLC
4/1/05
Michael S. Vanes
430 Whittier Lane
Northfield, IL 60093
Marcella Resnick
SMC Option Management LLC
Mark Severin (CEV), NOMINEE
4/1/05
Ted R. Breiter
1820 Lawrence Lane
Highland Park, IL 60035
4/4/05
Lessor:
Lessee:
Lessor:
Lessee:
Pax Acquisition Corporation
Sallerson-Troob LLC
4/1/05
Nominee(s) / Inactive Nominee(s):
Termination Date
3/31/05
Lessor:
Lessee:
Mario D’Agostino
Citigroup Derivatives Markets Inc.
4/1/05
R. James Relihan (RJR)
Samuelson Trading Corporation
440 S. LaSalle - Ste. 1124
Chicago, IL 60605
Lessor:
Lessee:
Anthony J. Goldish
Sallerson-Troob LLC
4/1/05
3/31/05
Lessor:
Lessee:
Apollo Partners LP
4/1/05
Citadel Derivatives Group LLC
James M. Jacobsen (JAM), NOMINEE
Gary L. Anderson (GLA)
Centurion Securities, LLC
1818 Market Street, 18th Floor
Philadelphia, PA 19103
James B. Burns (JBZ)
First Derivative Traders, LP
440 S. LaSalle, Ste. #3100
Chicago, IL 60605
4/1/05
Thomas P. Hough (DAH)
TD Professional Execution Inc.
230 S. LaSalle - Ste. 688
Chicago, IL 60604
4/1/05
Andrew B. Newmark (NUM)
Sallerson-Troob LLC
440 S. LaSalle - Ste. 950
Chicago, IL 60605
4/5/05
Michael A. Klaus (KLS)
Equitec Structured Products, LLC
111 W. Jackson - 20th Flr.
Chicago, IL 60604
4/6/05
Brian M. Connelly (BCC)
CMZ Trading, LLC
230 S. LaSalle - 7th floor
Chicago, IL 60604
4/6/05
Jack E. Brothers Jr. (KCJ)
Quiet Light Securities LLC
988 S. Hampton Ct.
Aurora, IL 60506
4/6/05
Individual Members
Lessor:
Lessee:
Joseph Klopfer Investments Inc.
Citigroup Derivatives Markets Inc.
Sean S. Truett (SLA), NOMINEE
4/1/05
Lessor:
Lessee:
James M. Kelley
PEAK6 Capital Management LLC
Jeff A. Schleusner (SLU), NOMINEE
4/1/05
Lessor:
Lessee:
AB Financial LLC
Gelber Securities, LLC
Brian R. Gelber (GEL), NOMINEE
4/1/05
Lessor:
Lessee:
Ted R. Breiter
Prospect Trading LLC
Martin L. Dim (MLD), NOMINEE
4/4/05
Lessor:
Lessee:
M.B. Partners II
Third Millennium Trading, LLC
4/6/05
Lessor:
Lessee:
Larkspur Securities, Inc.
4/6/05
Raymond P. Dempsey Inc.
Raymond P. Dempsey (SOX), NOMINEE
Page 4
April 8, 2005
Volume 33, Number 14
Member Organizations
Lessor(s):
Termination Date
Apollo Partners LP
Jon Najarian
411 S. Wells, Penthouse
Chicago, IL 60607
4/1/05
EFFECTIVE MEMBERSHIPS
Chicago Board Options Exchange
Effective Date
Craig R. Barone (CRB)
4/6/05
Edgewater Partners, LLC
440 S. LaSalle, Ste. 3100
Chicago, IL 60605
Type of Business to be Conducted: Market Maker
CBT Registered For:
Effective Date
FWT Options LLC
440 S. LaSalle, Ste. 3100
Chicago, IL 60605
Type of Business to be Conducted: Market Maker
4/1/05
Bit Enterprises Inc.
855 Sheridan Road
Highland Park, IL 60035
Type of Business to be Conducted: Market Maker
4/4/05
Lessee(s):
Effective Date
CBT Registered For:
Effective Date
William J. Terman (BIT)
Bit Enterprises Inc.
