December 2, 2005
Exchange
Bulletin
Volume 33, Number 48
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, December 2, 2005
CLASS
CBOE
BID
OFFER
$724,000.00
LAST SALE AMOUNT
$771,000.00
LAST SALE DATE
$745,000.00
November 22, 2005
CBOT FULL MEMBERSHIP
CLASS
BID
OFFER
With CBOE Exercise Right
$2,550,000.00
Without CBOE Exercise Right
$2,400,000.00
$30,000.00
CBOE Exercise Right
$2,850,000.00
LAST SALE AMOUNT
LAST SALE DATE
$2,650,000.00
December 1, 2005
No Offer
$2,850,000.00
October 24, 2005
$90,000.00
$70,000.00
November 28, 2005
CBOE MEMBERSHIP SALES AND TRANSFERS
From
Steve Fanady
To
Fanmare
Price/Transfer
Transfer
Date
11/29/05
Page 2
December 2, 2005
Volume 33, Number 48
Chicago Board Options Exchange
MEMBERSHIP INFORMATION FOR 11/24/05 THROUGH 11/30/05
MEMBERSHIP APPLICATIONS RECEIVED FOR Member Organizations
WHICH A POSTING PERIOD IS REQUIRED
Individual Membership Applicants
Date Posted
Stephen A. Lindeke, CBT Registered For
Susquehanna Investment Group
2733 N. Lincoln Ave., #A
Chicago, IL 60614
11/25/05
Francesco Spinnato, Nominee
ST Capital LLC
428 W. Wellington, #B
Chicago, IL 60657
11/25/05
Steven M. Quirk, Nominee
Saen Options USA Inc.
5101 Grand Avenue
Western Springs, IL 60558
11/25/05
Christopher William Conn, Nominee
Lakeshore Securities, LP
1871 Stratford Avenue
Westchester, IL 60154
11/28/05
CBT Registered For:
Termination Date
VX Trading, Inc.
1436 W. Wellington
Chicago, IL 60657
11/25/05
EFFECTIVE MEMBERSHIPS
Individual Members
CBT Exercisers:
Effective Date
John H. Tocks (HTJ)
11/29/05
123 S. Stonegate Rd.
Lake Forest, IL 60045
Type of Business to be Conducted: Market Maker
CBT Registered For:
Effective Date
Michael P. Maloney (TTZ)
11/25/05
HSBC Securities (USA) Inc.
1 N. Wacker, Suite 4080
Chicago, IL 60606
Type of Business to be Conducted: Floor Broker
MEMBERSHIP TERMINATIONS
Individual Members
CBT Exercisers:
Termination Date
John H. Tocks (HTJ)
123 S. Stonegate Rd.
Lake Forest, IL 60045
11/30/05
CBT Registered For:
Termination Date
Jeffrey J. Holland (JJH)
Eroom Securities LLC
723 S. Lincoln
Hinsdale, IL 60521
11/29/05
Adam Persiani (ASP)
HGI, Inc.
141 W. Jackson - Suite 1520
Chicago, IL 60604
11/30/05
Nominee(s) / Inactive Nominee(s):
Termination Date
Michael P. Manning (MPM)
Blue Capital Group LLC
401 S. LaSalle, Suite 700
Chicago, IL 60605
11/28/05
Michael N. Becker (BEC)
Third Millennium Trading, LLC
440 S. LaSalle, Ste. 3100
Chicago, IL 60605
11/29/05
John W. Fickle (JWF)
McGowan Investors, LP
440 S. LaSalle, 19th Floor
Chicago, IL 60605
11/29/05
Jeremiah Duggan (JRY)
CTC LLC
440 S. LaSalle St., #1850
Chicago, IL 60605
11/30/05
Jeffrey J. Holland (JJH)
11/28/05
Eroom Securities LLC
723 S. Lincoln
Hinsdale, IL 60521
Type of Business to be Conducted: Floor Broker
Adam Persiani (ASP)
11/29/05
HGI, Inc.
141 W. Jackson - Suite 1520
Chicago, IL 60604
Type of Business to be Conducted: Market Maker
Timothy M. Feuerborn (DRT)
11/30/05
HGI, Inc.
