November 11, 2005
Exchange
Bulletin
Volume 33, Number 45
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, NOVEMBER 11, 2005
CLASS
CBOE
BID
OFFER
$705,000.00
LAST SALE AMOUNT
$790,000.00
LAST SALE DATE
$715,000.00
November 11, 2005
CBOT FULL MEMBERSHIP
CLASS
BID
OFFER
LAST SALE AMOUNT
LAST SALE DATE
With CBOE Exercise Right
$2,750,000.00
$2,950,000.00
$2,900,000.00
November 9, 2005
Without CBOE Exercise Right
$2,400,000.00
$3,300,000.00
$2,850,000.00
October 24, 2005
$90,000.00
$90,000.00
October 28, 2005
CBOE Exercise Right
$30,000.00
CBOE MEMBERSHIP SALES AND TRANSFERS
From
Lawrence Novak
Richard E. Tobin
Robert A. Zordani
BNY Brokerage Inc.
To
Geneva Stock, LLC
Ronin Capital, LLC
Citigroup Derivatives Markets, Inc.
TRO Trading Group LLC
Price/Transfer
$725,000.00
$681,000.00
$675,000.00
$715,000.00
Date
11/8/05
11/8/05
11/8/05
11/11/05
Page 2
November 11, 2005
Volume 33, Number 45
Chicago Board Options Exchange
MEMBERSHIP INFORMATION FOR 11/3/05 THROUGH 11/9/05
MEMBERSHIPAPPLICATIONS RECEIVED FOR
WHICH A POSTING PERIOD IS REQUIRED
Individual Membership Applicants
Date Posted
Stephen C. Kanavos, Lessor
888 Timberhill Road
Highland Park, IL 60035
11/7/05
Lessor: Richard E. Tobin
Lessee: Ronin Capital, LLC
Richard E. Tobin (RJT), NOMINEE
Lessor: Burton P. Bilfeld
Lessee: Hurricane Capital, LLC
Stephen K. Fox (FOX), NOMINEE
Termination Date
11/9/05
11/9/05
MEMBERSHIP TERMINATIONS
MEMBERSHIP LEASES
Individual Members
New Leases
Effective Date
Lessor: Gahl & Schwartz Inc.
Lessee: Cutler Group, LP
Rate:
1.125%
Term: Monthly
11/7/05
Lessor: Anthony P. Arciero
Lessee: PEAK6 Capital Management LLC
Neel Shah, NOMINEE
Rate:
1.212%
Term: Monthly
Nominee(s) / Inactive Nominee(s):
Termination Date
11/3/05
11/7/05
Brian J. McGrath (BQM)
Timber Hill LLC
209 S. LaSalle - 10th Floor
Chicago, IL 60604
11/7/05
Lessor: Burt R. Bondy
Lessee: PEAK6 Capital Management LLC
Franz F. Paul, NOMINEE
Rate:
1.212%
Term: Monthly
11/7/05
Michael R. Lossia (MRL)
PEAK6 Capital Management LLC
141 W. Jackson, Suite 400
Chicago, IL 60604
11/7/05
Lessor: David Gerstel
Lessee: PEAK6 Capital Management LLC
Joseph D. Mueller, NOMINEE
Rate:
1.212%
Term: Monthly
11/7/05
Timothy M. Sommerfield (EIS)
SLK-Hull Derivatives LLC
440 S. LaSalle Street - 17th Floor
Chicago, IL 60605
11/9/05
Lessor: Ruth I. Kahn
Lessee: PEAK6 Capital Management LLC
Gavin M. Lowrey, NOMINEE
Rate:
1.212%
Term: Monthly
11/7/05
Stephen K. Fox (FOX)
Hurricane Capital, LLC
5 Greenwood Drive
New City, NY 10956
11/9/05
Lessor: Elliott N. Mirman
Lessee: SLK-Hull Derivatives LLC
Rate:
1.212%
Term: Monthly
11/7/05
Michael R. Moore (CBY)
Ronin Capital, LLC
PO Box 14558
Chicago, IL 60614
11/9/05
Lessor: S & S Options
Lessee: Cutler Group, LP
Harilaos S. Mantzoros, NOMINEE
Rate:
1.125%
Term: Monthly
11/7/05
Tom G. Sideris (TGS)
TD Options, LLC
230 South LaSalle
Chicago, IL 60604
Lessor: Burton P. Bilfeld
Lessee: Hurricane Capital, LLC
Stephen K. Fox (FOX), NOMINEE
Rate:
1.125%
Term: 1 Day
11/8/05
Terminated Leases
Termination Date
Member Organizations
Lessor: Mont R. Wickham
11/7/05
Lessee: Xenos, LLC
Harilaos S. Mantzoros (HSM), NOMINEE
Lessor: David Gerstel
Lessee: SLK-Hull Derivatives LLC
11/7/05
Lessor: Burt R. Bondy
Lessee: SLK-Hull Derivatives LLC
11/7/05
Lessor: Anthony P. Arciero
11/7/05
Lessee: SLK-Hull Derivatives LLC
John H. Waterfield III (NYO), NOMINEE
Lessor: Ruth I. Kahn
Lessee: SLK-Hull Derivatives LLC
11/7/05
Lessee(s):