440 S. LaSalle - Ste. 3100
Chicago, IL 60605
Type of Business to be Conducted: Market Maker
4/4/05
Lessor(s):
Effective Date
4/1/05
Blue Capital Asset Management LLC
790 Estate Drive, Suite 250
Deerfield, IL 60015
Type of Business to be Conducted: Market Maker
4/1/05
Anna L. Vanes
430 Whittier Lane
Northfield, IL 60093
Type of Business to be Conducted:
Effective Date
Edgewater Partners, LLC
1833 W. Roscoe St.
Chicago, IL 60657
Type of Business to be Conducted: Market Maker
4/6/05
Nominee(s) / Inactive Nominee(s):
Lessor(s):
Effective Date
Goliath Group, LLC
411 S. Wells, Penthouse
Chicago, IL 60607
Type of Business to be Conducted:
4/1/05
Joseph D. Mueller (JKM)
3/31/05
SLK-Hull Derivatives LLC
440 S. LaSalle
Chicago, IL 60605
Type of Business to be Conducted: Market Maker/Floor Broker
Joseph R. Dawczak (AAD)
Samuelson Trading Corporation
440 S. LaSalle, Ste. #1124
Chicago, IL 60604
Type of Business to be Conducted: Market Maker
3/31/05
JOINT ACCOUNTS
David S. Levinsky (DSL)
3/31/05
Bear Wagner Specialists LLC
141 W. Jackson, Ste. 4132
Chicago, IL 60604
Type of Business to be Conducted: Market Maker/Floor Broker
Matthew H. Bentley (MHB)
DRO WST Trading LLC
440 S. LaSalle - Ste. 2500
Chicago, IL 60605
Type of Business to be Conducted: Market Maker
4/1/05
Andrew B. Newmark (NUM)
Sallerson-Troob LLC
440 S. LaSalle - Ste. 950
Chicago, IL 60605
Type of Business to be Conducted: Market Maker
4/4/05
Michael N. Suarez (ILL)
Sunset Securities LLC
3800 N. Bell - #3
Chicago, IL 60618
Type of Business to be Conducted: Market Maker
4/4/05
Jerry E. Diegel (DGL)
Ronin Capital, LLC
371 S. Clyde Ct.
Palatine, IL 60067
Type of Business to be Conducted: Market Maker
4/4/05
John C. Halston (HJC)
Quiet Light Securities LLC
141 W. Jackson - Ste. 2020A
Chicago, IL 60604
Type of Business to be Conducted: Market Maker
4/6/05
New Participants
Acronym
Effective Date
David S. Levinsky
QWS
3/31/05
Benjamin R. Scott
QUR
3/31/05
Jerry E. Diegel
QHS
4/4/05
Jerry E. Diegel
QRV
4/4/05
Harry E. Schayer
QWZ
4/6/05
New Accounts
Acronym
Effective Date
Brian Huddleston
QOB
4/4/05
Michael N. Suarez
QOB
4/4/05
Terminated Participants
Acronym
Termination Date
Michael C. Bernard
QSZ
4/1/05
Raymond W. Boesen
QSZ
4/1/05
Katrina L. Katzenberger
QEW
4/1/05
Katrina L. Katzenberger
QFS
4/1/05
Katrina L. Katzenberger
QGS
4/1/05
Katrina L. Katzenberger
QIS
4/1/05
Katrina L. Katzenberger
QJY
4/1/05
Katrina L. Katzenberger
QMD
4/1/05
Page 5
April 8, 2005
Volume 33, Number 14
Katrina L. Katzenberger
QMP
Katrina L. Katzenberger
QNA
4/1/05
Katrina L. Katzenberger
QNY
4/1/05
Katrina L. Katzenberger
QPN
4/1/05
Katrina L. Katzenberger
QPO
4/1/05
Katrina L. Katzenberger
QUT
4/1/05
Katrina L. Katzenberger
QVA
4/1/05
Katrina L. Katzenberger
QYH
4/1/05
Katrina L. Katzenberger
QYS
4/1/05
Katrina L. Katzenberger
QLO
4/1/05
Katrina L. Katzenberger
QSM
4/1/05
John Ferro
QYA
4/1/05
Lawrence M. Shover
QFB
4/5/05
Brian M. Connelly
QWQ
4/6/05
Jack E. Brothers Jr.
