December 16, 2005
Exchange
Bulletin
Volume 33, Number 50
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 16, 2005
CLASS
CBOE
BID
OFFER
$850,000.00
LAST SALE AMOUNT
$900,000.00
LAST SALE DATE
$800,000.00
December 12, 2005
CBOT FULL MEMBERSHIP
CLASS
BID
OFFER
LAST SALE AMOUNT
LAST SALE DATE
With CBOE Exercise Right
$2,350,000.00
$2,800,000.00
$2,600,000.00
December 15, 2005
Without CBOE Exercise Right
$2,250,000.00
$3,400,000.00
$2,850,000.00
October 24, 2005
$67,000.00
$85,000.00
$65,000.00
December 8, 2005
CBOE Exercise Right
CBOE MEMBERSHIP SALES AND TRANSFERS
From
Seats Exchange Inc.
Seats Exchange Inc.
Seats Exchange Inc.
To
Kim Swahlstedt
EWT LLC
EWT LLC
Price/Transfer
$800,000.00
$800,000.00
$800,000.00
Date
12/9/05
12/12/05
12/12/05
Page 2
December 16, 2005
Volume 33, Number 50
Chicago Board Options Exchange
MEMBERSHIP INFORMATION FOR 12/8/05 THROUGH 12/14/05
MEMBERSHIP APPLICATIONS RECEIVED FOR
Nominee(s) / Inactive Nominee(s):
WHICH A POSTING PERIOD IS REQUIRED
Individual Membership Applicants
Date Posted
Michael P. Moore, Lessor
770 Oakwood
Lake Forest, IL 60045
12/13/05
12/8/05
Member Organizations
MEMBERSHIP LEASES
New Leases
Effective Date
Lessor: Stoco Inc.
Lessee: Citadel Derivatives Group LLC
Rate:
1.125%
Term: Monthly
12/8/05
Lessor: BKS Capital Management LLC
Lessee: Group One Trading, LP
John L. Bertolero, NOMINEE
Rate:
0.75%
Term: Monthly
12/9/05
Lessor:
Merrill Lynch Professional
Clearing Corp.
Lessee: PFTC LLC
Rate:
0.75%
Term: Monthly
12/9/05
Lessor: KISAY 1, LP
Lessee: Citadel Derivatives Group LLC
Rate:
1.125%
Term: Monthly
12/12/05
Lessor: Sheldon Weinberg
Lessee: Citadel Derivatives Group LLC
Rate:
1.125%
Term: Monthly
12/12/05
Lessor: Essex Radez, LLC
Lessee: PTR, Incorporated
Joseph M. Malee, NOMINEE
Rate:
0.7975%
Term: Monthly
12/12/05
Terminated Leases
Termination Date
Lessee(s):
Termination Date
Options Pro Consulting, LLC
Robert J. Allen
440 S. LaSalle - Ste. 1600
Chicago, IL 60605
12/8/05
EFFECTIVE MEMBERSHIPS
Individual Members
CBT Registered For:
Lessor: Stoco Inc
12/8/05
Lessee: Options Pro Consulting, LLC
James J. Miccucio (CUU), NOMINEE
Lessor:
Merrill Lynch Professional
12/9/05
Clearing Corp.
Lessee: Citigroup Derivatives Markets Inc.
Matthew J. Schueneman (HLK), NOMINEE
Lessor: Timothy G. Keller
Lessee: Group One Trading, LP
John L. Bertolero (JLB), NOMINEE
James J. Miccucio (CUU)
Options Pro Consulting, LLC
440 S. LaSalle - Ste. 1600
Chicago, IL 60605
Termination Date
12/9/05
Effective Date
Eric V. Ochotnicki (OZY)