Termination Date
Xenos, LLC
Harilaos S. Mantzoros
4820 Kathleen Ct.
Long Grove, IL 60047
11/7/05
EFFECTIVE MEMBERSHIPS
Nominee(s) / Inactive Nominee(s):
Effective Date
Steven M. Bock (WIN)
11/3/05
Futrex Trading LLC
3456 N. Hoyne
Chicago, IL 60618
Type of Business to be Conducted: Market Maker
Stephen K. Fox (FOX)
11/8/05
Hurricane Capital, LLC
5 Greenwood Drive
New City, NY 10956
Type of Business to be Conducted: Market Maker
Page 3
November 11, 2005
Volume 33, Number 45
Effective Date
Michael J. Walsh (MJW)
11/9/05
Ronin Capital, LLC
230 S. LaSalle, Ste. 400
Chicago, IL 60604
Type of Business to be Conducted: Market Maker
Chicago Board Options Exchange
Vishal Savla
QCA
Termination Date
11/7/05
Vishal Savla
QIA
11/7/05
Timothy M. Sommerfield QIA
11/7/05
Timothy M. Sommerfield QCA
11/7/05
Michael A. Favia (FVA)
11/9/05
Ronin Capital, LLC
8211 W. Catherine Ave.
Chicago, IL 60656
Type of Business to be Conducted: Market Maker
Tom G. Sideris
QBB
11/9/05
Terminated Accounts
Acronym
Termination Date
JOINT ACCOUNTS
David C. Adent
QLL
11/7/05
Jonathan M. Costello
QLL
11/7/05
Gavin M. Lowrey
QLL
11/7/05
Neel Shah
QLL
11/7/05
Joseph D. Mueller
QLL
11/7/05
Steven R. Rosen
QLL
11/7/05
Franz F. Paul
QLL
11/7/05
Vishal Savla
QLL
11/7/05
Timothy M. Sommerfield QLL
11/7/05
New Participants
Acronym
Effective Date
Steven M. Bock
QED
11/3/05
Michael J. Walsh
QHS
11/9/05
Michael J. Walsh
QRV
11/9/05
Michael A. Favia
QSA
11/9/05
New Accounts
Acronym
Effective Date
Jonathan M. Costello
QPE
11/7/05
Neel Shah
QPE
11/7/05
Steven R. Rosen
QPE
11/7/05
CHANGES IN MEMBERSHIP STATUS
Vishal Savla
QPE
11/7/05
Individual Members
Franz F. Paul
QPE
11/7/05
David C. Adent
QPE
11/7/05
Anthony P. Arciero
11/4/05
From:
Lessor
To:
Lessor/ Nominee For Casey Trading LLC; Market Maker
Gavin M. Lowrey
QPE
11/7/05
Joseph D. Mueller
QPE
11/7/05
Terminated Participants
Acronym
Termination Date
Brian J. McGrath
QTH
11/3/05
David C. Adent
QCA
11/7/05
David C. Adent
QIA
11/7/05
Jonathan M. Costello
QCA
11/7/05
Jonathan M. Costello
QIA
11/7/05
Gavin M. Lowrey
QIA
11/7/05
Gavin M. Lowrey
QCA
11/7/05
Neel Shah
QCA
11/7/05
Neel Shah
QIA
11/7/05
Joseph D. Mueller
QCA
11/7/05
Joseph D. Mueller
QIA
11/7/05
Steven R. Rosen
QCA
11/7/05
Steven R. Rosen
QIA
11/7/05
Franz F. Paul
QCA
11/7/05
Franz F. Paul
QIA
11/7/05
Effective Date
Craig R. Luce
11/4/05
From:
Lessor/ Nominee For Casey Trading LLC; Market Maker/
Floor Broker
To:
Lessor
David C. Adent
11/7/05
From:
CBT Registered For SLK-Hull Derivatives LLC; Market
Maker/ Floor Broker
To:
CBT Registered For PEAK6 Capital Management LLC;
Market Maker/ Floor Broker
Gavin M. Lowrey
11/7/05
From:
Nominee For SLK-Hull Derivatives LLC; Market Maker/
Floor Broker
To:
Nominee For PEAK6 Capital Management LLC; Market
Maker/ Floor Broker
Harilaos S. Mantzoros
11/7/05
From:
Nominee For Xenos, LLC; Market Maker
To:
Nominee For Cutler Group, LP; Market Maker
Neel Shah
11/7/05
From:
Nominee For SLK-Hull Derivatives LLC; Market Maker/
Floor Broker
To:
Nominee For PEAK6 Capital Management LLC; Market
Maker/ Floor Broker
Franz F. Paul
11/7/05
From:
Nominee For SLK-Hull Derivatives LLC; Market Maker/
Floor Broker
To:
Nominee For PEAK6 Capital Management LLC; Market
Maker/ Floor Broker
Vishal Savla
11/7/05
From:
Nominee For SLK-Hull Derivatives LLC; Market Maker/
Floor Broker
To:
Nominee For PEAK6 Capital Management LLC; Market
Maker/ Floor Broker
Page 4
November 11, 2005