QHD
4/6/05
Terminated Accounts
Acronym
Termination Date
James B. Burns
QPR
4/1/05
Termination Date
4/1/05
CHANGES IN MEMBERSHIP STATUS
Individual Members
Effective Date
John A. Possidoni
4/1/05
From:
CBT Registered For AB Financial LLC; Market Maker
To:
Nominee For AB Financial LLC; Market Maker
David G. MacKimm
4/1/05
From:
CBT Registered For Citadel Derivatives Group LLC;
Market Maker
To:
Nominee For Citadel Derivatives Group LLC; Market
Maker/ Floor Broker
Richard M. Coplan
4/1/05
From:
Nominee For Arctic Trading, LLC; Market Maker
To:
CBT Registered For Arctic Trading, LLC; Market Maker
Chicago Board Options Exchange
Effective Date
Frank A. Hirsch
4/1/05
From:
Lessee; Market Maker
To:
Nominee For Cassandra Trading Group, LLC; Market
Maker
John Ferro
4/1/05
From:
Lessor/Nominee For G-Bar Limited Partnership; Market
Maker
To:
Lessor
Member Organizations
Effective Date
Cassandra Trading Group, LLC
4/1/05
From:
Lessor/ Member Organization Affiliated with a CBT
Registered For; Associated with a Market Maker/Floor
Broker
To:
Lessee/ Member Organization Affiliated with a CBT
Registered For; Associated with a Market Maker/Floor
Broker
Citadel Derivatives Group LLC
4/1/05
From:
Lessor/Owner/Lessee/Member Organization Affiliated
with a CBT Registered; Associated with a Market Maker
To:
Lessor/Owner/Lessee/Member Organization Affiliated
with CBT Registered For; Associated with a Market
Maker/Floor Broker
AB Financial LLC
4/1/05
From:
Lessor/Owner/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
Artic Trading LLC
4/1/05
From:
Lessee; Associated with a Market Maker
To:
Member Organization Affiliated with a CBT Registered
For; Associated with a Market Maker
Peak6 Capital Management LLC
4/1/05
From:
Lessor/Lessee; Associated with a Market Maker
To:
Owner; Associated with a Market Maker
Susquehanna Securities
4/1/05
From:
Lessee; Associated with a Market Maker
To:
Member Organization Affiliated with a CBT Registered
For; Associated with a Market Maker
MEMBER ADDRESS CHANGES
Individual Members
Effective Date
Joshua J. Stoner
2701 W. Ainslie St., Apt. 2
Chicago, IL 60625
4/5/05
Frank W. Tabachka Jr.
4/1/05
From:
CBT Exerciser; Market Maker
To:
CBT Registered For FWT Options LLC; Market Maker
Robert S. Drozd
440 S. LaSalle - Ste. 2500
Chicago, IL 60605
4/5/05
Benjamin Dekker
4/1/05
From:
Nominee For Susquehanna Securities; Market Maker
To:
Nominee For Susquehanna Investment Group; Market
Maker/Floor Broker
Antanas Siurna
440 S. LaSalle - Ste. 2500
Chicago, IL 60605
4/5/05
David P. Dunagan
440 S. LaSalle - Ste. 2500
Chicago, IL 60605
4/5/05
Daniel J. Hurley
440 S. LaSalle, Ste. 751
Chicago, IL 60605
4/6/05
Katrina L. Katzenberger
4/1/05
From:
CBT Registered For Susquehanna Investment Group;
Market Maker/ Floor Broker
To:
CBT Registered For Susquehanna Securities; Market
Maker
Christopher T. Steiner
4/1/05
From:
CBT Registered For Consolidated Trading, LLC; Market
Maker
To:
Nominee For Consolidated Trading, LLC; Market Maker
Lorry A. Lichtenstein
4/1/05
From:
Nominee For Blue Capital Group LLC; Market Maker
To:
Nominee For Blue Capital Asset Management LLC;
Market Maker
Page 6
April 8, 2005
Volume 33, Number 14
Member Organizations
Effective Date
M.O.E. Options Inc.