12/9/05
Christopher Trading LLC
625 River Run Rd.
Leander, TX 78641
Type of Business to be Conducted: Market Maker
Young IL Lee (YNG)
12/13/05
Cutler Group, LP
440 S. LaSalle - Ste. 3400
Chicago, IL 60605
Type of Business to be Conducted: Market Maker
Lessor(s):
Kim Swahlstedt
141 W. Jackson - #2800
Chicago, IL 60604
12/12/05
Nominee(s) / Inactive Nominee(s):
Effective Date
Joseph M. Malee (VAL)
12/12/05
PTR, Incorporated
440 S. LaSalle, Suite 718
Chicago, IL 60605
Type of Business to be Conducted: Market Maker
Member Organizations
CBT Registered For:
Effective Date
MEMBERSHIP TERMINATIONS
Christopher Trading LLC
12/9/05
2058 Madrillon Rd.
Vienna, VA 22182
Type of Business to be Conducted: Market Maker
Individual Members
Lessor(s):
Effective Date
BKS Capital Management LLC
900 North Shore Drive
Lake Bluff, IL 60044
Type of Business to be Conducted:
12/9/05
CBT Registered For:
Termination Date
Richard J. Riggs (RZR)
Citadel Derivatives Group LLC
131 S. Dearborn Street, 37th Floor
Chicago, IL 60603-
12/14/05
Thomas M. Purtle (PRT)
Citadel Derivatives Group LLC
13161 Fox Hill Dr.
Lemont, IL 60439
12/14/05
***Correction to Bulletin Dated December 9, 2005***
Lessor(s):
Effective Date
Seko II LLC
6125 W. Howard St.
Niles, IL 60068
12/2/05
Page 3
December 16, 2005
Volume 33, Number 50
Chicago Board Options Exchange
MEMBER ADDRESS CHANGES
JOINT ACCOUNTS
Terminated Participants
Acronym
Termination Date
Member Organizations
Effective Date
Richard J. Riggs
CIT
12/14/05
12/9/05
Thomas M. Purtle
CIT
12/14/05
Bluefin Chicago LLC
445 Hamilton, Suite 1201
White Plains, NY 10601
RESEARCH CIRCULARS
The following Research Circulars were distributed between December 9 and December 14, 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 #RS05-876
December 9, 2005
O2Micro International Ltd. (“OIIMD/XQQ”)
Underlying Symbol Change to “OIIM”
Effective Date: December 12, 2005
Research Circular #RS05-878
December 9, 2005
York International Corporation (“YRK”) Merger COMPLETED
with Johnson Controls, Inc. (“JCI”)
Research Circular #RS05-879
December 9, 2005
***UPDATE – ANTICIPATED MERGER EFFECTIVE DATE –
DECEMBER 13, 2005*** Spinnaker Exploration Company
(“SKE”) Proposed Merger with Norsk Hydro ASA
Research Circular #RS05-880
December 12, 2005
Action Performance Companies, Inc.
(“ATN/ONW/YJT”) Merger COMPLETED with SMISC, LLC
Research Circular #RS05-881
December 12, 2005
Hyperion Solutions Corporation (“HYSL/WQE”)
3-for-2 Stock Split
Ex-Distribution Date: December 20, 2005
Research Circular #RS05-882
December 12, 2005
Viacom Inc. Class A (“VIA”) – MANDATORY EXCHANGE
Anticipated Merger/Separation Date: January 3, 2006
Research Circular #RS05-883
December 12, 2005
Viacom Inc. Class B (“VIA.B/VMB/VVM/WVM”)–
MANDATORY EXCHANGE
Anticipated Merger/Separation Date: January 3, 2006
Research Circular #RS05-885
December 13, 2005
Inamed Corporation (“IMDC/UZI”) Exchange Offer by
Allergan, Inc. (“AGN/OBO/YOK”)
Research Circular #RS05-886
December 13, 2005
Maxim Pharmaceuticals, Inc. (“MAXM/YQI”) Proposed
Merger with EpiCept Corporation (“EPCT”)
Research Circular #RS05-887
December 13, 2005
Inamed Corporation (“IMDC/UZI”) Proposed Merger
with Medicis Pharmaceutical Corporation (“MRX/ORXWEO”)
Research Circular #RS05-888
December 13, 2005
Georgia-Pacific Corporation (“GP/VGP/WGP”)
Tender Offer EXTENDED by Koch Forest Products, Inc.
