Download RULE 8 - CBOE.org

To:
Members and Member Firms
From:
Regulatory Services Division
Re:
Multiple Aggregation Units for Market-Makers and Remote Market-Makers
_______________________________________________________________________
According to Exchange Rule(s) 8.3(c) vii and viii, as they relate to criteria set forth in Rule 8.4(c)(ii), a
CBOE member or member organization may have multiple aggregation units operating as a separate
Market-Maker (“MM”) and/or Remote Market-Maker (“RMM”) within the same class1. In order to
avail itself of this provision, the member or member firm must demonstrate that each aggregation unit
operates independent of the other(s). In conjunction with this provision and to demonstrate the
independence of each unit, each member or member firm applying to operate as a MM/RMM pursuant
to Rule 8.4(c)(ii) must submit the following documentation along with the MM/RMM membership
application.
1. A completed Multiple Aggregation Unit Declaration Form (see Attachment A).
2. A copy of the member or member firm’s written plan of organization that identifies each
aggregation unit, specifies its trading objectives and supports its independent identity as
prescribed in Rule 8.4(c)(ii)(A).
3. A completed Multiple Aggregation Unit Risk Manager Certification Form (see Attachment B)
for every risk manager assigned to each aggregation unit as prescribed in Rule 8.4(c)(ii)(B).
4. A copy of the member or member firm’s compliance and/or internal audit procedures and
information-sharing policies related to its MM/RMM operation as prescribed in Rule
8.4(c)(ii)(D).
The Multiple Aggregation Unit Declaration Form and the Risk Manager Certification Form
MUST be submitted to the Department of Market Regulation and the Department of Market
Quality Assurance prior to operating as multiple aggregation units in the same class.
The written plan of organization pursuant to Rule 8.4(c)(ii)(A) must also be submitted to the
Department of Market Regulation to avoid any violations.
Members and Member Firms operating under this provision are reminded that at such time there is any
material change with respect to the aggregation units, a written report of such must be promptly
provided to the Department of Market Regulation. At that point, the CBOE will reexamine the status of
the MM/RMM.
Questions pertaining to these provisions may be directed to Dave Carlson of the Department of Market
Regulation at (312) 786-7052 or to the Department of Market Quality Assurance at (312) 786-7198 or
email [email protected].
1
Pursuant to Exchange Rule 8.1, the term Market Maker includes RMM as defined in Rule 8.4.