8929 S. Hamilton
Chicago, IL 60620
4/1/05
RCI Limited Partnership
Attn: Fred Rice
4170 Conkle Rd.
Boyne City, MI 49712-9412
4/5/05
Chicago Board Options Exchange
RESEARCH CIRCULARS
The following Research Circulars were distributed between April 1 and April 7, 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 #RS05-199
April 1, 2005
Retail HOLDRs Trust (“RTH”) Cash Distribution
Ex-Distribution Date: April 4, 2005
Research Circular #RS05-200
April 1, 2005
Temple-Inland, Inc. (“TIN/YDE”)
2-for-1 Stock Split
Ex-Distribution Date: April 4, 2005
Research Circular #RS05-204
April 4, 2005
*****UPDATE – RECORD DATE AND EX-DIVIDEND DATE
CHANGED*****
Companhia Siderurgica Nacional (“SID”)
CONTRACT ADJUSTMENT FOR CASH DIVIDEND
Ex-Date: May 2, 2005
Research Circular #RS05-206
April 4, 2005
Retek Inc. (“RETK/QRD”)
Tender Offer AMENDED by Ruby Merger Corp.
Research Circular #RS05-207
April 4, 2005
NeighborCare, Inc. (“NCRX/QNY”)
Tender Offer FURTHER EXTENDED by Omnicare, Inc.
(“OCR”)
Research Circular #RS05-208
April 4, 2005
VERITAS Software Corporation (“VRTS/VIV/YQM/OFQ”)
Underlying Symbol Change to “VRTSE”
Effective Date: April 5, 2005
Research Circular #RS05-209
April 5, 2005
Headwaters Incorporated (“HDWR/HQK”)
Stock and Option Symbol Change to “HW”
Effective Date: April 6, 2005
Research Circular #RS05-210
April 5, 2005
*****UPDATE*****UPDATE*****UPDATE*****
Metro–Goldwyn–Mayer Inc. (“MGM/YOV/OCK”) Proposed
Merger
with LOC Acquisition Company
Research Circular #RS05-211
April 6, 2005
CTI Molecular Imaging, Inc. (“CTMI/QPQ”)
Tender Offer by MI Merger Co.
Research Circular #RS05-213
April 6, 2005
AMX Corporation (“AMXC/AQP”)
Subsequent Tender Offer by Amherst Acquisition Co.
Research Circular #RS05-215
April 6, 2005
Impax Laboratories, Inc. (“IPXL/UPR”)
Underlying Symbol Change to “IPXLE”
Effective Date: April 7, 2005
Research Circular #RS05-216
April 6, 2005
BioLase Technology, Inc. (“BLTI/BQF”)
Underlying Symbol Change to “BLTIE”
Effective Date: April 7, 2005
Research Circular #RS05-217
April 6, 2005
Viisage Technology, Inc. (“VISG/TUM”)
Underlying Symbol Change to “VISGE”
Effective Date: April 7, 2005
Research Circular #RS05-218
April 6, 2005
UTStarcom, Inc. (“UTSI/UON/WQZ/OEU”)
Underlying Symbol Change to “UTSIE”
Effective Date: April 7, 2005
Research Circular #RS05-219
April 7, 2005
Nara Bancorp, Inc. (“NARA/QAN”)
Underlying Symbol Change to “NARAE”
Effective Date: April 7, 2005
April 13, 2005
Volume RB16, Number 15
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
Regulatory
Circulars
Regulatory Circular RG05-35
Date:
March 31, 2005
To:
The Membership
From:
Financial Planning Committee
Subject:
Fee Reductions for April 2005
CBOE has averaged approximately 1,505,000 contracts per day (CPD) during the period
July 2004 through March 2005.
Per the Prospective Fee Reduction Program, Market-Maker and DPM transaction fees and
floor brokerage fees will be reduced by 20% per contract from standard rates during April
2005 (March 2005 discounts were 15%).
