

[Federal Register: January 17, 2006 (Volume 71, Number 10)]
[Notices]               
[Page 2605]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17ja06-99]                         


[[Page 2605]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53088; File No. SR-CBOE-2005-92]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Order Approving Proposed Rule Change To Prohibit the 
Practice of Unbundling Orders To Maximize Rebates of Fees

 January 10, 2006.

I. Introduction

    On November 7, 2005, the Chicago Board Options Exchange, 
Incorporated (``CBOE'' or ``Exchange'') filed with the Securities and 
Exchange Commission (``Commission'') pursuant to section 19(b)(1) of 
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to prohibit the practice of 
unbundling orders to maximize rebates of fees. The proposed rule change 
was published for notice and comment in the Federal Register on 
December 8, 2005.\3\ The Commission received no comments on the 
proposal. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(l).
    \2\ 17 CFR 240. 19b-4.
    \3\ See Securities Exchange Act Release No. 52872 (December 1, 
2005), 70 FR 73043.
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II. Description of the Proposal

    CBOE proposed to adopt a new rule to expressly prohibit its members 
from dividing single orders into multiple orders for the sole purpose 
of maximizing market data rebates.

III. Discussion and Commission Findings

    The Commission has reviewed carefully the proposed rule change and 
finds that it is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange,\4\ particularly section 6(b)(5) of the Act which, among other 
things, requires that the rules of a national securities exchange be 
designed to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating 
securities transactions, to remove impediments to perfect the mechanism 
of a free and open market and a national market system and, in general, 
to protect investors and the public interest.\5\ The Commission 
believes that the proposed rule change should help eliminate the 
distortive practice of trade shredding, and, therefore, promote just 
and equitable principles of trade.
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    \4\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\6\ that the proposed rule change (File No. SR-CBOE-2005-92), be 
and hereby is, approved.
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    \6\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-397 Filed 1-13-06; 8:45 am]

BILLING CODE 8010-01-P
