Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Request Permanent Approval of a Pilot Program Relating to Market-Makers Quoting Remotely, 10795-10796 [E7-4191]

Download as PDF Federal Register / Vol. 72, No. 46 / Friday, March 9, 2007 / Notices Number SR–Amex–2007–17 and should be submitted on or before March 30, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.20 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–4190 Filed 3–8–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55381; File No. SR–CBOE– 2007–18] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Request Permanent Approval of a Pilot Program Relating to Market-Makers Quoting Remotely March 1, 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 February 22, 2007, the Chicago Board Options Exchange, Incorporated (‘‘Exchange’’ or ‘‘CBOE’’) 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 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 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 jlentini on PROD1PC65 with NOTICES CBOE proposes to amend CBOE Rule 8.3 to request permanent approval of a pilot program relating to Market-Makers quoting away from CBOE’s trading floor. The text of the proposed rule change is available on CBOE’s Web site (http:// www.cboe.org/Legal), at the CBOE’s Office of the Secretary, and at the Commission’s Public Reference Room. 20 17 CFR 200.30–3(a)(12). 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). 1 15 VerDate Aug<31>2005 21:24 Mar 08, 2007 Jkt 211001 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 these 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 Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to request permanent approval of an existing Pilot Program that allows a CBOE Market-Maker to submit electronic quotations away from CBOE’s trading floor in his/her appointed Hybrid Classes and Hybrid 2.0 Classes. In March 2005, CBOE amended its rules relating to Market-Maker appointments and quoting obligations.5 Among other changes, CBOE amended Rule 8.3 to provide that a Market-Maker may submit electronic quotations from a location outside of his/her appointed trading station.6 Previously, MarketMakers were only permitted to stream electronic quotations in their appointed Hybrid and Hybrid 2.0 classes when they were physically present in the trading crowd. In making this change, CBOE determined to request that it only be approved on a pilot basis to give CBOE the ability to evaluate the effectiveness of allowing Market-Makers to quote remotely. CBOE extended the Pilot Program for an additional year last March 2006.7 The current Pilot Program is scheduled to expire on March 24, 2007. CBOE believes that the Pilot Program has been successful, in that it allows Market-Makers to choose how they 5 See Securities Exchange Act Release No. 51429 (March 24, 2005), 70 FR 16536 (March 31, 2005) (approving SR–CBOE–2004–58). 6 Last year, CBOE amended its rules to allow Market-Makers to create a ‘‘Virtual Trading Crowd’’ appointment, and also modified the language in Rule 8.3(c) such that it states a Market-Maker can quote electronically away from CBOE’s trading floor pursuant to the Pilot Program. (See Securities Exchange Act Release No. 54182 (July 20, 2006), 71 FR 42692 (July 20, 2006) (approving SR–CBOE– 2006–51).) 7 See Securities Exchange Act Release No. 53410 (March 3, 2006), 71 FR 12747 (March 13, 2006) (granting immediate effectiveness to SR–CBOE– 2006–24). PO 00000 Frm 00166 Fmt 4703 Sfmt 4703 10795 would like to participate in CBOE’s Hybrid Trading System, i.e., electronically, in open outcry, or both. Although not all Market-Makers have chosen to quote electronically away from CBOE’s trading floor in their appointed Hybrid Classes and Hybrid 2.0 Classes, those Market-Makers that have availed themselves of this Pilot Program continue to provide liquidity and increased competition in their appointed option classes when they quote remotely. CBOE has not experienced any negative effects of allowing Market-Makers to quote from a location away from CBOE’s trading floor. Thus, CBOE believes it would be appropriate and beneficial to permanently approve the Pilot Program, and permit Market-Makers to continue to have the option to quote electronically away from CBOE’s trading floor. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations under the Act applicable to a national securities exchange and, in particular, the requirements of Section 6(b) of the Act.8 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) of the Act,9 which requires that the rules of an exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts and, in general, to 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 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 The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act 10 and subparagraph (f)(6) of Rule 19b–4 11 8 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 10 15 U.S.C. 78s(b)(3)(A)(iii). 