Fee
Equities Market-Maker Trans. Fee
Equities DPM Trans. Fee
QQQQ, SPY & Indexes Mrkt. Maker/DPM (1)
Trans. Fee
Floor Brokerage Fee
Standard
Rate
April ‘05
Rate
22 cents
12 cents
24 cents
17.6 cents
9.6 cents
(1) 19.2 cents
4 cents
3.2 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 Circulars
continued
Regulatory Circular RG05-36
Date:
March 31, 2005
To:
The Membership
From:
Accounting
Subject:
Enhanced Dividend Spread Fee Cap Pilot Program
Regulatory Circular RG05-31 dated March 2, 2005 detailed an enhancement to CBOE’s
dividend spread fee cap program. The purpose of this circular is to inform you the program
is a pilot expiring September 1, 2005 and the effective date of the enhanced pilot program
was March 2, 2005.
Key details of the program are detailed below, for your information.
Effective March 2, 2005, the program is enhanced by capping transaction fees at $2,000
for all dividend spreads executed on the same trading day for the same class.
In order to benefit from the fee cap, a standard rebate request form with supporting documentation (e.g. clearing firm transaction data) must be submitted to CBOE Accounting
within 30 days of the dividend spread trade date. Rebate request forms are available on the
CBOE members website (cboe.com) or on the 6th floor in Accounting.
Rebates will be processed via a credit to the member’s clearing firm at month-end. Clearing
firms will see the rebate credits as a separate item on monthly CBOE billing statements.
The $2,000 fee cap applies to CBOE transaction fees and excludes any marketing fee
assessments. As you are aware, certain marketing fees are rebated when a market maker
trades with another Market-Maker. This Market-Maker to Market-Maker marketing fee rebate is processed separately.
Please contact Don Patton at 312-786-7026 or patton@cboe.com if you have any questions.
Regulatory Circular RG05-37
To:
Member Organizations
From:
Division of Regulatory Services
Date:
April 6, 2005
Subject:
Margin Requirements for Certain Complex Spreads
Exchange
Contacts:
James Adams
•
•
•
RB2
(312) 786-7718
KEY POINTS
Certain complex option spreads (specified below) are the equivalent of combining
two or more spreads that are currently recognized in the margin rules of the Chicago Board Options Exchange (the “Exchange” or “CBOE”).
Because these complex spreads can be shown to equate to aggregations of two
or more currently recognized spreads, current margin rules are deemed to provide
a margin requirement for each complex spread in that the rules provide a margin
requirement for each spread in the equivalent aggregation.
Member organizations may require margin for these complex spreads of not less
than the sum of the margin required on each spread in the equivalent aggregation.
April 13, 2005, Volume RB16, Number 15
Regulatory Circulars
continued
Regulatory Circular RG05-37 continued
•
The margin requirements set forth in this Regulatory Circular will be in effect as a
pilot until February 7, 2006 or until such time as the Securities and Exchange
Commission (“Commission”) has approved permanent implementation of these
margin requirements, whichever occurs sooner.
DISCUSSION
It is known that certain complex spread configurations are the net result of combining two or
more spread strategies that are currently recognized in the Exchange’s margin rules. Specific complex spread configurations are listed below, along with the currently recognized
spreads to which they can be traced. The expiration months, exercise prices, interval
between exercise prices, and option premiums used in each configuration are for illustration
only. However, as illustrated, the expiration months and sequence of the exercise prices
must fit the same pattern, and the intervals between the exercise prices must be equal.
Note that netting of contracts in option series common to each of the currently recognized
spreads in an aggregation reduces it to the complex spread.
