Untitled DocumentFrom: daniel torres [danieltorresfp@wanadoo.es] Sent: Wednesday, September 03, 2003 2:34 PM To: rule-comments@sec.gov Cc: ibmgmt@interactivebrokers.com Subject: BOX rules I am sending you this e-mail because as an individual investor I totally and absolutely favor any change that benefits the small investor. I believe the new rules on the Boston Exchange will help me and other small investors. I hope you approve very fast these new rules. Regards, Daniel Torres. -----Mensaje original----- De: Thomas Peterffy, Chairman [mailto:ibmgmt@interactivebrokers.com] Enviado el: miércoles, 03 de septiembre de 2003 1:00 Para: danieltorresfp@wanadoo.es Asunto: Boston Options Exchange September 2, 2003 Dear Interactive Brokers Customer: As you are probably aware, Interactive Brokers Group has been a major sponsor of the Boston Options Exchange (BOX). In addition to being a pure electronic exchange, BOX's major distinguishing feature is the Price Improvement Period (PIP). By using the PIP, an order flow provider such as Interactive Brokers may designate a marketable order for price improvement, which means that the order will be auctioned off among market participants, in pennies, to generate the best price for the order. The execution price will be guaranteed to be better than the best price available at all the other exchanges at that moment (i.e., better than the prevailing "NBBO"). In addition, customers may also participate in the PIP, in direct competition with market makers. You could, for example, tell us that you are bidding $2.20 for a particular option but are willing to go up to $2.22 if a PIP of a sell order in that option takes place. In this case, IB would bid $2.20 and if a PIP started we would match the initial PIP bid price of $2.21. If the bid for the PIP order is raised to $2.22, we would match that bid on your behalf. Alternatively, you could tell us to bid $2.22 in a PIP right from the start, so as to give you time priority. The end result is that you have a chance, for the first time in the U.S. options market, to trade against other orders between the quotes. We think that the introduction of BOX will be of great benefit to public customers because there will be price improvement over NBBO. Also, because customers may participate on both sides of a PIP, there will be more customer-to-customer trades. We believe that all of this will make the effective spread you pay, and with that your total transaction cost for trading, diminish. The proposed BOX rules have been published on the SEC website for a 21-day comment period ending on September 12. For more information on BOX, or to read the BOX rules, go to www.bostonoptions.com or go to the "SRO Rulemaking" section of the SEC website at http://www.sec.gov/rules/sro.shtml. Chapter V, Section 18 of the rules describes the PIP process. We have received indications that the existing option exchanges, in their effort to protect their franchise, are planning to fight the introduction of BOX. We would like to ask you to read about BOX or to read the relevant parts of the proposed rules. If you agree with us, as we hope you will, please send a simple letter to the SEC telling them what you like about the proposed exchange and asking them to approve it promptly. You can send an e-mail to rule-comments@sec.gov or if you prefer, you can send a hard copy letter. Letters and e-mails should reference "BOX - SR-BSE-2002-15" and should be sent to: Jonathan G. Katz, Secretary Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549-0609 We appreciate your consideration of this issue. Our goal remains to provide you with the best possible market access at the lowest possible trading cost. Sincerely, Thomas Peterffy, Chairman