11 17 CFR 240.19b–4(f)(6). 9 15 E:\FR\FM\09MRN1.SGM 09MRN1 10796 Federal Register / Vol. 72, No. 46 / Friday, March 9, 2007 / Notices Section, 100 F Street, NE., Washington, DC 20549. 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–2007–18 and should be submitted on or before March 30, 2007. 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: BILLING CODE 8010–01–P 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–CBOE–2007–18 on the subject line. jlentini on PROD1PC65 with NOTICES thereunder because it does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate; and the Exchange has given the Commission written notice of its intention to file the proposed rule change at least five business days prior to filing. 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. Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to New York Governing Law For the Commission, by the Division of Market Regulation, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–4191 Filed 3–8–07; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55390; File No. SR–DTC– 2007–03] March 2, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 Paper Comments (‘‘Act’’),1 notice is hereby given that on • Send paper comments in triplicate February 8, 2007, The Depository Trust to Nancy M. Morris, Secretary, Company (‘‘DTC’’) filed with the Securities and Exchange Commission, Securities and Exchange Commission 100 F Street, NE., Washington, DC (‘‘Commission’’) the proposed rule 20549–1090. change as described in Items I, II, and III below, which Items have been All submissions should refer to File prepared substantially by DTC. DTC Number SR–CBOE–2007–18. This file filed the proposed rule change pursuant number should be included on the subject line if e-mail is used. To help the to Section 19(b)(3)(A)(i) of the Act2 and Rule 19b–4(f)(1)3 thereunder so that the Commission process and review your proposal was effective upon filing with comments more efficiently, please use only one method. The Commission will the Commission. The Commission is post all comments on the Commission’s publishing this notice to solicit comments on the proposed rule change Internet Web site (http://www.sec.gov/ from interested persons. rules/sro.shtml). Copies of the submission, all subsequent I. Self-Regulatory Organization’s amendments, all written statements Statement of the Terms of Substance of with respect to the proposed rule the Proposed Rule Change change that are filed with the Commission, and all written DTC is adding a new Section 4 to Rule communications relating to the 1 (Definitions) to clarify that the Byproposed rule change between the Laws, Rules, and Procedures are Commission and any person, other than governed by New York state law. those that may be withheld from the public in accordance with the 12 17 CFR 200.30–3(a)(12). provisions of 5 U.S.C. 552, will be 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78s(b)(3)(A)(i). available for inspection and copying in 3 17 CFR 240.19b–4(f)(1). the Commission’s Public Reference VerDate Aug<31>2005 21:24 Mar 08, 2007 Jkt 211001 PO 00000 Frm 00167 Fmt 4703 Sfmt 4703 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, DTC 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. DTC 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 DTC is adding a new Section 4 to Rule 1 to clarify that the By-Laws, Rules, and Procedures are governed by New York state law. DTC’s participant’s and pledgee’s agreements currently specify this choice of law, but DTC wishes to add such language explicitly to its rules for transparency purposes and to harmonize DTC’s rules with those of its clearing agency affliliates, the Fixed Income Clearing Corporation and the National Securities Clearing Corporation. DTC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act4 and the rules and regulations thereunder applicable to DTC because the proposed change is a clarification that does not adversely affect the safeguarding of securities and funds in the custody or control of the clearing agency or for which it is responsible and does not adversely affect the respective rights or obligations of the clearing agency or its members. B. Self-Regulatory Organization’s Statement on Burden on Competition DTC does not believe that the proposed rule change will have any impact or impose any burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others DTC has not solicited or received written comments relating to the proposed rule change. DTC will notify the Commission of any written comments it receives. 4 15 U.S.C. 78q–1. E:\FR\FM\09MRN1.SGM 09MRN1