April 13, 2005, Volume RB16, Number 15
RB3
Regulatory Circulars
continued
Regulatory Circular RG05-37 continued
Feb 45
@ .5
PUTS
Feb 50
@1
Feb 55
@2
Feb 45
@ 16.5
Long Butterfly
Long Butterfly
Net – Configuration I
Feb 50
@ 12
1
1
Long Butterfly
Short Box
Net – Configuration II
1
1
Long Butterfly
Long Butterfly
Short Box
Net – Configuration III
1
-1
-1
-1
1
1
1
-1
-1
CALLS
Feb 55 Feb 60
@8
@6
Feb 65
@5
-2
1
-1
1
-2
-1
1
1
-2
1
-1
1
-2
1
1
-1
Long Time Spread
Long Butterfly
Net – Configuration IV
1
1
-2
-2
Long Time Spread
Long Butterfly
Long Butterfly
Net – Configuration V
1
-2
-1
-2
1
-1
1
-1
-2
1
-1
1
1
Long Time Spread
Long Butterfly
Short Box
Net – Configuration VI
Long Time Spread
Long Butterfly
Long Butterfly
Short Box
Net – Configuration VII
1
1
1
1
-1
-1
-1
-1
1
-1
1
-2
1
-2
1
-1
Apr 60
@7
1
1
-2
1
-1
1
-1
1
1
1
-1
1
1
1
-1
1
1
1
-1
1
1
1
As illustrated above, the complex spread configurations equate to aggregations of currently recognized spreads.
Therefore, for complex spreads fitting the above configurations, whether established outright or through netting,
member firms must require initial and maintenance margin of not less than the sum of the margin required on
each of the currently recognized spreads in the applicable aggregation subject to the following limitations:
RB4
•
the complex spread must be carried in a margin account,
•
European style options are not permitted for the configurations involving time spreads (IV through VII),
•
the intervals between exercise prices must be equal, and
•
each complex spread must comprise four option series, except for Configuration IV, which must comprise three option series.
April 13, 2005, Volume RB16, Number 15
Regulatory Circulars
continued
Regulatory Circular RG05-37 continued
Summing the margin required on each currently recognized spread in each of the applicable
aggregations renders a margin requirement for the subject complex spread configurations
as follows:
Configuration
I
II
III
IV
V
VI
VII
Margin Requirement
Pay for the net debit in full
Exercise price interval (aggregate), net credit may be applied
Exercise price interval (aggregate), net credit may be applied
Pay for the net debit in full
Pay for the net debit in full
Exercise price interval (aggregate), net credit may be applied
Exercise price interval (aggregate), net credit may be applied
Using Configuration III as an example, the margin requirement and SMA debit or margin call
would be as follows:
PUTS
Feb 50
@1
Long Butterfly #1
Long Butterfly #2
Short Box #1
Net – Configuration III
1
1
Margin Calculation:
Feb 55
@2
-1
-1
CALLS
Feb 50
@ 12
Feb 55
@8
Feb 60
@6
Feb 65
@5
1
-2
1
1
1
-2
1
-1
-1
$5.00 x 1 contract x 100 shares =
Margin Requirement:
SMA Debit or Margin Call:
1
$500.00
$500.00
$500.00 - $200.00 =
$300.00
Explanation: The initial and maintenance margin requirement is the exercise price
interval (aggregate). Establishing this complex spread results in a net credit of
$200.00 that may be applied to the margin requirement.
As shown in the table below, the same margin requirement, and SMA debit or margin call,
would result by taking the sum of the margin required on each spread in the equivalent
aggregation.
Net
dr or cr
Margin
Req.
Deposit
Long Butterfly
Long Butterfly
Short Box #1
$200 dr
$100 dr
$500 cr
0
0
$500
$200
$100
$0
Total
$200 cr
$500
$300
The margin requirements set forth in this Regulatory Circular will be in effect as a pilot until
February 7, 2006 or until such time as the Commission has approved permanent implementation of these margin requirements, whichever occurs sooner.
Questions regarding margin requirements should be directed to James Adams at (312) 786–
7718.
Regulatory Circular RG04-90 (Revised)
April 13, 2005, Volume RB16, Number 15
RB5
Rule Changes,
Interpretations
and Policies
APPROVED RULE CHANGE(S)
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 on the CBOE public website at www.cboe.com/
legal/effectivefiling.aspx.
The effective date of the rule change is the date of approval unless otherwise noted.
