Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Extend the Duration of the SizeQuote Mechanism Pilot, 4550-4552 [E7-1509]

Download as PDF 4550 Federal Register / Vol. 72, No. 20 / Wednesday, January 31, 2007 / Notices B. Self-Regulatory Organization’s Statement on Burden on Competition BSE 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. Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors or otherwise 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. IV. Solicitation of Comments III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the forgoing rule change does not: (1) Significantly affect the protection of investors or the public interest; (2) impose any significant burden on competition; and (3) become operative for 30 days after the date of this filing, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b– 4(f)(6) thereunder.11 A proposed rule change filed under 19b–4(f)(6) normally may not become operative prior to 30 days after the date of filing.12 However, Rule 19b– 4(f)(6)(iii) 13 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30-day operative delay. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver would permit position and exercise limits for options on IWM to continue at 500,000 option contracts for an approximately sixmonth pilot period. For this reason, the Commission designates the proposed rule change to be effective and operative upon filing with the Commission.14 At any time within 60 days of the filing of such proposed rule change the 10 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 12 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 19b–4(f)(6)(iii) requires that a self-regulatory organization submit to the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Commission has decided to waive the five-day pre-filing notice requirement. 13 Id. 14 For the purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 11 17 mstockstill on PROD1PC62 with NOTICES For the Commission, by the Division of Market Regulation, pursuant to delegated authority.15 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–1510 Filed 1–30–07; 8:45 am] VerDate Aug<31>2005 15:08 Jan 30, 2007 Jkt 211001 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 rulecomments@sec.gov. Please include File Number SR–BSE–2007–03 on the subject line. BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55174; File No. SR–CBOE– 2007–07] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Extend the Duration of the SizeQuote Mechanism Pilot January 25, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on January Paper Comments 17, 2007, the Chicago Board Options • Send paper comments in triplicate Exchange, Incorporated ( ‘‘Exchange’’ or to Nancy M. Morris, Secretary, ‘‘CBOE’’) filed with the Securities and Securities and Exchange Commission, Exchange Commission (the 100 F Street, NE., Washington, DC ‘‘Commission’’) the proposed rule 20549–1090. change as described in Items I, II, and All submissions should refer to File III below, which Items have been Number SR–BSE–2007–03. This file prepared substantially by the Exchange. number should be included on the The Exchange filed the proposal as a subject line if e-mail is used. To help the ‘‘non-controversial’’ proposed rule Commission process and review your change pursuant to Section comments more efficiently, please use 19(b)(3)(A)(iii) of the Act 3 and Rule only one method. The Commission will 19b–4(f)(6) thereunder,4 which renders post all comments on the Commission’s the proposal effective upon filing with Internet Web site (http://www.sec.gov/ the Commission.5 The Commission is rules/sro.shtml). Copies of the publishing this notice to solicit submission, all subsequent comments on the proposed rule change amendments, all written statements from interested persons. with respect to the proposed rule I. Self-Regulatory Organization’s change that are filed with the Statement of the Terms of Substance of Commission, and all written the Proposed Rule Change communications relating to the proposed rule change between the The Exchange proposes to extend the Commission and any person, other than pilot in CBOE Rule 6.74(f) pertaining to those that may be withheld from the the SizeQuote Mechanism, which is a public in accordance with the process by which a Floor Broker may provisions of 5 U.S.C. 552, will be execute and facilitate large-sized orders available for inspection and copying in in open outcry. The Exchange is the Commission’s Public Reference proposing to extend the pilot program, Room. Copies of the filing also will be which would otherwise expire on available for inspection and copying at February 15, 2007, through February 15, the principal office of BSE. All 2008. No other changes are being made comments received will be posted to the pilot program through this rule without change; the Commission does not edit personal identifying 15 17 CFR 200.30–3(a)(12). information from submissions. You 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. should submit only information that 3 15 U.S.C. 78s(b)(3)(A)(iii). you wish to make available publicly. All 4 17 CFR 240.19b–4(f)(6). submissions should refer to File 5 CBOE gave the Commission written notice of its Number SR–BSE–2007–03 and should intention to file the proposed rule change on be submitted on or before February 21, January 10, 2007. See Rule 19b–4(f)(6)(iii). 