Volume 33, Number 45
Effective Date
Chicago Board Options Exchange
Member Organizations
Effective Date
Jonathan M. Costello
11/7/05
From:
Nominee For SLK-Hull Derivatives LLC; Market Maker/
Floor Broker
To:
Nominee For PEAK6 Capital Management LLC; Market
Maker/ Floor Broker
Ronin Capital, LLC
11/9/05
From:
Lessee/ Member Organization Affiliated with a CBT
Registered For; Associated with a Market Maker
To:
Owner/ Lessee/ Member Organization Affiliated with a
CBT Registered For; Associated with a Market Maker
Joseph D. Mueller
11/7/05
From:
Nominee For SLK-Hull Derivatives LLC; Market Maker/
Floor Broker
To:
Nominee For PEAK6 Capital Management LLC; Market
Maker/ Floor Broker
PEAK6 Capital Management LLC
11/7/05
From:
Owner; 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
Steven R. Rosen
11/7/05
From:
Nominee For SLK-Hull Derivatives LLC; Market Maker
To:
Nominee For PEAK6 Capital Management LLC; Market
Maker/ Floor Broker
MEMBER ADDRESS CHANGES
Individual Members
Effective Date
Anthony P. Arciero
11/8/05
From:
Lessor/ Nominee For Casey Trading LLC; Market Maker
To:
Lessor
Vern C. Rudnik
275 Olympic Drive
Mountain Home, AR 72653
11/4/05
Craig R. Luce
11/8/05
From:
Lessor
To:
Lessor/ Nominee For Casey Trading LLC; Market Maker
Stephen W. Quan
1111 N. Hermitage Ave. - #1
Chicago, IL 60622
11/4/05
Richard E. Tobin
11/9/05
From:
Lessor/ Nominee for Ronin Capital, LLC; Market Maker
To:
Nominee For Ronin Capital, LLC; Market Maker
Michael N. Suarez
1661 N. Claremont Ave., #1
Chicago, IL 60647
11/4/05
Member Organizations
Effective Date
Stuckey LLC
1725 W. Ellen St. - Apt. 2
Chicago, IL 60622
11/4/05
RESEARCH CIRCULARS
The following Research Circulars were distributed between November 3 and November 9, 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 #RS05-784
Research Circular #RS05-778
November 4, 2005
November 3, 2005
Action Performance Companies, Inc. (“ATN”)
Denbury Resources, Inc. (“DNR”)
with SMISC, LLC
2-for-1 Stock Split
Ex-Distribution Date: November 8, 2005
Research Circular #RS05-785
November 7, 2005
Research Circular #RS05-779
*****UPDATE – Determination of Contract Deliverable
November 4, 2005
Precision Drilling Corporation (“PDS/ZCD/LPB”)
The Scotts Miracle-Gro Company (“SMG/ORY/WOF”)
Plan of Arrangement COMPLETED
2-for-1 Stock Split
Ex-Distribution Date: November 10, 2005
Research Circular #RS05-786
November 8, 2005
Research Circular #RS05-780
Trident Microsystems, Inc. (“TRID/HVU”)
November 4, 2005
2-for-1 Stock Split
Fastenal Company (“FAST/FQA”)
Ex-Distribution Date: November 21, 2005
2-for-1 Stock Split
Ex-Distribution Date: November 14, 2005
Research Circular #RS05-787
November 8, 2005
Research Circular #RS05-781
NII Holdings, Inc. (“NIHD/QHQ/VQD/WZU”)
November 4, 2005
2-for-1 Stock Split
Southwestern Energy Company (“SWN”)
Ex-Distribution Date: November 22, 2005
2-for-1 Stock Split
Ex-Distribution Date: November 18, 2005
Research Circular #RS05-788
November 8, 2005
Research Circular #RS05-782
Brown & Brown, Inc. (“BRO”)
November 4, 2005
2-for-1 Stock Split
ID Biomedical Corporation (“IDBE/QQ”) Proposed Plan of
Ex-Distribution Date: November 29, 2005
Arrangement
with GlaxoSmithKline Inc. (“GSK”)
Research Circular #RS05-791
November 9, 2005
Research Circular #RS05-783
*****UPDATE – Determination of Contract Deliverable
November 4, 2005
Precision Drilling Corporation (“PDS/ZCD/LPB”)
Precision Drilling Corporation (“PDS/ZCD/LPB”)