SR-CBOE-2005-16
Margin Requirements for Complex Options Spreads
On March 22, 2005, the SEC approved Rule Change File No. SR-CBOE-2005-16, which
filing extends a pilot program permitting an interpretation to CBOE Rule 12.3 relating to
margin requirements for certain complex options spreads (Securities Exchange Act Release No. 51407, 70 FR 15669 (March 28, 2005)). Any questions regarding the rule change
may be directed to Jaime Galvan, Legal Division, at 312-786-7058. The text of the amended
rules is set forth in Regulatory Circular RG05-37, and can be accessed online at https://
www.cboe.org/publish/RegCir/RG05-037.pdf.
SR-CBOE-2005-18
Modified Fee Cap on Dividend Spread Transactions
On April 1, 2005, the SEC approved Rule Change File No. SR-CBOE-2005-18, which filing
modifies a fee cap on options dividend spread transactions and updates the symbol for the
Nasdaq-100 Index Tracking Stock. The fee cap program will be in effect as a pilot program
that will expire on 9/1/05. Any questions regarding the rule change may be directed to
Jaime Galvan, Legal Division, at 312-786-7058. The text of the amended rules is set forth
in Regulatory Circular RG05-36, and can be accessed online at https://www.cboe.org/
publish/RegCir/RG05-036.pdf.
PROPOSED RULE CHANGE(S)
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
change(s) with the Securities and Exchange Commission (“SEC”). Copies of the rule
change filing(s) are available at www.cboe.com/legal/submittedsecfilings.aspx. 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-2005-28
DPM Backup Autoquote System Obligations
On March 31, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-28, which
filing proposes to eliminate from CBOE rules, a DPM’s obligation to maintain a backup
autoquote system. Any questions regarding the proposed rule change may be directed to
Jim Flynn, Legal Division, at 312-786-7070. The text of the proposed rule amendments is
set forth below. Proposed new language is underlined. Proposed deleted language is
[stricken out].
Rule 8.85 – DPM Obligations
Rule 8.85 (a) Dealer Transactions. Each DPM shall fulfill all of the obligations of a
Market-Maker under the Rules, and shall satisfy each of the following requirements 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 (a)(i) through (a)(xi) of this Rule and the general obligations of a
Market Maker under the Rules, subparagraphs (a)(i) through (a)(xi) of this Rule
shall govern. Each DPM shall:
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April 13, 2005, Volume RB16, Number 15
Rule Changes,
Interpretations and
Policies continued
SR-CBOE-2005-28 continued
(i) – (x) No change.
[(xi) in the case of a DPM utilizing a proprietary autoquote system in a non-CBOE
Hybrid System class, assure that the Exchange’s AutoQuote system is maintained as a back-up at all times and ready for immediate use.
(xii) in the case of a DPM utilizing a proprietary autoquote system in a Hybrid
System class, the DPM must have available for immediate use an alternative
autoquote system that is entirely independent of the DPM’s primary autoquote
system.]
(b) – (e)
No change.
*****
... Interpretations and Policies:
.01- .04
No change.
****
Rule 17.50 - Imposition of Fines for Minor Rule Violations
(a)-(f)
No change.
(g)
The following is a list of the rule violations subject to, and the applicable
fines that may be imposed by the Exchange pursuant to this Rule:
(1)- (9)
No change.
[(10) Violations of DPM Obligation to Assure that a Back-Up Auto Quote System is Maintained at all Times. (Rules 8.85(a)(xi) and (xii))
(a) A fine shall be imposed upon a DPM that fails to assure that disseminated
market quotations are accurate for any given trading station because of a failure of
the DPM’s proprietary autoquote system during market hours coupled with the
DPM’s failure to maintain a back-up autoquote system.
Number of Violations
in any Rolling Twelve-Month Period
Fine Amount
1st Offense..........................................................$100 to $2,500 or Referral to
Business Conduct Committee
2nd - 3rd Offense..................................................$100 to $5,000 or Referral to
Business Conduct Committee
Subsequent Offenses...........................................Referral to Business Conduct
Committee]
April 13, 2005, Volume RB16, Number 15
RB7
Rule Changes,
Interpretations and
Policies continued
SR-CBOE-2005-28 continued
[(11)](10) Communications to the Exchange or the Clearing Corporation
(Rule 4.11)
No change.
****
... Interpretations and Policies:
.01- .04 No change.
*****
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April 13, 2005, Volume RB16, Number 15