17 CFR 2007. 240.19b–4(f)(6)(iii). PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 E:\FR\FM\31JAN1.SGM 31JAN1 Federal Register / Vol. 72, No. 20 / Wednesday, January 31, 2007 / Notices filing.6 The text of the proposed rule change is available at http:// www.cboe.org/Legal, at the Exchange, 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, the Exchange 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 those statements may be examined at the places specified in Item IV below. The Exchange 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose mstockstill on PROD1PC62 with NOTICES CBOE Rule 6.74(f), which relates to the open outcry ‘‘SizeQuote’’ Mechanism, was approved on a pilot basis in February 2005 and was expanded to include solicited orders in January 2006.7 The pilot program has been extended once and is currently set to expire on February 15, 2007.8 The pilot program provides a process by which a Floor Broker, using his/her exercise of due diligence to execute orders at the best price(s), may execute and facilitate large-sized orders in open outcry. Under the pilot program, the ICMPs have priority to trade a SizeQuote Order at the best price communicated by the ICMPs in their 6 A separate rule change proposal has been filed and is currently pending with the Commission that would make amendments to the SizeQuote Mechanism. See SR–CBOE–2005–115 (proposal to modify the pilot program in various respects, including to permit a Floor Broker to execute the entire SizeQuote Order at a price at least one trading increment better than the best price communicated by the in-crowd market participants (‘‘ICMPs’’) in their responses to the SizeQuote request). 7 See Securities Exchange Act Release Nos. 51205 (February 15, 2005), 70 FR 8647 (February 22, 2005) (approving SR–CBOE–2004–72 on a pilot basis through February 15, 2006) and 53135 (January 17, 2006), 71 FR 3908 (January 24, 2006) (approving SR–CBOE–2005–83, which modified the pilot program to enable a Floor Broker to execute a SizeQuote Order with either a firm facilitation order, one or more solicited orders, or a combination of the Floor Broker’s facilitation order and such solicited order(s)). 8 See Securities Exchange Act Release No. 53252 (February 8, 2006), 71 FR 8012 (February 15, 2006) (immediately effective proposal, SR–CBOE–2006– 05, extending the pilot program from February 15, 2006 to February 15, 2007). VerDate Aug<31>2005 15:08 Jan 30, 2007 Jkt 211001 response to a Floor Broker’s SizeQuote request and at one increment better, while a Floor Broker can execute the entire SizeQuote Order with a facilitation order, one or more solicited orders, or a combination of solicited and facilitation orders at a price two trading increments better than the best price provided by the ICMPs in their response to the SizeQuote request. For purposes of the pilot program, the minimum qualifying order size is 250 contracts 9 and Floor Brokers must stand ready to facilitate the entire size of the order for which they request SizeQuotes. The instant rule change seeks to extend the existing pilot program, which would otherwise expire on February 15, 2007, through February 15, 2008. The Exchange notes that, as part of the original pilot program approval order and subsequent filing to extend the pilot program,10 the Exchange represented that it would provide the Commission a report at the end of the pilot period summarizing the effectiveness of the SizeQuote program. In that regard, though the SizeQuote Mechanism has been made available during the pilot period in all equity option classes traded on the Exchange for orders of 250 contracts or more, the Exchange’s continued experience has been that Floor Brokers have not generally availed themselves of the SizeQuote Mechanism to facilitate largesized orders.11 However, the Exchange continues to believe that the SizeQuote Mechanism enhances ICMPs’ ability and incentive to quote competitively and participate in open outcry trades while at the same time creates a process that gives greater certainty to Floor Brokers in the execution of large orders in that ICMPs only have one opportunity to respond with a quote response (which further enhances an ICMP’s incentive to quote competitively). The Exchange is therefore seeking to extend the existing pilot program for another year through February 15, 2008 in order to continue its evaluation of the utility of the SizeQuote Mechanism. 9 The appropriate Exchange committee determines the classes in which SizeQuote operates and may vary the minimum qualifying order size, provided that such number may not be less than 250 contracts. 10 See notes 7 and 8, supra. 11 The Exchange believes the SizeQuote Mechanism has not been actively utilized due to some of the limitations and risks inherent in the original design of the pilot program. Thus, CBOE expanded the pilot program to include solicited orders. Originally the pilot program only applied to facilitation orders. See note 7, supra. CBOE has also proposed to modify the pilot program in various other respects. See note 6, supra. PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 4551 2. Statutory Basis The Exchange believes the proposed rule change is consistent with Section 6(b) of the Act 12 in general and furthers the objectives of Section 6(b)(5) of the Act 13 in particular in that it is designed to promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system, and protect investors and the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition CBOE 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 The Exchange neither solicited nor received comments on the proposal. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, provided that the selfregulatory organization has given the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change or such shorter time as designated by the Commission, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 14 and Rule 19b–4(f)(6) thereunder.15 At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and 12 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 14 15 U.S.C. 78s(b)(3)(A). 15 17 CFR 240.19b–4(f)(6). 13 15 E:\FR\FM\31JAN1.SGM 31JAN1 4552 Federal Register / Vol. 72, No. 20 / Wednesday, January 31, 2007 / Notices 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: SECURITIES AND EXCHANGE COMMISSION Electronic Comments Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change Relating to Listing Standards for Basket Linked Notes • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2007–07 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. mstockstill on PROD1PC62 with NOTICES All submissions should refer to File Number SR–CBOE–2007–07. 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–2007–07 and should be submitted on or before February 21, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.16 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–1509 Filed 1–30–07; 8:45 am] [Release No. 34–55173; File No. SR–Phlx– 2006–85] January 25, 2007. 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 December 12, 2006, the Philadelphia Stock Exchange, Inc. (‘‘Phlx’’ 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 Phlx. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Phlx proposes to amend Phlx Rule 803—Criteria for Listing—Tier 1, regarding listing standards for Basket Linked Notes (‘‘BLNs’’). The text of the proposed rule change is available on Phlx’s Web site at http://www.phlx.com, at Phlx’s principal office, 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, the Phlx 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 Phlx 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 The purpose of the proposed rule change is to conform Phlx’s listing standards for Basket Linked Notes, specifically Phlx Rule 803(k), to that of other exchanges. Phlx Rule 803 provides listing standards for Basket Linked BILLING CODE 8011–01–P 1 15 16 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 15:08 Jan 30, 2007 2 17 Jkt 211001 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00076 Fmt 4703 Sfmt 4703 Notes, which are income instruments whose values are linked to the performance of highly capitalized, actively traded common stock. Specifically, BLNs are non-convertible debt of an issuer, whose value is based, at least in part, on the value of another issuer’s common stock or nonconvertible preferred stock. Phlx Rule 803(k) details Phlx’s listing standards for BLNs. Specifically, Phlx Rule 803(k)(3) currently requires, among other things, that securities linked to BLNs either: (i) Have a minimum market capitalization of $3 billion and during the 12 months preceding listing are shown to have traded at least 2.5 million shares; (ii) have a minimum market capitalization of $1.5 billion and during the 12 months preceding listing are shown to have traded at least 10 million shares; or (iii) have a minimum market capitalization of $500 million and during the 12 months preceding listing are shown to have traded at least 15 million shares. On December 7, 2000, the Commission granted authority to the Phlx to list and trade notes linked to more than one equity security.3 Each of the underlying securities of a BLN is required to meet the standards for linked securities set forth in Phlx Rule 803(k). However, the 2000 Order limited the basket of underlying securities that may to be linked to a BLN to no more than twenty. At this time, Phlx proposes to increase the number of underlying securities that may be linked to a BLN from no more than 20 to no more than thirty.4 The Phlx believes that expanding the basket of equity securities that may be linked to a BLN will enhance competition and benefit investors and the marketplace through additional product choices and alternatives. The Phlx also believes that there would be no investor protection concerns with expanding the number of equity securities that may be linked to a BLN from more than one common stock to up to thirty common stocks. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 5 in general, and furthers the objectives of Section 6(b)(5) of the Act 6 3 See Securities Exchange Act Release No. 43690 (December 7, 2000), 65 FR 78523 (December 15, 2000) (SR–Phlx–2000–90) (‘‘2000 Order’’). 4 This is identical to the listing standard of the American Stock Exchange (Amex Company Guide Section 107B); see Securities Exchange Act Release No. 47055 (December 19, 2002), 67 FR 79669 (December 30, 2002) (SR–Amex–2002–110). 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(5). E:\FR\FM\31JAN1.SGM 31JAN1