Plan of Arrangement COMPLETED
Plan of Arrangement COMPLETED
November 16, 2005
Volume RB16, Number 46
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 RG 05-104
Date:
November 3, 2005
To:
Members and Member Organizations
From:
Regulatory Services Division
Re:
S&P 100 Index and American-Style FLEX Index
Option Exercise Procedures
This memorandum describes exercise procedures and requirements of Exchange Rules
11.1 and 24.18 as they pertain to the exercise of Standard & Poor’s 100 Stock Index option
contracts, American-Style FLEX Index Option contracts, and any other American-style
cash-settled index option contracts, including Short-Term Options (“Weeklys”), which are
option series that, generally, are opened on a Friday and that expire on the next Friday.
Please refer to Information Circular IC05-138 for more information on Weeklys. This regulatory circular also replaces RG00-70.
1.
Members who prepare their own exercise instruction memoranda must prepare and
time stamp such memoranda upon making the decision to exercise.
2.
Clearing firms must prepare and time stamp an exercise instruction memorandum
upon receipt of instructions to exercise from a customer or Market-Maker or upon
making the decision to exercise on behalf of a proprietary account.
3.
An “exercise advice” must be submitted to the Exchange no later than 3:20 p.m.
(CT) for all American-style, cash-settled index option contracts exercised. However, “exercise advices” are not required to be submitted to the Exchange (i) on the
business day prior to expiration with respect to expiring non-FLEX American-style,
cash-settled index option contracts, (ii) on the day of expiration with respect to
expiring FLEX American-style cash-settled index option contracts that expire on a
business day, or (iii) on the business day prior to expiration with respect to expiring
FLEX American-style, cash-settled index option contracts that expire on a day
other than a business day.
4.
An “exercise advice” must be clearly and accurately completed prior to submission.
Staff will not remove an “exercise advice” for any alteration once it has been deposited in a drop-off box.
5.
Clearing firms may enter exercises for any Market-Maker, customer, or proprietary
account on OCC’s Encore System (“Encore”) in lieu of physically delivering an
“exercise advice” to the Exchange trading floor. Such entries must be made no
later than 3:20 p.m. (CT) and serve as both an exercise instruction to OCC and an
“exercise advice” to the Exchange.
Regulatory Circulars
continued
Regulatory Circular RG05-104 continued
6.
Members acting on their own behalf or on behalf of a customer may only submit
an “exercise advice” and exercise instruction for the “net long position” open in any
series of American-style index options for the account at the time the “exercise
advice” or exercise instruction is submitted. For a complete explanation of this
requirement, members should refer to Exchange Rule 24.18 and Regulatory Circular RG99-84.
7.
If a member decides not to exercise all or part of the amount indicated on an
“exercise advice” previously submitted to the Exchange, he or she must submit
another “exercise advice” to the Exchange, with the cancel box checked, no later
than 3:20 p.m. (CT). (“exercise advice cancellations” do not cancel exercise instruction memoranda already submitted to the clearing firm).