Research Circular #RS05-891
December 14, 2005
Alloy, Inc. (“ALOY/YLQ/OZT/WXQ”)
Distribution of Shares of dELiA*s, Inc. (“DLIA”)
Ex-Distribution Date: December 20, 2005
Research Circular #RS05-892
December 14, 2005
Clear Channel Communication, Inc. (“CCU/VYU/WVX”)
Distribution of Shares of CCE Spinco, Inc. (“LYV”)
Ex-Distribution Date: December 22, 2005
December 21, 2005
Volume RB16, Number 51
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 RG05-125
Date:
December 9, 2005
To:
Members and Member Firms
From: Board of Directors
Re:
New Payment for Order Flow Plan
After reviewing the competitive situation as it applies to payment for order flow, the Board of
Directors has determined to revise CBOE’s current Payment for Orderflow (PFOF) program.
At its meeting on December 8, 2005, the Board determined that the following plan will
become effective on Monday, December 12, 2005:
Under the new program, CBOE will charge liquidity providers (including DPMs,
e-DPMs, RMMs and MMs) $0.65/contract when:
1)
The liquidity provider trades with any “directed order” for less than 1000
contracts;
2)
The liquidity provider trades with any “non-directed” orders of less than
1,000 contracts from a firm that accepts payment for order flow.
Under the program, the Exchange will not collect $0.65 on any non-directed orders from nonpayment accepting firms, will not collect on inbound linkage orders and will not collect on
any Market-Maker to Market-Maker transactions.
The money collected at each station will be divided into two types of pools. The first pooltype will contain the $0.65 collected for each executed contract of all directed orders. That
pool will then be sub-divided for use by the liquidity provider that is the “preferred MarketMaker” on a directed order (there will be separate pools for each preferred Market-Maker).
The preferred Market-Maker’s pool will be credited $0.65 for each contract of an order on
which that liquidity provider is designated as the preferred Market-Maker, regardless of
whether the preferred Market-Maker interacted with that order and conditioned upon the fact
that the liquidity provider has met the quoting obligations required under the program. That
preferred Market-Maker would then direct the Exchange as to the disbursement of its pool.
Unused funds in the preferred Market-Maker’s pool will be handled in two ways: 1) For any
pool where at least 80% of the money is disbursed, any remaining money will roll into the
next month’s pool for use by that preferred Market-Maker. At the end of three payment
periods, all of the remaining money in the pool will be rebated to the liquidity providers who
contributed to the pool, on a pro-rata basis, and; 2) if a preferred Market-Maker disburses
less than 80% of its pool during any one payment period, all unused monies will be rebated
on a pro-rata basis.
Regulatory Circulars
continued
Regulatory Circular RG05-125 continued
The second pool will contain the $0.65 collected on the executed non-directed payment
accepting orderflow. This pool will be disbursed at the discretion of the DPM for the order
flow sent to that station. Unused money in the DPMs’ pools will be handled in the same
manner as the unused money in pools of the preferred Market-Maker.
The result of this change is projected to increase the overall size of the PFOF pool by an
average of 25%.
Any questions regarding this payment for order flow program may be directed to Daniel
Hustad, Vice President, Market Quality Assurance at (312) 786-7715.
