Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Increase the Class Quoting Limit in Several Option Classes, 19997-19998 [E7-7554]

Download as PDF 19997 Federal Register / Vol. 72, No. 76 / Friday, April 20, 2007 / Notices The Commission finds good cause, pursuant to Section 19(b)(2) of the Act,22 for approving the proposed rule change, as modified by Amendment No. 1, prior to the thirtieth day after the date of publication of notice in the Federal Register. The Commission notes that the proposal is consistent with the Exchange’s listing and trading standards in CBOE Rules 5.3 and 5.4, and the Commission has recently approved a similar proposal, after publishing it for a full comment period and receiving no comments.23 Therefore, the Commission does not believe that the proposed rule change, as amended, raises novel regulatory issues. Consequently, the Commission believes that it is appropriate to permit investors to benefit from the flexibility afforded by trading these products without delay. Accordingly, the Commission finds that there is good cause, consistent with Section 6(b)(5) of the Act,24 to approve the proposal, as amended, on an accelerated basis. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,25 that the proposed rule change (SR–CBOE–2007– 21), as modified by Amendment No. 1, be, and is hereby approved on an accelerated basis. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.26 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–7494 Filed 4–19–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55637; File No. SR–CBOE– 2007–35] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Increase the Class Quoting Limit in Several Option Classes April 16, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 22 15 U.S.C. 78s(b)(2). Securities Exchange Act Release No. 55547 (March 28, 2007), 72 FR 16388 (April 4, 2007) (SR– Amex–2006–110). 24 15 U.S.C. 78s(b)(5). 25 15 U.S.C. 78s(b)(2). 26 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. sroberts on PROD1PC70 with NOTICES 23 See VerDate Aug<31>2005 18:52 Apr 19, 2007 Jkt 211001 notice is hereby given that on April 10, 2007, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ 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 substantially prepared by the CBOE. The Exchange has designated this proposal as one constituting a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule under Section 19(b)(3)(A)(i) of the Act,3 and Rule 19b–4(f)(1) thereunder,4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 40, depending on the trading activity of the particular product. Rule 8.3A, Interpretation .01(c) provides a procedure by which the President of the Exchange may increase the CQL for a particular product. In this regard, the President of the Exchange may increase the CQL in exceptional circumstances, which are defined in the rule as ‘‘substantial trading volume, whether actual or expected.’’ 6 The effect of an increase in the CQL is procompetitive in that it increases the number of market participants that may quote electronically in a product. The purpose of this filing is to increase the CQL in the following option classes as described below: I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change American Home Mortgage Investment Corp. (AHM) .............. Dendreon Corporation (DNDN) ..................... Imergent Inc. (IIG) ........ Accredited Home Lenders Holding (LEND) ... Novastar Financial, Inc. (NFI) .......................... Neurochem, Inc. (NRMX) ..................... CBOE proposes to increase the class quoting limit in several option classes. The text of the proposed rule change is available on CBOE’s Web site (http:// www.cboe.com), 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, CBOE 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 CBOE 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 CBOE Rule 8.3A, Maximum Number of Market Participants Quoting Electronically per Product, establishes class quoting limits (‘‘CQLs’’) for each class traded on the Hybrid Trading System.5 A CQL is the maximum number of quoters that may quote electronically in a given product and the current levels are established from 25– 3 15 U.S.C. 78s(b)(3)(A)(i). CFR 240.19b–4(f)(1). 5 See Rule 8.3A.01. 4 17 PO 00000 Frm 00122 Fmt 4703 Sfmt 4703 Option class Current CQL New CQL 25 30 25 25 40 30 35 45 30 40 25 35 The trading volume in these option classes recently has increased substantially. Increasing the CQL in these classes will enable the Exchange to enhance the liquidity offered, thereby offering deeper and more liquid markets. 2. Statutory Basis Accordingly, CBOE 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.7 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 8 requirements 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 6 ‘‘Any actions taken by the President of the Exchange pursuant to this paragraph will be submitted to the SEC in a rule filing pursuant to Section 19(b)(3)(A) of the Exchange Act.’’ Rule 8.3A.01(c). 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5). E:\FR\FM\20APN1.SGM 20APN1 19998 Federal Register / Vol. 72, No. 76 / Friday, April 20, 2007 / Notices 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 received nor solicited written comments on the proposal. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change will take effect upon filing with the Commission pursuant to Section 19(b)(3)(A)(i) of the Act 9 and Rule 19b– 4(f)(1) thereunder,10 because it constitutes a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule. At any time within 60 days of the filing of the 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 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–2007–35 and should be submitted on or before May 11, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.11 Nancy M. Morris, Secretary. [FR Doc. E7–7554 Filed 4–19–07; 8:45 am] 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–2007–35 on the subject line. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55625; File No. SR–CHX– 2007–08] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change To Expand Its Price Manipulation Rule To Address Additional Instances of Improper Behavior April 12, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 • Send paper comments in triplicate (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 to Nancy M. Morris, Secretary, notice is hereby given that on March 21, Securities and Exchange Commission, 2007, the Chicago Stock Exchange, Inc. 100 F Street, NE., Washington, DC (‘‘CHX’’ or ‘‘Exchange’’) filed with the 20549–1090. Securities and Exchange Commission (‘‘Commission’’) the proposed rule All submissions should refer to File change as described in Items I, II and III Number SR–CBOE–2007–35. This file below, which Items have been number should be included on the subject line if e-mail is used. To help the substantially prepared by the CHX. The Commission is publishing this notice to Commission process and review your solicit comments on the proposed rule comments more efficiently, please use only one method. The Commission will change from interested persons. post all comments on the Commission’s sroberts on PROD1PC70 with NOTICES Paper Comments 11 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 CFR 240.19b–4. U.S.C. 78s(b)(3)(A)(i). CFR 240.19b–4(f)(1). 10 17 VerDate Aug<31>2005 18:52 Apr 19, 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 CHX 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 CHX has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. BILLING CODE 8010–01–P 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: 9 15 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its rule relating to price manipulation to address two separate instances of improper activity: (1) Manipulative conduct consisting of a single event (in addition to a series of events, as the current rule contemplates) and (2) manipulation based upon the entry of orders as opposed to that based solely upon the entry of trades. The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and http:// www.chx.com/rules/ proposed_rules.htm. PO 00000 Frm 00123 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose Through this proposal, the Exchange seeks to amend its rule relating to price manipulation to address two separate instances of improper activity: (1) Manipulative conduct consisting of a single event (in addition to a series of events, as the current rule contemplates) and (2) manipulation based upon the entry of orders as opposed to that based solely upon the entry of trades.3 As an initial matter, the Exchange believes that these changes to the rule would appropriately establish that improper price manipulation could occur, in certain circumstances, when orders are entered at successively higher or lower prices, not just upon the execution of a series of trades at successively higher or lower prices. Order-based manipulation, sometimes called spoofing, may be intended to take advantage of algorithms or electronic traders who focus on changes to the bid or offer in trading. In such situations, 3 The proposal would also expand the rule to address conduct by persons associated with a participant firm, in addition to the firm’s partners, directors, officers and registered employees. E:\FR\FM\20APN1.SGM 20APN1