8.
The “exercise advice” drop-off boxes are located on the Exchange’s trading floor
in the OEX trading crowd and behind the OEX Book. Additional boxes may be
made available, as need arises and box locations may similarly be moved or
removed, as business warrants. The drop-off boxes are removed at 3:20:59 p.m.
(CT). Submitting an “exercise advice” or “exercise advice cancellation” after this
time is a violation of Exchange Rule 11.1, and doing so on the basis of material
information released after this time, in addition to violating Rule 11.1, may constitute activity inconsistent with just and equitable principles of trade. If a member
inadvertently fails to submit an “exercise advice” or “exercise advice cancellation”
before the applicable deadline, the member should still consider submitting the
advice or cancellation to the Exchange’s Department of Market Regulation as
soon as possible after the deadline (even though a violation of Rule 11.1 will still
exist) in order to help to establish the time at which the exercise decision was
made.
9.
The joint account participant who makes the decision to exercise on behalf of the
joint account must indicate both the joint account acronym and his or her individual acronym on both the exercise instruction memorandum and the “exercise
advice”.
10.
The submission of an “exercise advice” to the Exchange does not initiate an
exercise at OCC; members must also submit an exercise instruction memorandum to their clearing firm.
11.
In the event that any of the following market conditions are declared, the below
provisions will apply (including Encore entries):
Delayed Opening or Trading Halt: Exercises of American-style, cash-settled index options (and the submission of corresponding “exercise advice” and advice
cancel forms) shall be prohibited during any time when trading in such options is
delayed, halted, or suspended, subject to the following exceptions:
(i) The exercise of an American-style, cash-settled index option may be processed and given effect in accordance with and subject to the rules of the Clearing Corporation while trading in the option is delayed, halted, or suspended if it can
be documented, in a form prescribed by the Exchange, that the decision to exercise the option was made during allowable time frames prior to the delay, halt, or
suspension. Acceptable documentation shall ordinarily be limited to an “exercise
advice” previously transmitted via Encore or a member’s copy of an “exercise
advice” previously submitted to the Exchange.
RB2
November 16, 2005, Volume RB16, Number 46
Regulatory Circulars
continued
Regulatory Circular RG05-104 continued
(ii)
Exercises of expiring American-style, cash-settled index options shall not
be prohibited on the last business day prior to their expiration.
(iii)
Exercises of American-style, cash-settled index options shall not be prohibited during a trading halt that occurs at or after 3:00 p.m. (CT). In the event of
such a trading halt, exercises may occur through 3:20 p.m. (CT). In addition, if
trading resumes following a trading halt (such as by closing rotation), exercises
may occur during the resumption of trading and for five (5) minutes after the close
of the resumption of trading. The provisions of this subparagraph (iii) are subject to
the authority of the Board to impose restrictions on transactions and exercises
pursuant to Rule 4.16(a).
(iv)
The President or his designee may determine to permit the exercise of
American-style, cash-settled index options while trading in such options is delayed, halted, or suspended. In general, such a determination would be based on
extraordinary circumstances.
To the extent that exercises of American-style, cash-settled index options are not
permitted due to a delayed opening, the exercise advice drop-off boxes will not be
placed in the designated areas until trading commences. Exercises may not be
effected, nor will “exercise advices” be accepted until trading commences.
To the extent that exercises of American-style, cash-settled index options are not
permitted due to a trading halt, the “exercise advice” drop-off boxes will be immediately removed from the designated areas upon the declaration of the trading halt
and will be returned to the designated areas upon the resumption of trading. These
restrictions shall remain in place until trading resumes.
Closing Rotation: The “exercise advice” drop-off boxes will remain at the designated areas and “exercise advices” will be accepted at the box until five minutes
after the completion of the closing rotation.
Modified Trading Hours: If trading hours are extended or modified, the exercise
deadline will be five minutes after the close of trading on that day instead of 3:20
p.m. (CT). The “exercise advice” drop-off boxes will be removed after the modified
exercise deadline, and exercises may not be effected, nor will “exercise advices”
be accepted, after such time.
FLEX Index Options: In the case of an American-style, cash-settled FLEX Index
Option, the references in this Paragraph 11 to a trading delay, halt, suspension,
resumption, closing rotation, or modified trading hours shall mean the occurrence
of the applicable condition in the standardized option on the index underlying the
FLEX Index Option (rather than the occurrence of the applicable condition in the
FLEX Index Option itself).