Regulatory Circular RG05-126
To:
Membership
From: Legal Division
Date:
December 9, 2005
Re:
Amendment to $2.50 Strike Price Program
The SEC has approved an amendment to $2.50 Strike Price Program.1 Specifically,
CBOE Rule 5.5, Interpretation and Policy .05, has been amended to allow the listing of
$2.50 strike prices between $50 and $75 on those option classes that have been selected
as part of the $2.50 Strike Price Program, provided the $2.50 strike prices between $50
and $75 are no more than $10 from the closing price of the underlying stock in its
primary market on the preceding day. For example, if an option class has been selected as part of $2.50 Strike Price Program, and the underlying stock closes at $48.50 in
its primary market, CBOE could list the $52.50 strike price and the $57.50 strike price on
the next business day. If an underlying security closes at $54, CBOE could list the $52.50
strike price, the $57.50, and the $62.50 strike price on the next business day.
The text of the revised rule pertaining to the $2.50 Strike Price Program is below. Questions regarding this rule change should be addressed to Patrick Sexton, Legal Division, at
(312) 786-7467; questions regarding the $2.50 Strike Price Program should be addressed
to Allison Kile at (312) 786-7210.
*****
Rule 5.5
Series of Option Contracts Open for Trading
…Interpretations and Policies:
.05
(a) $2.50 Strike Price Program. Pursuant to a program initially approved by the
SEC in 1995, the Exchange may select up to 60 options classes on individual stocks for
which the interval of strike prices will be $2.50 where the strike price is greater than $25 but
less than $50. In addition to those options selected by the Exchange, the strike price
interval may be $2.50 in any multiply-traded option once another exchange trading that
option selects such option, as part of this program.
1
Under the $2.50 Strike Price Program, the options exchanges may select up to 200 classes on which to list
strike prices at $2.50 intervals between $25 and $50. Of the total 200 classes in the Program, CBOE has
been allocated 60 selections, although CBOE may also list options with $2.50 intervals in any option class
that another exchange selects as part of the Program.
RB2
December 21, 2005, Volume RB16, Number 51
Regulatory Circulars
continued
Regulatory Circular RG05-126 continued
(b) In addition, on any option class that has been selected as part of the $2.50 Strike Price
Program pursuant to paragraph (a) above, the Exchange may list $2.50 strike prices between $50 and $75, provided the $2.50 strike prices between $50 and $75 are no more than
$10 from the closing price of the underlying stock in its primary market on the preceding day.
For example, if an option class has been selected as part of $2.50 Strike Price Program,
and the underlying stock closes at $48.50 in its primary market, the Exchange may list the
$52.50 strike price and the $57.50 strike price on the next business day. If an underlying
security closes at $54, the Exchange may list the $52.50 strike price, the $57.50 strike
price, and the $62.50 strike price on the next business day.
(c) An option class shall remain in the $2.50 Strike Price Program until otherwise designated by the Exchange and a decertification notice is sent to the Options Clearing Corporation.
Regulatory Circular RG05-127
To:
Members and Member Organizations
From:
Division of Regulatory Services
Date:
December 9, 2005
Subject:
Short Sales
Regulation SHO Threshold Securities List
Exchange
Contacts:
Robert Gardner
James Adams
(312) 786-7937
(312) 786-7718
KEY POINTS
•
Pursuant to Regulation SHO, CBOE is required to disseminate a list of threshold
securities.
•
To date, none of the four equity securities listed and traded on the CBOE have
reached threshold security status. Therefore, a threshold securities list has not
been necessary.
•
CBOE has commenced daily publication of a threshold securities list (even if blank)
on an internet website, consistent with the practice of other securities exchanges.
•
Members and member organizations are advised to check CBOE’s threshold securities list daily at https://www.cboe.org/legal/SHOthreshold.aspx. CBOE’s list will
be available after 8:30 A.M. CT.
DISCUSSION
Regulation SHO under the Securities Exchange Act of 1934 (the “Act”), defines “threshold
securities” as equity securities subject to reporting requirements under the Act (1) for which
there is an aggregate fail to deliver position at a registered clearing agency for five consecutive settlement days of 10,000 shares or more and that is equal to at least .5% of the issue’s
total shares outstanding and (2) are included on a list disseminated by a self-regulatory
organization.
