Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Duration of CBOE Rule 6.45A(b) Pertaining to Orders Represented in Open Outcry, 25348-25350 [E7-8505]
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25348
Federal Register / Vol. 72, No. 86 / Friday, May 4, 2007 / Notices
in the Act, or, in the case of a Fund
whose public shareholders purchased
shares on the basis of a prospectus
containing the disclosure contemplated
by condition 2 below, by the sole initial
shareholder before offering the Fund’s
shares to the public.
2. Each Fund will disclose in its
prospectus the existence, substance, and
effect of any order granted pursuant to
the application. In addition, each Fund
will hold itself out to the public as
employing the management structure
described in the application. The
prospectus will prominently disclose
that the Adviser has ultimate
responsibility, subject to oversight by
the Board, to oversee Subadvisers and
recommend their hiring, termination,
and replacement.
3. Within 90 days of the hiring of a
new Subadviser, the affected Fund
shareholders will be furnished all the
information about the new Subadviser
that would be included in a proxy
statement, except as modified to permit
Aggregate Fee Disclosure. This
information will include Aggregate Fee
Disclosure and any change in such
disclosure caused by the addition of the
new Subadviser. To meet this
obligation, the Fund will provide
shareholders within 90 days of the
hiring of a new Subadviser with an
information statement meeting the
requirements of Regulation 14C,
Schedule 14C, and Item 22 of Schedule
14A under the 1934 Act, except as
modified by the order to permit
Aggregate Fee Disclosure.
4. The Adviser will not enter into a
Subadvisory Agreement with any
Affiliated Subadviser without that
agreement, including the compensation
to be paid thereunder, being approved
by the shareholders of the applicable
Fund.
5. At all times, at least a majority of
the Board will be Independent
Directors, and the nomination of new or
additional Independent Directors will
be placed within the discretion of the
then-existing Independent Directors.
6. When a Subadviser change is
proposed for a Fund with an Affiliated
Subadviser, the Board, including a
majority of the Independent Directors,
will make a separate finding, reflected
in the Board minutes, that the change is
in the best interests of the Fund and its
shareholders and does not involve a
conflict of interest from which the
Adviser or the Affiliated Subadviser
derives an inappropriate advantage.
7. The Adviser will provide general
management services to each Fund,
including overall supervisory
responsibility for the general
management and investment of the
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Fund’s assets, and, subject to review
and approval of the Board, will: (a) Set
each Fund’s overall investment
strategies, (b) evaluate, select and
recommend Subadvisers to manage all
or a part of a Fund’s assets, (c) allocate
and, when appropriate, reallocate a
Fund’s assets among multiple
Subadvisers; (d) monitor and evaluate
the performance of the Subadvisers, and
(e) implement procedures reasonably
designed to ensure that the Subadvisers
comply with each relevant Fund’s
investment objective, policies and
restrictions.
8. No director or officer of the Funds
or the Adviser, will own directly or
indirectly (other than through a pooled
investment vehicle that is not controlled
by such person), any interest in a
Subadviser, except for: (a) ownership of
interests in the Adviser or any entity
that controls, is controlled by, or is
under common control with the
Adviser, or (b) ownership of less than
1% of the outstanding securities of any
class of equity or debt of a publicly
traded company that is either a
Subadviser or an entity that controls, is
controlled by, or is under common
control with a Subadviser.
9. The Adviser will provide the
Board, no less frequently than quarterly,
with information about the Adviser’s
profitability on a per-Fund basis. Such
information will reflect the impact on
the profitability of the hiring or
termination of any Subadviser during
the applicable quarter.
10. Each Fund will disclose in its
registration statement the Aggregate Fee
Disclosure.
11. The requested order will expire on
the effective date of rule 15a–5 under
the Act, if adopted.
12. Whenever a Subadviser is hired or
terminated, the Adviser will provide the
Board with information showing the
expected impact on the Adviser’s
profitability.
13. Independent legal counsel, as
defined in rule 0–1(a)(6) under the 1940
Act, will be engaged to represent the
Independent Directors. The selection of
such counsel will be within the
discretion of the then existing
Independent Directors.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–8506 Filed 5–3–07; 8:45 am]
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55676; File No. SR–CBOE–
2007–40]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend the Duration of
CBOE Rule 6.45A(b) Pertaining to
Orders Represented in Open Outcry
April 27, 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 April 25,
2007, the Chicago Board Options
Exchange, Incorporated (‘‘CBOE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been
substantially prepared by the CBOE.