Agencies

[Federal Register Volume 72, Number 20 (Wednesday, January 31, 2007)]
[Notices]
[Pages 4550-4552]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-1509]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55174; File No. SR-CBOE-2007-07]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change to Extend the Duration of the SizeQuote Mechanism Pilot

January 25, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on January 17, 2007, the Chicago Board Options Exchange, 
Incorporated ( ``Exchange'' or ``CBOE'') filed with the Securities and 
Exchange Commission (the ``Commission'') the proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
substantially by the Exchange. The Exchange filed the proposal as a 
``non-controversial'' proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ 
which renders the proposal effective upon filing with the 
Commission.\5\ 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
    \5\ CBOE gave the Commission written notice of its intention to 
file the proposed rule change on January 10, 2007. See Rule 19b-
4(f)(6)(iii). 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

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

    The Exchange proposes to extend the pilot in CBOE Rule 6.74(f) 
pertaining to the SizeQuote Mechanism, which is a process by which a 
Floor Broker may execute and facilitate large-sized orders in open 
outcry. The Exchange is proposing to extend the pilot program, which 
would otherwise expire on February 15, 2007, through February 15, 2008. 
No other changes are being made to the pilot program through this rule

[[Page 4551]]

filing.\6\ The text of the proposed rule change is available at http://
www.cboe.org/Legal, at the Exchange, and at the Commission's Public 
Reference Room.
---------------------------------------------------------------------------

    \6\ A separate rule change proposal has been filed and is 
currently pending with the Commission that would make amendments to 
the SizeQuote Mechanism. See SR-CBOE-2005-115 (proposal to modify 
the pilot program in various respects, including to permit a Floor 
Broker to execute the entire SizeQuote Order at a price at least one 
trading increment better than the best price communicated by the in-
crowd market participants (``ICMPs'') in their responses to the 
SizeQuote request).
---------------------------------------------------------------------------