12.
The President or his designee may determine to extend the applicable deadline for
the delivery of “exercise advice” and “exercise advice cancellation” if unusual circumstances are present.
Any questions pertaining to index option exercises can be addressed to Dan Earner at (312)
786-7059 or Tim Mac Donald at (312) 786-7706.
(RG 00-70 Revised)
November 16, 2005, Volume RB16, Number 46
RB3
Regulatory Circulars
continued
Regulatory Circular RG 05-105
Date:
November 3, 2005
To:
Members and Member Organizations
From:
Department of Market Regulation
Subject:
Exercise Advice Requirements for OEX Short Term Options
The Securities and Exchange Commission approved a rule change enabling the
CBOE to list and trade ShortTerm Options (“Weeklys”) based on the S&P 100 (“OEX”).
OEX Weeklys will be listed on a Friday and expire the following Friday (see SRCBOE-2004-63).
OEX Weekly options may be exercised on any business day before the expiration date. As
such, OEX Weeklys are subject to the requirements set forth in CBOE Rule 11.1, as it
pertains to American-style cash-settled option contracts. Therefore, an “exercise advice”
must be submitted to the Exchange no later than 3:20 p.m. (CT). An “exercise advice”
does not need to be submitted to the Exchange on the Friday the OEX Weekly expires. Be
reminded that members may only submit an “exercise advice” and exercise instruction for
the “net long position” open in any series of American-style index options, including OEX
Weeklys, for the account at the time the “exercise advice” or exercise instruction is submitted.
Please refer to CBOE Rule 11.1 for general information regarding exercise procedures,
and refer to CBOE Rule 24.18 and Regulatory Circular RG99-84 for further information
regarding the exercise of the “net long position” open in an account at the time of exercise.
For questions regarding exercise obligations, please contact Mike Banker (312) 786-7427
or Tim MacDonald at (312) 786-7706. For general questions regarding Weeklys, please
contact Jim Flynn (312) 786-7070.
RB4
November 16, 2005, Volume RB16, Number 46
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-2005-94
Exposure of Orders in Hybrid
On November 4, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-94, which
filing proposes to decrease the exposure period for crossing orders in Hybrid from 30 seconds to 10 seconds. Any questions regarding the rule change may be directed to Jennifer
Lamie, Legal Division, at 312-786-7576. The text of the proposed rule amendments is set
forth below. Proposed new language is underlined. Proposed deleted language is [stricken
out].
Rule 6.45A. - Priority and Allocation of Equity Option Trades on the CBOE
Hybrid System
(a) – (e) No change.
. . .Interpretations and Policies:
.01 Principal Transactions: Order entry firms may not execute as principal against
orders they represent as agent unless: (i) agency orders are first exposed on the
Hybrid System for at least [thirty (30)]ten (10) seconds, (ii) the order entry firm has
been bidding or offering for at least [thirty (30)]ten (10) seconds prior to receiving an
agency order that is executable against such bid or offer, or (iii) the order entry firm
proceeds in accordance with the crossing rules contained in Rule 6.74.
.02 Solicitation Orders. Order entry firms must expose orders they represent as
agent for at least [thirty (30)]ten (10) seconds before such orders may be executed
electronically via the electronic execution mechanism of the Hybrid System, in
whole or in part, against orders solicited from members and non-member brokerdealers to transact with such orders.
*****
Rule 6.45B - Priority and Allocation of Trades in Index Options and Options
on ETFs on the CBOE Hybrid System
(a) – (d) No change.
. . . Interpretations and Policies:
.01 Principal Transactions: Order entry firms may not execute as principal against
orders they represent as agent unless: (i) agency orders are first exposed on the
Hybrid System for at least [thirty (30)]ten (10) seconds, (ii) the order entry firm has
been bidding or offering for at least [thirty (30)]ten (10) seconds prior to receiving an
agency order that is executable against such bid or offer, or (iii) the order entry firm
proceeds in accordance with the crossing rules contained in Rule 6.74.
.02 Solicitation Orders. Order entry firms must expose orders they represent as
agent for at least [thirty (30)]ten (10) seconds before such orders may be executed
electronically via the electronic execution mechanism of the Hybrid System, in
whole or in part, against orders solicited from members and non-member brokerdealers to transact with such orders.
November 16, 2005, Volume RB16, Number 46
RB5