December 21, 2005, Volume RB16, Number 51
RB3
Regulatory Circulars
continued
Regulatory Circular RG05-127 continued
Under Rule 203, paragraph (b)(3), of Regulation SHO, a clearing broker-dealer is required to
close-out any fail to deliver position resulting from the short sale of a “threshold security”
that has remained open for 13 consecutive settlement days (trade date plus 13 business
days or settlement date plus 10 business days) by immediately purchasing securities of
like kind and quantity. Until the close-out is executed, the clearing broker-dealer and any
broker-dealer for which it clears, including a Market-Maker, is prohibited from effecting
further short sales in the subject threshold security, unless, prior to a new short sale, the
security is borrowed or an arrangement to borrow the security is in place.2
Each exchange and securities association is required to publish a daily list of the threshold
securities listed on its respective market, or for which the SRO bears the primary surveillance responsibility. The exchanges have determined to disseminate lists of threshold
securities via their internet websites. In the event that a threshold security is traded on
more than one exchange, it will appear only on the threshold securities list of the exchange
that is the primary listing exchange. The lists will be a text file in a pipe-delimited format.
Any questions regarding Regulation SHO and threshold securities may be directed to
Robert Gardner, (312) 786-7931, or Jim Adams, (312) 786-7718, in the Department of
Member Firm Regulation.
2
There is a limited exception for options Market-Makers. If the short sale of a threshold security is effected
to establish or maintain a hedge on option positions that were opened before the security became a
threshold security, neither the close-out requirement nor the pre-borrow requirement for a new short sale
are applicable.
Regulatory Circular RG05-128
Date:
December 13, 2005
To:
Members, Member Firms and Member Organizations
From: Trading Operations/Legal Division
Re:
Change to Exposure Period for Crossing Orders in Hybrid
A rule change that decreases the exposure period for crossing orders in the Hybrid Trading
System (“Hybrid”) from 30 seconds to 10 seconds has been approved by the Securities
and Exchange Commission and is effective. (See SR-CBOE-2005-94; Release 34-52889.)
The text of the rule change is attached. Questions regarding this circular may be directed
to Jennifer Lamie at 312-786-7576 or Anthony Montesano at 312-786-7365.
The text of the proposed rule change is provided below (additions are underlined; deletions
are [bracketed]):
Chicago Board Options Exchange, Incorporated
Rules
*****
Rule 6.45A. - Priority and Allocation of Equity Option Trades
on the CBOE Hybrid System
(a) – (e) No change.
. . .Interpretations and Policies:
RB4
December 21, 2005, Volume RB16, Number 51
Regulatory Circulars
continued
Regulatory Circular RG05-128 continued
.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 broker-dealers 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 broker-dealers to transact with such orders.
*****
December 21, 2005, Volume RB16, Number 51
RB5
Rule Changes,
Interpretations
and Policies
APPROVED RULE CHANGES
The Securities and Exchange Commission (“SEC”) has approved the following change(s)
to Exchange Rules pursuant to Section 19(b) of the Securities Exchange Act of 1934, as
amended (“the Act”). Copies are available 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-2005-39
$2.50 Strike Price Program
On December 5, 2005, the SEC approved Rule Change File No. SR-CBOE-2005-39, which
filing proposes to amend CBOE Rule 5.5, Interpretation and Policy .05, to allow the listing
of $2.50 strike prices between $50 and $75 on those option classes that have been selected as part of the $2.50 Strike Price Program, provided the $2.50 strike prices between
$50 and $75 are no more than $10 from the closing price of the underlying stock in its
primary market on the preceding day. Any questions regarding the rule change may be
directed to Patrick Sexton, Legal Division, at 312-786-7467. New language is italicized.
Rule 5.5
Series of Option Contracts Open for Trading
(a) – (c)
No change.