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
it effective upon filing with the
Commission.5 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 CBOE proposes to extend the
duration of CBOE Rule 6.45A(b) (the
‘‘Rule’’), relating to the allocation of
orders represented in open outcry in
equity option classes designated by the
Exchange to be traded on the CBOE
Hybrid Trading System (‘‘Hybrid’’)
through July 31, 2007. No other changes
are being made to the Rule. The text of
the proposed rule change is available at
CBOE, the Commission’s Public
Reference Room, and (https://
www.cboe.org/Legal).
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
CBOE included statements concerning
the purpose of, and basis for, the
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
5 The Exchange has asked the Commission to
waive the 30-day operative delay required by Rule
19b–4(f)(6)(iii), 17 CFR 240.19b–4(f)(6)(iii). See
discussion infra Section III.
2 17
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Federal Register / Vol. 72, No. 86 / Friday, May 4, 2007 / Notices
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 parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
In March 2005, the Commission
approved revisions to CBOE Rule 6.45A
related to the introduction of Remote
Market-Makers.6 Among other things,
the Rule, pertaining to the allocation of
orders represented in open outcry in
equity options classes traded on Hybrid,
was amended to clarify that only incrowd market participants would be
eligible to participate in open outcry
trade allocations. In addition, the Rule
was amended to limit the duration of
the Rule until September 14, 2005. The
duration of the Rule was thereafter
extended through April 30, 2007.7 As
the duration period expires on April 30,
2007, the Exchange proposes to extend
the effectiveness of the Rule through
July 31, 2007.8
cprice-sewell on DSK89S0YB1PROD with NOTICES
6 See
Securities Exchange Act Release No. 51366
(March 14, 2005), 70 FR 13217 (March 18, 2005)
(SR–CBOE–2004–75).
7 See Securities Exchange Act Release Nos. 52423
(September 14, 2005), 70 FR 55194 (September 20,
2005) (SR–CBOE–2005–76) (extending the duration
of the Rule through December 14, 2005); 52957
(December 15, 2005), 70 FR 76085 (December 22,
2005) (SR–CBOE–2005–102) (extending the Rule
through March 14, 2006); 53524 (March 21, 2006),
71 FR 15235 (March 27, 2006) (SR–CBOE–2006–22)
(extending the duration of the Rule through July 14,
2006); 54164 (July 17, 2006), 71 FR 42143 (July 25,
2006) (SR–CBOE–2006–60) (extending the duration
of the Rule through October 31, 2006); 54680
(November 1, 2006), 71 FR 65554 (November 8,
2006) (SR–CBOE–2006–86) (extending the duration
of the Rule through January 31, 2007); and 55219
(February 1, 2007), 72 FR 6305 (February 9, 2007)
(SR–CBOE–2007–10) (extending the duration of the
Rule through April 30, 2007).
8 In order to effect proprietary transactions on the
floor of the Exchange, in addition to complying
with the requirements of the Rule, members are also
required to comply with the requirements of
Section 11(a)(1) of the Act, 15 U.S.C. 78k(a)(1), or
qualify for an exemption. Section 11(a)(1) restricts
securities transactions of a member of any national
securities exchange effected on that exchange for (i)
the member’s own account, (ii) the account of a
person associated with the member, or (iii) an
account over which the member or a person
associated with the member exercises discretion,
unless a specific exemption is available. The
Exchange has issued regulatory circulars to
members informing them of the applicability of
these Section 11(a)(1) requirements each time the
duration of the Rule was extended. See CBOE
Regulatory Circulars RG05–103 (November 2, 2005),
RG06–001 (January 3, 2006), RG06–34 (April 7,
2006), RG06–79 (July 31, 2006), RG06–115
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2. Statutory Basis
Extension of the duration of the Rule
will allow the Exchange to continue to
operate under the existing allocation
parameters for orders represented in
open outcry in Hybrid on an
uninterrupted 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.9
Specifically, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 10 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
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 proposed 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 thirty 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, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 11 and Rule 19b–
4(f)(6) 12 thereunder.13
(November 8, 2006) and RG07–21 (February 8,
2007). The Exchange represents that it expects to
issue a similar regulatory circular to members
reminding them of the applicability of the Section
11(a)(1) requirements with respect to the proposed
rule change.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
11 15 U.S.C. 78s(b)(3)(A).
12 17 CFR 240.19b–4(f)(6).
13 Pursuant to Rule 19b–4(f)(6)(iii), the Exchange
has given 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
on which the Exchange filed the proposed rule
change. See 17 CFR 240.19b–4(f)(6)(iii).