141 W. Jackson, Suite 1520
Chicago, IL 60604
Type of Business to be Conducted: Market Maker
Nominee(s) / Inactive Nominee(s):
Effective Date
Robert E. Nilssen Jr. (BOB)
11/25/05
LaBranche Structured Products LLC
440 S. LaSalle, Suite 1938
Chicago, IL 60605
Type of Business to be Conducted: Market Maker
Benjamin H. Szelag (SLG)
11/28/05
Andrie Trading LLC
440 S. LaSalle St., Ste. 1910
Chicago, IL 60605
Type of Business to be Conducted: Market Maker
Member Organizations
Lessor(s):
Effective Date
Fanmare
7449 N. Lowell
Skokie, IL 60076
11/29/05
Page 3
December 2, 2005
Volume 33, Number 48
JOINT ACCOUNTS
Chicago Board Options Exchange
CHANGES IN MEMBERSHIP STATUS
New Participants
Acronym
Effective Date
Individual Members
David A. Goldsmith
QSM
11/25/05
William R. Bergey
QSM
11/25/05
Michael Weingart
11/25/05
From:
CBT Registered For VX Trading, Inc.; Market Maker
To:
CBT Registered For DRO WST Trading LLC; Market
Maker
Brian W. Hansen
QSM
11/25/05
Ryan P. Price
QCC
11/25/05
Benjamin H. Szelag
QDD
11/28/05
Benjamin H. Szelag
QDX
11/28/05
Benjamin H. Szelag
QND
11/28/05
Benjamin H. Szelag
QNZ
11/28/05
Adam Persiani
QHG
11/29/05
Timothy M. Feuerborn
QHG
11/30/05
Andrie Trading LLC
11/28/05
From:
Lessee/Owner/Member Organization Affiliated with a
CBT Registered For; Associated with a Market Maker/
Remote Market Maker
To:
Lessee/Owner/Member Organization Affiliated with a
CBT Registered For; Associated with a Market Maker
Terminated Participants Acronym
Termination Date
MEMBER ADDRESS CHANGES
Michael P. Manning
QOJ
11/28/05
Individual Members
Effective Date
Adam Persiani
QHG
11/30/05
11/28/05
Jeremiah Duggan
QGQ
11/30/05
Barbara J. Doherty
2500 Sixth Ave., #1205
San Diego, CA 92103
Jeremiah Duggan
QCT
11/30/05
11/28/05
Jeremiah Duggan
`
Jeremiah Duggan
QGT
11/30/05
Edward Doherty
2500 Sixth Ave., #1205
San Diego, CA 92103
QXY
11/30/05
Joan M. Savin
610 Robert York Ave. - Apt. 403
Deerfield, IL 60015
11/28/05
Member Organizations
Effective Date
BE Partners LLC
885 Maplewood Rd.
Lake Forest, IL 60045
11/30/05
Effective Date
James W. Moore
11/28/05
From:
Nominee For Wolverine Trading LLC; Market Maker/
Floor Broker
To:
CBT Registered For Wolverine Trading LLC; Market
Maker/ Floor Broker
Member Organizations
Effective Date
Page 4
December 2, 2005
Volume 33, Number 48
Chicago Board Options Exchange
RESEARCH CIRCULARS
The following Research Circulars were distributed between November 23 and December 1, 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 #RS05-830
November 23, 2005
Georgia-Pacific Corporation (“GP/VGP/WGP”)
Tender Offer by Koch Forest Products, Inc.
