CBOE Long Term Penny Pilot Rollout Plan

The Equity Options Trading Committee of SIFMA provides comments to the Securities and Exchange Commission (SEC) on the Long Term Penny Pilot Rollout Plan detailed in the Penny Pilot Phase II Report, submitted by the Chicago Board Options Exchange (CBOE) on March 4, 2008.  Previously, SIFMA has expressed concerns regarding the roll-out of the options penny pilot program at various times.  In particular, SIFMA has commented with regards to liquidity, capacity constraints, quote mitigation, and dollar ($1) strike initiatives.  In this plan specifically, SIFMA endorses the recommendations put forth in the CBOE report, in particular the adoption of a tiered quoting structure whereby all option series priced under one dollar ($1) are quoted in penny increments, and all series priced at or above $1 are quoted in nickel increments.