October 21, 2005
Exchange
Bulletin
Volume 33, Number 42
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 (January 1 through
December 31) is $200.00 ($100.00 after July 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, OCTOBER 21, 2005
CLASS
CBOE
BID
OFFER
$651,000.00
LAST SALE AMOUNT
$699,000.00
LAST SALE DATE
$650,000.00
October 19, 2005
CBOT FULL MEMBERSHIP
CLASS
BID
With CBOE Exercise Right
$2,650,000.00
Without CBOE Exercise Right
$2,150,000.00
CBOE Exercise Right
$90,000.00
OFFER
LAST SALE AMOUNT
$2,965,000.00
$0.00
$125,000.00
LAST SALE DATE
$2,600,000.00
October 21, 2005
$2,380,000.00
October 20, 2005
$100,000.00
October 13, 2005
CBOE MEMBERSHIP SALES AND TRANSFERS
From
The Michas Family Limited Partnership
Charles J. Peres
To
Timothy G. Keller
Steve Fanady
Price/Transfer
$625,000.00
$650,000.00
Date
10/18/05
10/19/05
DPM APPOINTMENT TRANSFER APPROVAL – October 17, 2005
The MTS Committee has conditionally approved pursuant to CBOE Rule 8.89 a proposal from SLK-Hull Derivatives, LLC (“SHD”), a member
organization approved to operate as a DPM, regarding a transfer of its DPM appointments to PEAK6 Capital Management LLC (“PEAK6”).
The SHD DPMs are located at Post 1 - Station 4, Post 1 – Station 5, Post 1 – Station 9, and Post 1 – Station 10.
The current PEAK6 ownership structure is as follows: PEAK6 Investments LP - 100%, the General Partner of which is PEAK6, LLC.
Under the proposal, SHD would transfer all of its DPM appointments to PEAK6 and several SHD personnel also will be transferring to
PEAK6. Gavin Lowrey would oversee PEAK6’s DPM operations.
Page 2
October 21, 2005
Volume 33, Number 42
Chicago Board Options Exchange
MEMBERSHIP INFORMATION FOR 10/13/05 THROUGH 10/19/05
MEMBERSHIP APPLICATIONS RECEIVED FOR Member Organizations
WHICH A POSTING PERIOD IS REQUIRED
Lessor(s):
Termination Date
The Michas Family Limited Partnership
1148 Fifth Avenue
New York, NY 10128
10/19/05
Individual Membership Applicants
Date Posted
David C. Lempa, Nominee
Blue Capital Group LLC
14926 S. Lawndale
Midlothian, IL 60445
10/17/05
Member Organization Applicants
Date Posted
New Participants
Acronym
Effective Date
Fanmare
7449 N. Lowell
Skokie, IL 60076
Steve Fanady – General Partner
10/18/05
James W. Moore
QWV
10/14/05
Timothy C. Womack
QJG
10/17/05
JOINT ACCOUNTS
AJD Trading LLC
10/19/05
70 Canyon View Circle
PO Box 1376
Telluride, CO 81435
John G. Jodlowski – Manager -Member
Termination Date
Christopher J. Figy
QNB
10/13/05
Timothy C. Womack
QNB
10/17/05
CHANGES IN MEMBERSHIP STATUS
MEMBERSHIP LEASES
Terminated Leases
Terminated Participants Acronym
Termination Date
Lessor: The Michas Family
10/19/05
Limited Partnership
Lessee: Susquehanna Investment Group
Edmund P. Mahoney (EPM), NOMINEE
Individual Members
Effective Date
Timothy C. Womack
10/17/05
From:
CBT Registered For NOJ Trading, LLC; Market Maker
To:
CBT Registered For SMC Option Management LLC;
Market Maker
MEMBER ADDRESS CHANGES
MEMBERSHIP TERMINATIONS
Individual Members
CBT Registered For:
Termination Date
Christopher J. Figy (FIG)
NOJ Trading, LLC
1228 W. Glenlake Ave., #2
Chicago, IL 60660-2504
10/13/05
Member Organizations
Effective Date
Byrd Trading LLC
440 S. LaSalle - Ste. 1701
Chicago, IL 60605
10/19/05
CMCJL, LLC
440 S. LaSalle, Ste. 1701
Chicago, IL 60605
10/19/05
RESEARCH CIRCULARS
The following Research Circulars were distributed between October 14 and October 19, 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 #RS05-738
October 14, 2005
TV Azteca, S.A. de C.V. plc (“TV Azteca”) (“TZA/OKJ/YXZ”)
Cash Settlement
Research Circular #RS05-744
October 18, 2005
HCA, Inc. (“HCA/HCZ/VOM/WOM”)
Partial Self Tender Offer
Research Circular #RS05-739
October 14, 2005
Electronics Boutique Holdings Corp. (“ELBO/adj. ELZ”)
Determination of Cash-in-Lieu Amount
Research Circular #RS05-746
October 18, 2005
Advanced Neuromodulation Systems, Inc. (“ANSI/UAI”)
Tender Offer by St. Jude Medical, Inc. (“STJ/VJJ/WRU”)
Research Circular #RS05-741
October 14, 2005
C.H. Robinson Worldwide, Inc. (“CHRW/CJQ”)
2-for-1 Stock Split and Underlying Symbol Change to
“CHRWD”
Ex-Distribution Date: October 17, 2005
Research Circular #RS05-749
October 19, 2005
*****UPDATE*****UPDATE*****UPDATE*****
PetroKazakhstan Inc. Class A (“PKZ”) Proposed Plan
of Arrangement with CNPC International Ltd.