Agencies

[Federal Register Volume 72, Number 46 (Friday, March 9, 2007)]
[Notices]
[Pages 10795-10796]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-4191]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55381; File No. SR-CBOE-2007-18]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Request Permanent Approval of a Pilot Program Relating 
to Market-Makers Quoting Remotely

March 1, 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 February 22, 2007, the Chicago Board Options Exchange, Incorporated 
(``Exchange'' or ``CBOE'') 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 
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\ The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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    \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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE proposes to amend CBOE Rule 8.3 to request permanent approval 
of a pilot program relating to Market-Makers quoting away from CBOE's 
trading floor. The text of the proposed rule change is available on 
CBOE's Web site (http://www.cboe.org/Legal), at the CBOE's Office of 
the Secretary, 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 these 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to request permanent 
approval of an existing Pilot Program that allows a CBOE Market-Maker 
to submit electronic quotations away from CBOE's trading floor in his/
her appointed Hybrid Classes and Hybrid 2.0 Classes. In March 2005, 
CBOE amended its rules relating to Market-Maker appointments and 
quoting obligations.\5\ Among other changes, CBOE amended Rule 8.3 to 
provide that a Market-Maker may submit electronic quotations from a 
location outside of his/her appointed trading station.\6\ Previously, 
Market-Makers were only permitted to stream electronic quotations in 
their appointed Hybrid and Hybrid 2.0 classes when they were physically 
present in the trading crowd. In making this change, CBOE determined to 
request that it only be approved on a pilot basis to give CBOE the 
ability to evaluate the effectiveness of allowing Market-Makers to 
quote remotely. CBOE extended the Pilot Program for an additional year 
last March 2006.\7\ The current Pilot Program is scheduled to expire on 
March 24, 2007.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 51429 (March 24, 
2005), 70 FR 16536 (March 31, 2005) (approving SR-CBOE-2004-58).
    \6\ Last year, CBOE amended its rules to allow Market-Makers to 
create a ``Virtual Trading Crowd'' appointment, and also modified 
the language in Rule 8.3(c) such that it states a Market-Maker can 
quote electronically away from CBOE's trading floor pursuant to the 
Pilot Program. (See Securities Exchange Act Release No. 54182 (July 
20, 2006), 71 FR 42692 (July 20, 2006) (approving SR-CBOE-2006-51).)
    \7\ See Securities Exchange Act Release No. 53410 (March 3, 
2006), 71 FR 12747 (March 13, 2006) (granting immediate 
effectiveness to SR-CBOE-2006-24).
---------------------------------------------------------------------------

    CBOE believes that the Pilot Program has been successful, in that 
it allows Market-Makers to choose how they would like to participate in 
CBOE's Hybrid Trading System, i.e., electronically, in open outcry, or 
both. Although not all Market-Makers have chosen to quote 
electronically away from CBOE's trading floor in their appointed Hybrid 
Classes and Hybrid 2.0 Classes, those Market-Makers that have availed 
themselves of this Pilot Program continue to provide liquidity and 
increased competition in their appointed option classes when they quote 
remotely. CBOE has not experienced any negative effects of allowing 
Market-Makers to quote from a location away from CBOE's trading floor. 
Thus, CBOE believes it would be appropriate and beneficial to 
permanently approve the Pilot Program, and permit Market-Makers to 
continue to have the option to quote electronically away from CBOE's 
trading floor.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations under the Act applicable to a 
national securities exchange and, in particular, the requirements of 
Section 6(b) of the Act.\8\ Specifically, the Exchange believes the 
proposed rule change is consistent with the Section 6(b)(5) of the 
Act,\9\ which requires that the rules of an exchange be designed to 
promote just and equitable principles of trade, to prevent fraudulent 
and manipulative acts and, in general, to protect investors and the 
public interest.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 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

    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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(iii) of the Act \10\ and subparagraph (f)(6) of Rule 19b-4 
\11\

[[Page 10796]]

thereunder because it does not: (i) Significantly affect the protection 
of investors or the public interest; (ii) impose any significant burden 
on competition; (iii) become operative for 30 days from the date on 
which it was filed, or such shorter time as the Commission may 
designate; and the Exchange has given the Commission written notice of 
its intention to file the proposed rule change at least five business 
days prior to filing.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 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 
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-2007-18 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-2007-18. 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 Section, 100 F Street, 
NE., Washington, DC 20549. 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-2007-18 and should be 
submitted on or before March 30, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-4191 Filed 3-8-07; 8:45 am]
BILLING CODE 8010-01-P