Research Circular #RS05-832
November 23, 2005
Novarre Corporation (“NAVRE/QIG”)
Underlying Symbol Change to “NAVR”
Effective Date: November 25, 2005
Research Circular #RS05-833
November 23, 2005
Shire Pharmaceuticals Group, plc ADS
(“SHPGY/UGH/OTK/YKT”)
Name Change to: Shire plc ADS
Effective Date: November 25, 2005
Research Circular #RS05-841
November 29, 2005
America, Inc. (“WTR”)
4-for-3 Stock Split
Ex-Distribution Date: December 2, 2005
Research Circular #RS05-842
November 29, 2005
Range Resources Corporation (“RRC”)
3-for-2 Stock Split
Ex-Distribution Date: December 5, 2005
Research Circular #RS05-843
November 29, 2005
Cal Dive International, Inc. (“CDIS/KPQ/VSA/WAI”)
2-for-1 Stock Split
Ex-Distribution Date: December 9, 2005
Research Circular #RS05-834
November 23, 2005
TASER International, Inc. (“TASR/QUR”)
Underlying Symbol Change to “TASRE”
Effective Date: November 25, 2005
Research Circular #RS05-845
November 29, 2005
PetroQuest Energy, Inc. (“PQUE/KUG”)
Stock and Option Symbol Change to “PQ”
Effective Date: November 30, 2005
Research Circular #RS05-835
November 25, 2005
O2Micro International Ltd. (“OIIM/XQQ”)
Underlying Symbol Change to “OIIMD”
Effective Date: November 28, 2005
Research Circular #RS05-846
November 29, 2005
Advanced Neuromodulation Systems, Inc. (“ANSI/UAI”):
Merger Completed — Cash Settlement
Research Circular #RS05-836
November 28, 2005
iShares Trust (Dow Jones Series)
To Move To and Begin Trading on the NYSE
Effective Date: November 30, 2005
Research Circular #RS05-837
November 28, 2005
Hologic, Inc. (“HOLX/QHX”)
2-for-1 Stock Split
Ex-Distribution Date: December 1, 2005
Research Circular #RS05-839
November 28, 2005
Weatherford International, Ltd.
(“WFT/ODS/YDQ & adj. PAH/ZAK/LAT”)
2-for-1 Stock Split
Ex-Distribution Date: December 1, 2005
Research Circular #RS05-847
November 30, 2005
Metris Companies Inc. (“MXT/VLV/WKW”)
Merger Completed — Cash Settlement
Research Circular #RS05-850
November 30, 2005
Metals USA, Inc. (“MUSA/JZU/OGH/YZP”)
Merger Completed – Cash Settlement
Research Circular #RS05-851
December 1, 2005
AT&T Corp. (“T/adj. TIJ/TAV/TGW”)
Determination of Cash-in-Lieu Amount
December 7, 2005
Regulatory
Bulletin
Volume RB16, Number 49
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 RG05-118
To:
Members and Member Organizations
From:
Division of Regulatory Services
Date:
November 23, 2005
Subject:
Revisions to the Series 4 – Registered Options Principal
and Series 9/10 – General Securities Sales Supervisor
Qualification Examinations
Exchange
Contacts:
James Adams
Lawrence Bresnahan
(312) 786-7718
(312) 786-7713
KEY POINTS
•
Changes to the Series 4 and Series 9/10 qualification examination programs will
become effective on November 30, 2005.
•
Questions concerning the Series 4 or Series 9/10 qualification examinations may
be directed to James Adams at (312) 786–7718 or Lawrence Bresnahan at (312)
786-7713 in the Exchange’s Department of Member Firm Regulation.
Background and Discussion
The Series 4, and 9/10 examination programs were recently reviewed by the CBOE, other
self regulatory organizations (“SROs”) and committees of industry representatives. As a
result of these reviews and as discussed in greater detail below, the examination programs
generally have been revised to reflect changes in relevant laws, rules and regulations covered by the examinations, and to reflect more accurately the duties and responsibilities of
the individuals who are taking these examinations. The Series 4 and 9/10 examinations
also have been modified to reflect the Securities and Exchange Commission (SEC) short
sale requirements.
Series 4
The Series 4 examination, an industry-wide examination, qualifies an individual to function
as a Registered Options Principal, but only for purposes of supervising a firm’s options
activities. The Series 4 examination tests a candidate’s general knowledge of options trading, the industry rules applicable to trading of option contracts, and the rules of registered
clearing agencies for options. The Series 4 examination covers, among other things, equity
options, foreign currency options, index options and options on government securities.