Research Circular #RS05-743
October 17, 2005
ScanSoft, Inc. (“SSFT/SSQ”)
Name Change to: Nuance Communications, Inc.
Effective Date: October 18, 2005
Research Circular #RS05-750
October 19, 2005
Southern Peru Copper Corporation (“PCU”)
Name Change to: Southern Copper Corporation
Effective Date: October 21, 2005
October 26, 2005
Volume RB16, Number 43
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 RG05-92
Date:
October 13, 2005
From: Market Operations Department
Re:
Restrictions on Transactions in
Delta Airlines, Inc. (DAL)
The NYSE suspended trading in shares of Delta Airlines, Inc. (DAL) on the opening of
business on October 13, 2005.
Trading on the CBOE in existing series of DAL options is subject to the following restrictions.
Only closing transactions may be affected in any series of DAL options except for (i) opening transactions by Market-Makers executed to accommodate closing transactions of other
market participants and (ii) opening transactions by CBOE member organizations to facilitate the closing transactions of public customers executed as crosses pursuant to and in
accordance with CBOE Rule 6.74(b) or (d).
The execution of opening transactions in DAL options, except as permitted above, and/or
the misrepresentation as to whether an order is opening or closing, will constitute a violation
of CBOE rules, and may result in disciplinary action. Member organizations should ensure
that they have appropriate procedures in place to prevent their customers from entering
opening orders in this restricted option class.
There are no restrictions in place with respect to the exercise of DAL options. The provisions
of this circular apply to any options on DAL traded on CBOE.
Any questions regarding this circular may directed to Kerry Winters at (312) 786-7312 or
Joanne Heenan-Hustad at (312) 786-7786.
Regulatory Circulars
continued
Regulatory Circular RG05-93
Date:
October 11, 2005
From: Market Operations Department
Re:
Restrictions on Transactions in
Delphi Corporation. (DPH)
The NYSE suspended trading in shares of Delphi Corporation (DPH) on the opening of
business on October 11, 2005.
Trading on the CBOE in existing series of DPH options were subject to the following
restrictions. Only closing transactions maybe effected in any series of DPH options except for (i) opening transactions by Market-Makers executed to accommodate closing
transactions of other market participants and (ii) opening transactions by CBOE member
organizations to facilitate the closing transactions of public customers executed as crosses
pursuant to and in accordance with CBOE Rule 6.74(b) or (d).
The execution of opening transactions in DPH options, except as permitted above, and/or
the misrepresentation as to whether an order is opening or closing, will constitute a violation of CBOE rules, and may result in disciplinary action. Member organizations should
ensure that they have appropriate procedures in place to prevent their customers from
entering opening orders in this restricted option class.
There are no restrictions in place with respect to the exercise of DPH options. The provisions of this circular apply to any options on DPH traded on CBOE.
Any questions regarding this circular may directed to Kerry Winters at (312) 786-7312 or
Joanne Heenan-Hustad at (312) 786-7786.
Regulatory Circular RG05-94
To:
Membership
From: Legal Division
Date:
October 14, 2005
Re:
Preferred Market-Maker Program
The SEC has approved expansion of the Exchange’s Preferred Program for directed orders (the program is operating on a pilot basis until June 2, 2006). Under the expanded
program, an order provider may designate any Exchange Market-Maker type (including
DPMs, e-DPMs, Market-Makers, Remote Market-Makers, Lead Market-Makers etc.) in
any designated Hybrid class as the “Preferred Market-Maker” for orders sent to the Exchange (use of the Preferred designation is optional).1
Formerly only the DPM or e-DPMs in a particular option class were eligible for the “Preferred” designation in such class. Under the revised rule, the “Preferred” designation is now
open to any Exchange Market-Maker type provided such Market-Makers comply with all
applicable existing quoting obligations under Exchange rules and provide continuous twosided quotations in at least 90% of the series of each class for which it receives Preferred
Market-Maker orders.
1
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See Information Circular 05-71 for technical information regarding transmission of Preferred orders.