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25349
A proposed rule change filed under
Commission Rule 19b–4(f)(6) 14
normally does not become operative
prior to thirty days after the date of
filing. The CBOE requests that the
Commission waive the 30-day operative
delay, as specified in Rule 19b–
4(f)(6)(iii), and designate the proposed
rule change to become operative
immediately to allow the Exchange to
continue to operate under the existing
allocation parameters for orders
represented in open outcry in Hybrid on
an uninterrupted basis. The
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest because such waiver will
allow the CBOE to continue to operate
under the Rule without interruption.
For these reasons, the Commission
designates the proposed rule change as
operative upon filing.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 the 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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–CBOE–2007–40 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CBOE–2007–40. 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
14 17
CFR 240.19b–4(f)(6).
the purposes only of waiving the operative
date of this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
15 For
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Federal Register / Vol. 72, No. 86 / Friday, May 4, 2007 / Notices
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://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–2007–40 and should
be submitted on or before May 25, 2007.
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been
substantially prepared by the Exchange.
The Exchange filed the proposed rule
change pursuant to Section 19(b)(3)(A)
of the Act 3 and Rule 19b–4(f)(1)
thereunder, which renders it effective
upon filing with the Commission.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
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 option class NYSE Group,
Inc. (NYX) from its current limit of 40
to 45.7
Increasing the CQL in NYX options
will enable the Exchange to enhance the
liquidity offered, thereby offering
deeper and more liquid markets.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
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.8
Specifically, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 9 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.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.16
Florence E. Harmon,
Deputy Secretary.
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 Exchange
has prepared summaries, set forth in
Sections A, B, and C below, of the most
significant aspects of such statements.
[FR Doc. E7–8505 Filed 5–3–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55418; File No. SR–CBOE–
2007–22]
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 the Option Class
NYSE Group, Inc. (NYX); Republication
March 7, 2007.
cprice-sewell on DSK89S0YB1PROD with NOTICES
Editorial Note: FR Doc. E7–4589 originally
published at pages 11924–11925 in the issue
of Wednesday, March 14, 2007. The original
publication contained footnote omissions. As
a result, the corrected document is being
republished in its entirety.
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
23, 2007, the Chicago Board Options
Exchange, Incorporated (‘‘CBOE’’ or
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
CBOE proposes to increase the class
quoting limit in the option class NYSE
Group, Inc. (NYX). The text of the
proposed rule change is available at the
CBOE, the Commission’s Public
Reference Room, and https://
www.cboe.com.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
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.
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
16 17
3 15
1 15
4 17
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14:51 Apr 20, 2010
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(1).
5 See Rule 8.3A.01.
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2. Statutory Basis
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 Exchange 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 written comments on the
proposal.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change constitutes a stated policy,
practice, or interpretation with respect
to the meaning, administration, or
enforcement of an existing rule, it has
become effective pursuant to Section
19(b)(3)(A) 10 and Rule 19b–4(f)(1)
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 The Exchange is requesting this increase in the
CQL due to increased trading volume in NYX.
Telephone conversation between Angela Muehr,
Attorney, Division of Market Regulation,
Commission, and Patrick Sexton, Associate General
Counsel, CBOE, on March 7, 2007.
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
10 15 U.S.C. 78s(b)(3)(A).
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]]>Agencies
[Federal Register Volume 72, Number 86 (Friday, May 4, 2007)]
[Notices]
[Pages 25348-25350]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-8505]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55676; File No. SR-CBOE-2007-40]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Extend the Duration of CBOE Rule 6.45A(b) Pertaining to
Orders Represented in Open Outcry
April 27, 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 April 25, 2007, the Chicago Board Options Exchange,
Incorporated (``CBOE'' or ``Exchange'') filed with the Securities and
Exchange Commission (the ``Commission'') the proposed rule change as
described in Items I and II below, which Items have been substantially
prepared by the CBOE. 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 it 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\ The Exchange has asked the Commission to waive the 30-day
operative delay required by Rule 19b-4(f)(6)(iii), 17 CFR 240.19b-
4(f)(6)(iii). See discussion infra Section III.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The CBOE proposes to extend the duration of CBOE Rule 6.45A(b) (the
``Rule''), relating to the allocation of orders represented in open
outcry in equity option classes designated by the Exchange to be traded
on the CBOE Hybrid Trading System (``Hybrid'') through July 31, 2007.
No other changes are being made to the Rule. The text of the proposed
rule change is available at CBOE, the Commission's Public Reference
Room, and (https://www.cboe.org/Legal).