Regulatory Circulars
continued
Regulatory Circular RG05-118 continued
The Series 4 study outline has been revised to reflect changes to the laws, rules and
regulations covered by the examination. The study outline has further been revised to
reflect the SEC short sale requirements, and to align the examination more closely to the
supervisory duties of a Series 4 individual.
The number of questions on the Series 4 examination remains at 125, and candidates
continue to have three hours to complete the exam. Also, each question continues to
count one point, and each candidate must correctly answer 70 percent of the questions to
receive a passing grade.
The Series 4 examination program is shared by the following SROs: the American Stock
Exchange LLC (AMEX), the Chicago Board Options Exchange, Incorporated (CBOE), the
NASD, the New York Stock Exchange, Inc. (NYSE), the Pacific Exchange, Inc. (PCX), and
the Philadelphia Stock Exchange, Inc. (PHLX). The revised Series 4 examination program
reflects revisions made by all the SROs that share the examination. Moreover, the revised
Series 4 examination program supersedes all prior revisions to the examination.
Series 9/10
The Series 9/10 examination tests a candidate’s knowledge of securities industry rules
and regulations and certain statutory provisions pertinent to the supervision of sales activities.
The Series 9/10 study outline has been revised to cover Regulation S-P, Municipal Securities Rule Making Board (MSRB) Rules G-37 and G-38, SRO research analyst and antimoney laundering rules, municipal fund securities (e.g., 529 college savings plans), and
exchange traded funds. Further the outline has been revised to reflect the SEC short sale
requirements, and to align the examination more closely to the supervisory duties of a
Series 9/10 individual.
The number of questions on the Series 9/10 examination remains at 200, and candidates
continue to have four hours to complete the Series 10 portion (145 questions) and one and
one-half hours to complete the Series 9 portion (options – 55 questions). Also, each question continues to count one point, and each candidate must correctly answer 70 percent of
the questions on each series, 9 and 10, to receive a passing grade. The Series 9/10
examination program is shared by the following SROs: the AMEX, CBOE, MSRB, NYSE,
NASD, PCX and PHLX. The revised Series 9/10 examination program reflects revisions
made by all the SROs that share the examination.
The qualification examination changes will be implemented on November 30, 2005 and the
revised examination study outlines are available for download via the Regulation page on
the NYSE website at www.nyseregulation.com or the NASD qualifications web page at
www.nasd.com.
RB2
December 7, 2005, Volume RB16, Number 49
Regulatory Circulars
continued
Regulatory Circular RG05-119
Date:
November 22, 2005
From:
Market Operations Department
Re:
Restrictions on Transactions in
Royal Dutch Petroleum (RD)
On the Opening of business on November 22, 2005, the listing of Royal Dutch Petroleum
(RD) was transferred from the NYSE to the Nasdaq Bulletin Board.
As of November 22, 2005 trading on CBOE in existing series of RD, (OWG, YXD) options
will be subject to the following restrictions. Only closing transactions may be effected in any
series of RD, (OWG, YXD) 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 RD, (OWG, YXD) 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 RD, (OWG, YXD) options.
The provisions of this circular apply to any options on Royal Dutch Petroleum Corporation
traded on CBOE.
Any questions regarding this circular may be directed to Kerry Winters at (312) 786-7312 or
Joanne Heenan-Hustad at (312) 786-7786.
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-2004-37
Rule Revisions relating to the Continued Approval of
Underlying Securities
On November 17, 2005, the SEC approved Rule Change File No. SR-CBOE-2004-37, which
filing eliminates the continued listing standard that restricts the listing of new option series
on an existing stock option when the issuer of the underlying stock has failed to comply with
its requirements to make timely corporate filings under the Securities Exchange Act of
1934. Any questions regarding the rule change may be directed to Jim Flynn, Legal Division, at 312-786-7070. The text of the amended rules is set forth below. New language is
italicized.