October 26, 2005, Volume RB16, Number 43
Regulatory Circulars
continued
Regulatory Circular RG05-94 continued
If the Preferred Market-Maker is quoting at the NBBO at the time the order is received and
executed electronically by the Hybrid System, the Preferred Market-Maker will receive a
40% participation entitlement.2 If the Preferred Market-Maker is not quoting at the NBBO,
then the order shall be handled/executed in accordance with existing processes, which may
include use of the standard DPM Complex participation entitlement provided in Rule 8.87.
Please note 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, and that in no case shall a Market-Maker be allocated a total quantity greater than
the quantity that the Market-Maker is quoting at the best bid/offer on the Exchange. Further,
be advised that Exchange Rule 4.18’s prohibition of the misuse of material non-public information also applies to the Preferred Market-Maker program.
Members that are interested in having orders directed to them as a Preferred MarketMaker must register with the Exchange by completing the attached form and submitting it to the 4th Floor Help Desk. Help Desk staff will then contact the participant prior
to making the necessary enablements and will e-mail a confirmation after the
enablements are made. Please note that DPMs and e-DPMs that wish to continue
receiving directed orders must also complete and submit the attached form by October 31, 2005.
The text of the current Preferred Market-Maker Program Rule is below. Questions regarding
this circular should be addressed to Angelo Evangelou, Legal Division, at (312) 786-7464;
operational questions regarding establishing the ability to receive Preferred orders should be
addressed to Anthony Montesano, Trading Operations, at (312) 786-7365.
APPLICATION FOR PREFERRED MARKET-MAKER DESIGNATION
Please enable the following Members to receive orders designating a Preferred
Market-Maker:
Name:
Acronym:
Name:
Acronym:
Name:
Acronym:
Name:
Acronym:
Name:
Acronym:
The Member and/or Member Firm has procedures in place to ensure that the Member will meet the eligibility requirements in Rule 8.13(b) while enabled to receive an order
specifying a Preferred Market-Maker. Absent reasonable justification, a Market-Maker (including any Exchange Market-Maker type) who fails to meet the eligibility requirements will
be subject to disciplinary action. The Member Firm may also be subject to disciplinary
action if the CBOE finds a pattern or practice of activity in violation of the eligibility requirements set forth in Rule 8.13(b).
If the Member and/or Member Firm wishes to revoke this authorization for a Market-Maker to receive orders specifying a Preferred Market-Maker, written notice must be
provided via e-mail to the CBOE Help Desk at helpdesk@cboe.com.
Please note that Members and/or Member Firms may be acting in violation of
CBOE Rule 4.1 and Rule 4.18 if they participate in inappropriate conversations prior to the
submission and/or receipt of an order specifying a Preferred Market-Maker.
2
The Preferred participation entitlement rate is 50% when there is only one other Market-Maker also
quoting at the best price.
October 26, 2005, Volume RB16, Number 43
RB3
Regulatory Circulars
continued
Regulatory Circular RG05-94 continued
Member Firm Name (if applicable):
Exchange Market-Maker Type (i.e. MM, DPM, e-DPM, RMM, etc.):
By*:
Title*:
Contact Name:
Contact Phone Number:
Contact E-mail Address:
Date:
* This form must be signed by an officer or general partner of a Member Firm if completed
on behalf of a Nominee and/or CBT R.F.
The completed form (with an original signature) should be submitted to the 4th
Floor Help Desk for processing.
Regulatory Circular RG05-95
Date:
October 18, 2005
From: Market Operations Department
Re:
Restrictions on Transactions in
Refco Inc. (RFX)
The NYSE suspended trading in shares of Refco Inc. (RFX) on the opening of business on
October 18, 2005.
Trading on the CBOE in existing series of RFX options are subject to the following restrictions. Only closing transactions maybe effected in any series of RFX options except for (i)
opening transactions by Market-Makers executed to accommodate closing transactions
of other market participants and (ii) opening transactions by CBOE member organizations
to facilitate the closing transactions of public customers executed as crosses pursuant to
and in accordance with CBOE Rule 6.74(b) or (d).
The execution of opening transactions in RFX options, except as permitted above, and/or
the misrepresentation as to whether an order is opening or closing, will constitute a violation of CBOE rules, and may result in disciplinary action. Member organizations should
ensure that they have appropriate procedures in place to prevent their customers from
entering opening orders in this restricted option class.
There are no restrictions in place with respect to the exercise of RFX options. The provisions of this circular apply to any options on RFX traded on CBOE.
Any questions regarding this circular may directed to Kerry Winters at (312) 786-7312 or
Joanne Heenan-Hustad at (312) 786-7786.
RB4
October 26, 2005, Volume RB16, Number 43
Rule Changes,
Interpretations
and Policies
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-2005-86
Fees Passed Through ITS
On October 18, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-86, which
filing proposes to allow the Exchange to enter into arrangements with other SROs to pass
certain fees they have collected from members for transactions executed on another SRO
through the Intermarket Trading System (“ITS”). Any questions regarding the rule change
may be directed to Jaime Galvan, Legal Division, at 312-786-7058.
October 26, 2005, Volume RB16, Number 43
RB5