Agencies

[Federal Register Volume 72, Number 76 (Friday, April 20, 2007)]
[Notices]
[Pages 19997-19998]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-7554]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55637; File No. SR-CBOE-2007-35]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Increase the Class Quoting Limit in Several Option 
Classes

April 16, 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 April 10, 2007, the Chicago Board Options Exchange, Incorporated 
(``CBOE'' 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 substantially 
prepared by the CBOE. The Exchange has designated this proposal as one 
constituting a stated policy, practice, or interpretation with respect 
to the meaning, administration, or enforcement of an existing rule 
under Section 19(b)(3)(A)(i) of the Act,\3\ and Rule 19b-4(f)(1) 
thereunder,\4\ which renders the proposal effective upon filing with 
the Commission. 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)(i).
    \4\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE proposes to increase the class quoting limit in several option 
classes. The text of the proposed rule change is available on CBOE's 
Web site (http://www.cboe.com), 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, CBOE 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 CBOE 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
    CBOE Rule 8.3A, Maximum Number of Market Participants Quoting 
Electronically per Product, establishes class quoting limits (``CQLs'') 
for each class traded on the Hybrid Trading System.\5\ A CQL is the 
maximum number of quoters that may quote electronically in a given 
product and the current levels are established from 25-40, depending on 
the trading activity of the particular product.
---------------------------------------------------------------------------

    \5\ See Rule 8.3A.01.
---------------------------------------------------------------------------

    Rule 8.3A, Interpretation .01(c) provides a procedure by which the 
President of the Exchange may increase the CQL for a particular 
product. In this regard, the President of the Exchange may increase the 
CQL in exceptional circumstances, which are defined in the rule as 
``substantial trading volume, whether actual or expected.'' \6\ The 
effect of an increase in the CQL is procompetitive in that it increases 
the number of market participants that may quote electronically in a 
product. The purpose of this filing is to increase the CQL in the 
following option classes as described below:
---------------------------------------------------------------------------

    \6\ ``Any actions taken by the President of the Exchange 
pursuant to this paragraph will be submitted to the SEC in a rule 
filing pursuant to Section 19(b)(3)(A) of the Exchange Act.'' Rule 
8.3A.01(c).

------------------------------------------------------------------------
                                                       Current
                    Option class                         CQL     New CQL
------------------------------------------------------------------------
American Home Mortgage Investment Corp. (AHM).......        25        30
Dendreon Corporation (DNDN).........................        25        40
Imergent Inc. (IIG).................................        25        30
Accredited Home Lenders Holding (LEND)..............        35        45
Novastar Financial, Inc. (NFI)......................        30        40
Neurochem, Inc. (NRMX)..............................        25        35
------------------------------------------------------------------------

    The trading volume in these option classes recently has increased 
substantially. Increasing the CQL in these classes will enable the 
Exchange to enhance the liquidity offered, thereby offering deeper and 
more liquid markets.
2. Statutory Basis
    Accordingly, CBOE 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.\7\ Specifically, the Exchange believes the 
proposed rule change is consistent with the Section 6(b)(5) \8\ 
requirements 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.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 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

[[Page 19998]]

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 received nor solicited written comments on the 
proposal.

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

    The foregoing proposed rule change will take effect upon filing 
with the Commission pursuant to Section 19(b)(3)(A)(i) of the Act \9\ 
and Rule 19b-4(f)(1) thereunder,\10\ because it constitutes a stated 
policy, practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A)(i).
    \10\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the 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-2007-35 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-2007-35. 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-2007-35 and should be submitted on or before May 
11, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E7-7554 Filed 4-19-07; 8:45 am]
BILLING CODE 8010-01-P