

[Federal Register: November 27, 2006 (Volume 71, Number 227)]
[Notices]               
[Page 68657-68659]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27no06-134]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54771; File No. SR-CBOE-2006-88]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing of Proposed Rule Change To Codify a Fee 
Schedule for the Sale of Open and Close Volume Data on CBOE Listed 
Options by Market Data Express, LLC

November 16, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on November 3, 2006, the Chicago Board Options Exchange, Incorporated 
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change as described in 
Items I, II and III below, which Items have been prepared by the CBOE. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.

---------------------------------------------------------------------------

[[Page 68658]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The CBOE proposes to codify a fee schedule for the sale of open and 
close volume data on CBOE listed options by Market Data Express, LLC 
(``MDX''), a wholly-owned subsidiary of CBOE. The text of the proposed 
rule change is available on the CBOE's Web site (http://www.cboe.com), 

the Office of the Secretary, CBOE, and at the Commission's Public 
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, CBOE included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Amex has prepared summaries, set forth in Sections 
A, B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    CBOE creates volume data for each CBOE listed option that consists 
of opening buys and opening sells and closing buys and closing 
sells.\3\ This opening and closing position data is subdivided by 
origin code (i.e., customer or firm) and the customer data is further 
subdivided by order size. The volume data is summarized by day and 
series (symbol, expiration date, strike price, call or put). This 
volume data is referred to herein as the ``Open/Close Data.''
---------------------------------------------------------------------------

    \3\ An opening buy is a transaction that creates or increases a 
long position and an opening sell is a transaction that creates or 
increases a short position. A closing buy is a transaction made to 
close out a position. A closing sell is a transaction to reduce or 
eliminate a long position.
---------------------------------------------------------------------------

    MDX offers the Open/Close Data for sale to CBOE members and non-
members. The fees that MDX assesses for the Open/Close Data are set 
forth in the Price List on MDX's Web site. Members and non-members are 
charged the same fees for the Open/Close Data.
    Under the proposal, customers may purchase Open/Close Data on a 
subscription basis or by ad hoc request. Daily Open/Close Data covering 
all CBOE securities would be available for purchase by subscribing to 
the Daily Update service at a cost of $600 per month. Subscribers to 
the Daily Update service would receive a daily data file via download 
from MDX's Web site. Historical Open/Close Data covering all CBOE 
securities may be purchased on an ad hoc request basis and is delivered 
via DVD. The charge for Historical Open/Close Data covering all CBOE 
securities would be $7,200 per year for requests for one to four years 
of data. Requests for five or more years of Historical Open/Close Data 
would receive a 50% discount beginning with the fifth year of data 
(i.e., MDX charges $7,200 for each of the first four years of data and 
$3,600 for year five and each subsequent year of data).
    Alternatively, a customer may purchase Historical Open/Close Data 
on an individual CBOE security at a cost of $4.50 per security per 
month. This data would be available via download form MDX's Web site. A 
50% discount would be applied for requests for ten or more years of 
data, beginning with the tenth year of data.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\4\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act,\5\ in particular, in that it 
is designed to provide for the equitable allocation of reasonable dues, 
fees, and other charges among CBOE members and issuers and other 
persons using its facilities. The Open/Close Data is summarized and 
formatted by MDX in such a way that it increases its usability and 
value. In order to develop the Open/Close Data, MDX had to develop at 
significant expense a separate and more detailed system than the system 
MDX uses to generate its options summary data. The Exchange took these 
development costs into account when setting the proposed fees for the 
Open/Close Data. The Exchange is not aware of any data product offered 
by another exchange that is similar to the Open/Close Data product.\6\ 
While there is no direct comparison to another exchange's product, the 
Exchange believes the proposed Open/Close Data fees are fair and 
reasonable in that the fees are less than the fees charged by another 
exchange for data that is not summarized and formatted in the way the 
Open/Close Data is.\7\ The Exchange also believes the proposed MDX fees 
are consistent with Rule 603 under the Act (Distribution, 
Consolidation, and Display of Information with Respect to Quotations 
for and Transaction in NMS Stocks) \8\ in that the fees are fair and 
reasonable and not unreasonably discriminatory. Members and non-members 
pay the same fees for the Open/Close Data.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
    \6\ The Exchange believes the Options Clearing Corporation 
provides free of charge gross contract volume by class and by origin 
code only.
    \7\ See Securities Exchange Act Release No. 53212 (February 2, 
2006), 71 FR 6803 (February 9, 2006) (SR-ISE-2006-07) and Securities 
Exchange Act Release No. 53390 (February 28, 2006), 71 FR 11457 
(March 7, 2006) (SR-ISE-2006-08).
    \8\ 17 CFR 242.603.
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    A. By order approve such proposed rule change; or
    B. Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to rule-comments@sec.gov. Please include 

File Number SR-CBOE-2006-88 on the subject line.

[[Page 68659]]

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.
    All submissions should refer to File Number SR-CBOE-2006-88. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments, 

all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for inspection 
and copying in the Commission's Public Reference Room. Copies of such 
filing also will be available for inspection and copying at the 
principal office of the CBOE. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-CBOE-2006-88 and should be submitted on or before 
December 18, 2006.
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
Nancy M. Morris,
Secretary.
[FR Doc. E6-19976 Filed 11-24-06; 8:45 am]

BILLING CODE 8011-01-P