Rule 5.3 – Criteria for Underlying Securities
Rule 5.3. (a) Underlying securities in respect of which put or call option contracts
are approved for listing and trading on the Exchange must meet the following criteria:
December 7, 2005, Volume RB16, Number 49
RB3
Rule Changes,
Interpretations and
Policies continued
SR-CBOE-2004-37 continued
(1)
the security must be duly registered and be an “NMS stock” as
defined in Rule 600 of Regulation NMS of the Securities Exchange Act of 1934;
and
(2)
(b)
No change.
No change.
. . . Interpretations and Policies:
.01 - .09 No change.
*****
Rule 5.4 - Withdrawal of Approval of Underlying Securities
Rule 5.4. No change.
... Interpretations and Policies:
.01 The Board of Directors has established guidelines to be considered by the
Exchange in determining whether an underlying security previously approved for
Exchange option transactions no longer meets its requirements for the continuance of such approval. Absent exceptional circumstances, with respect to Paragraphs (a), (b), or (c) listed below, an underlying security will not be deemed to
meet the Exchange’s requirements for continued approval whenever any of the
following occur:
(a) - (d) No change.
(e) Reserved.
(f) The underlying security ceases to be an “NMS stock” as defined in Rule 600 of
Regulation NMS of the Securities Exchange Act of 1934.
(g) No change.
.02 - .13 No change.
RB4
December 7, 2005, Volume RB16, Number 49
Discplinary
Decisions
At its meeting on November 16, 2005, the Business Conduct Committee (“BCC”) resolved
the following disciplinary matters by accepting three Offers of Settlement in which the respondents consented to stipulations of facts and findings as detailed below without admitting or denying that Exchange Rules had been violated.
File No. 05-0015 (Offer of Settlement, Decision issued November 18, 2005)
Scott Force (“Force”), a registered CBT Exerciser and broker/dealer, was censured and
fined $2,500 for the following conduct. Force failed to file his Anti-Money Laundering (“AML”)
Compliance Program with the Exchange by December 13, 2004. As a result, Force impeded and delayed the Exchange’s investigation of this matter. In accepting this Offer of
Settlement, the BCC considered certain mitigating factors, including the fact that although
Force may not have received actual notice of the letters requesting Force to file the required
AML Compliance Program with the Exchange, Force received constructive notice of such
letters, in that the letters were sent to Force’s address designated for correspondence in his
Exchange membership file. (CBOE Rules 4.20 – Anti-Money Laundering Compliance Program; 15.1 – Furnishing of Books, Records and Other Information; and 17.2(b)- Complaint
and Investigation: Requirement to Furnish Information)
File No. 05-0024 (Offer of Settlement, Decision issued November 23, 2005)
Bruce Drevets (“Drevets”), an Exchange Market-Maker member and broker/dealer, was censured and fined $5,000 for the following conduct. Drevets failed to file his Anti-Money
Laundering (“AML”) Compliance Program with the Exchange by December 13, 2004. As a
result, Drevets impeded and delayed the Exchange’s investigation of this matter. In accepting this Offer of Settlement, in accordance with Exchange Rule 17.11, the Business Conduct Committee, in assessing the fine, considered Drevets’ inability to pay. (CBOE Rules
4.20 – Anti-Money Laundering Compliance Program; 15.1 – Furnishing of Books, Records
and Other Information; and 17.2(b)- Complaint and Investigation: Requirement to Furnish
Information)
File No. 05-0044 (Offer of Settlement, Decision issued November 18, 2005)
JAG Trading, LLC (“JAG”), an Exchange Market-Maker organization, was censured, fined
$7,500, and ordered to conduct an undertaking whereby JAG shall compute its net capital
each day for 45 consecutive business days upon issuance of the Decision, and submit its
capital computation to the Exchange’s Member Firm Regulation Department no later than
8:00 am (central time). On or about March 21, 2005 through on or about March 22, 2005,
JAG operated with net capital below the minimum required amount of $100,000. (CBOE
Rules 4.2 – Adherence to Law; 13.1 – Minimum Requirements; 15.1 – Furnishing of Books,
Records and Other Information; and Section 15(c) of the Securities Exchange Act of 1934,
as amended (the “Act”) and Rule 15c3-1 - Net Capital thereunder)
December 7, 2005, Volume RB16, Number 49
RB5