…Interpretations and Policies:
.01 - .04
No change.
.05
(a) $2.50 Strike Price Program. Pursuant to a program initially approved
by the SEC in 1995, the Exchange may select up to 60 options classes on
individual stocks for which the interval of strike prices will be $2.50 where the
strike price is greater than $25 but less than $50. In addition to those options
selected by the Exchange, the strike price interval may be $2.50 in any multiplytraded option once another exchange trading that option selects such option, as
part of this program.
(b)
In addition, on any option class that has been selected as part of the
$2.50 Strike Price Program pursuant to paragraph (a) above, the Exchange may
list $2.50 strike prices between $50 and $75, provided the $2.50 strike prices
between $50 and $75 are no more than $10 from the closing price of the underlying stock in its primary market on the preceding day. For example, if an option
class has been selected as part of $2.50 Strike Price Program, and the underlying stock closes at $48.50 in its primary market, the Exchange may list the
$52.50 strike price and the $57.50 strike price on the next business day. If an
underlying security closes at $54, the Exchange may list the $52.50 strike price,
the $57.50 strike price, and the $62.50 strike price on the next business day.
(c)
An option class shall remain in the $2.50 Strike Price Program until
otherwise designated by the Exchange and a decertification notice is sent to the
Options Clearing Corporation.
.06 - .08
RB6
No change.
December 21, 2005, Volume RB16, Number 51
Rule Changes,
Interpretations and
Policies continued
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-2005-105
Qualifications for Foreign Organizations Seeking CBOE
Membership
On December 7, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-105, which
filing proposes to amend CBOE rules regarding qualifications of foreign member organizations in relation to foreign organizations seeking to become members of the Exchange in a
lessor-only capacity. Any questions regarding the rule change may be directed to David
Doherty, Legal Division, at 312-786-7466. The text of the proposed rule amendments is set
forth below. Proposed new language is underlined.
Rule 3.4. Qualifications of Foreign Member Organizations
(a) No change.
... Interpretations and Policies:
.01 For purposes of eligibility for membership, an entity organized as a limited
liability company under the laws of a country other than the United States shall be
deemed a corporation, its members shall be deemed principal shareholders, and its
members with management responsibility and its managers shall be deemed executive officers.
.02 A foreign member organization that is approved to act solely as a lessor is not
required to comply with Rules 3.4(a)(iii)(B) and 3.4(a)(xii).
*****
(b)
Inapplicable.
(c)
Inapplicable.
December 21, 2005, Volume RB16, Number 51
RB7
Rule Changes,
Interpretations and
Policies continued
EFFECTIVE-ON-FILING RULE CHANGE(S)
The following rule filing(s) were submitted to the SEC “effective-on-filing,” and have taken
effect pursuant to Section 19(b)(3) of the Securities Exchange Act. They will remain in
effect barring further action by the SEC within 60 days after their publication in the Federal
Register. Copies are available on the CBOE public website at www.cboe.com/legal/
effectivefiling.aspx.
SR-CBOE-2005-107
Revised Marketing Fee Program
On December 9, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-107,
which filing proposes to amend CBOE’s marketing fee program in light of the recent adoption of its Preferred Market-Maker program. The changes will be effective December 12,
2005, and continue until June 2, 2006 (which is the same date as CBOE’s Preferred
Market-Maker program is scheduled to expire, unless extended). Any questions regarding
the rule change may be directed to Patrick Sexton, Legal Division, at 312-786-7467.
SR-CBOE-2005-108
Revised Marketing Fee Program
On December 12, 2005, the Exchange filed Rule Change File No. SR-CBOE-2005-108,
which filing proposes to amend CBOE’s Fee Schedule to increase the session fee for the
Regulatory Element of the Continuing Education requirements. Any questions regarding
the rule change may be directed to Jaime Galvan, Legal Division, at 312-786-7058.
RB8
December 21, 2005, Volume RB16, Number 51