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

    In its filing with the Commission, the Exchange 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 those statements may be examined at the places specified in 
Item IV below. The Exchange 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    CBOE Rule 6.74(f), which relates to the open outcry ``SizeQuote'' 
Mechanism, was approved on a pilot basis in February 2005 and was 
expanded to include solicited orders in January 2006.\7\ The pilot 
program has been extended once and is currently set to expire on 
February 15, 2007.\8\ The pilot program provides a process by which a 
Floor Broker, using his/her exercise of due diligence to execute orders 
at the best price(s), may execute and facilitate large-sized orders in 
open outcry. Under the pilot program, the ICMPs have priority to trade 
a SizeQuote Order at the best price communicated by the ICMPs in their 
response to a Floor Broker's SizeQuote request and at one increment 
better, while a Floor Broker can execute the entire SizeQuote Order 
with a facilitation order, one or more solicited orders, or a 
combination of solicited and facilitation orders at a price two trading 
increments better than the best price provided by the ICMPs in their 
response to the SizeQuote request. For purposes of the pilot program, 
the minimum qualifying order size is 250 contracts \9\ and Floor 
Brokers must stand ready to facilitate the entire size of the order for 
which they request SizeQuotes.
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release Nos. 51205 (February 15, 
2005), 70 FR 8647 (February 22, 2005) (approving SR-CBOE-2004-72 on 
a pilot basis through February 15, 2006) and 53135 (January 17, 
2006), 71 FR 3908 (January 24, 2006) (approving SR-CBOE-2005-83, 
which modified the pilot program to enable a Floor Broker to execute 
a SizeQuote Order with either a firm facilitation order, one or more 
solicited orders, or a combination of the Floor Broker's 
facilitation order and such solicited order(s)).
    \8\ See Securities Exchange Act Release No. 53252 (February 8, 
2006), 71 FR 8012 (February 15, 2006) (immediately effective 
proposal, SR-CBOE-2006-05, extending the pilot program from February 
15, 2006 to February 15, 2007).
    \9\ The appropriate Exchange committee determines the classes in 
which SizeQuote operates and may vary the minimum qualifying order 
size, provided that such number may not be less than 250 contracts.
---------------------------------------------------------------------------

    The instant rule change seeks to extend the existing pilot program, 
which would otherwise expire on February 15, 2007, through February 15, 
2008. The Exchange notes that, as part of the original pilot program 
approval order and subsequent filing to extend the pilot program,\10\ 
the Exchange represented that it would provide the Commission a report 
at the end of the pilot period summarizing the effectiveness of the 
SizeQuote program. In that regard, though the SizeQuote Mechanism has 
been made available during the pilot period in all equity option 
classes traded on the Exchange for orders of 250 contracts or more, the 
Exchange's continued experience has been that Floor Brokers have not 
generally availed themselves of the SizeQuote Mechanism to facilitate 
large-sized orders.\11\ However, the Exchange continues to believe that 
the SizeQuote Mechanism enhances ICMPs' ability and incentive to quote 
competitively and participate in open outcry trades while at the same 
time creates a process that gives greater certainty to Floor Brokers in 
the execution of large orders in that ICMPs only have one opportunity 
to respond with a quote response (which further enhances an ICMP's 
incentive to quote competitively). The Exchange is therefore seeking to 
extend the existing pilot program for another year through February 15, 
2008 in order to continue its evaluation of the utility of the 
SizeQuote Mechanism.
---------------------------------------------------------------------------

    \10\ See notes 7 and 8, supra.
    \11\ The Exchange believes the SizeQuote Mechanism has not been 
actively utilized due to some of the limitations and risks inherent 
in the original design of the pilot program. Thus, CBOE expanded the 
pilot program to include solicited orders. Originally the pilot 
program only applied to facilitation orders. See note 7, supra. CBOE 
has also proposed to modify the pilot program in various other 
respects. See note 6, supra.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Act \12\ in general and furthers the objectives of 
Section 6(b)(5) of the Act \13\ in particular in that it is designed to 
promote just and equitable principles of trade, remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system, and protect investors and the public interest.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    CBOE 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

    The Exchange neither solicited nor received comments on the 
proposal.

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

    Because the foregoing rule does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest, provided that the self-regulatory organization 
has given the Commission written notice of its intent to file the 
proposed rule change at least five business days prior to the date of 
filing of the proposed rule change or such shorter time as designated 
by the Commission, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \14\ and Rule 19b-4(f)(6) 
thereunder.\15\
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and

[[Page 4552]]

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-2007-07 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2007-07. 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-2007-07 and should be submitted on or before 
February 21, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-1509 Filed 1-30-07; 8:45 am]
BILLING CODE 8011-01-P