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 CBOE included statements
concerning the purpose of, and basis for, the
[[Page 25349]]
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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
In March 2005, the Commission approved revisions to CBOE Rule 6.45A
related to the introduction of Remote Market-Makers.\6\ Among other
things, the Rule, pertaining to the allocation of orders represented in
open outcry in equity options classes traded on Hybrid, was amended to
clarify that only in-crowd market participants would be eligible to
participate in open outcry trade allocations. In addition, the Rule was
amended to limit the duration of the Rule until September 14, 2005. The
duration of the Rule was thereafter extended through April 30, 2007.\7\
As the duration period expires on April 30, 2007, the Exchange proposes
to extend the effectiveness of the Rule through July 31, 2007.\8\
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 51366 (March 14,
2005), 70 FR 13217 (March 18, 2005) (SR-CBOE-2004-75).
\7\ See Securities Exchange Act Release Nos. 52423 (September
14, 2005), 70 FR 55194 (September 20, 2005) (SR-CBOE-2005-76)
(extending the duration of the Rule through December 14, 2005);
52957 (December 15, 2005), 70 FR 76085 (December 22, 2005) (SR-CBOE-
2005-102) (extending the Rule through March 14, 2006); 53524 (March
21, 2006), 71 FR 15235 (March 27, 2006) (SR-CBOE-2006-22) (extending
the duration of the Rule through July 14, 2006); 54164 (July 17,
2006), 71 FR 42143 (July 25, 2006) (SR-CBOE-2006-60) (extending the
duration of the Rule through October 31, 2006); 54680 (November 1,
2006), 71 FR 65554 (November 8, 2006) (SR-CBOE-2006-86) (extending
the duration of the Rule through January 31, 2007); and 55219
(February 1, 2007), 72 FR 6305 (February 9, 2007) (SR-CBOE-2007-10)
(extending the duration of the Rule through April 30, 2007).
\8\ In order to effect proprietary transactions on the floor of
the Exchange, in addition to complying with the requirements of the
Rule, members are also required to comply with the requirements of
Section 11(a)(1) of the Act, 15 U.S.C. 78k(a)(1), or qualify for an
exemption. Section 11(a)(1) restricts securities transactions of a
member of any national securities exchange effected on that exchange
for (i) the member's own account, (ii) the account of a person
associated with the member, or (iii) an account over which the
member or a person associated with the member exercises discretion,
unless a specific exemption is available. The Exchange has issued
regulatory circulars to members informing them of the applicability
of these Section 11(a)(1) requirements each time the duration of the
Rule was extended. See CBOE Regulatory Circulars RG05-103 (November
2, 2005), RG06-001 (January 3, 2006), RG06-34 (April 7, 2006), RG06-
79 (July 31, 2006), RG06-115 (November 8, 2006) and RG07-21
(February 8, 2007). The Exchange represents that it expects to issue
a similar regulatory circular to members reminding them of the
applicability of the Section 11(a)(1) requirements with respect to
the proposed rule change.
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2. Statutory Basis
Extension of the duration of the Rule will allow the Exchange to
continue to operate under the existing allocation parameters for orders
represented in open outcry in Hybrid on an uninterrupted 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.\9\ Specifically, the Exchange believes the
proposed rule change is consistent with the Section 6(b)(5) \10\
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.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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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 proposed 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 thirty 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, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6) \12\ thereunder.\13\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6).
\13\ Pursuant to Rule 19b-4(f)(6)(iii), the Exchange has given
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 on which
the Exchange filed the proposed rule change. See 17 CFR 240.19b-
4(f)(6)(iii).
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A proposed rule change filed under Commission Rule 19b-4(f)(6) \14\
normally does not become operative prior to thirty days after the date
of filing. The CBOE requests that the Commission waive the 30-day
operative delay, as specified in Rule 19b-4(f)(6)(iii), and designate
the proposed rule change to become operative immediately to allow the
Exchange to continue to operate under the existing allocation
parameters for orders represented in open outcry in Hybrid on an
uninterrupted basis. The Commission believes that waiving the 30-day
operative delay is consistent with the protection of investors and the
public interest because such waiver will allow the CBOE to continue to
operate under the Rule without interruption. For these reasons, the
Commission designates the proposed rule change as operative upon
filing.\15\
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ For the purposes only of waiving the operative date of this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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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 the 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 (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-CBOE-2007-40 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-CBOE-2007-40. 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
[[Page 25350]]
only one method. The Commission will post all comments on the
Commission's Internet Web site (https://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-2007-40 and
should be submitted on or before May 25, 2007.
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\16\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\16\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-8505 Filed 5-3-07; 8:45 am]
BILLING CODE 8010-01-P
