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, 44194-44196 [E7-15310]
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jlentini on PROD1PC65 with NOTICES
44194
Federal Register / Vol. 72, No. 151 / Tuesday, August 7, 2007 / Notices
the securities; the prices quoted; the
times and dates the quotations were
received; and whether such securities
were First Tier Securities or Second Tier
Securities.
(b) Each Money Market Portfolio shall
maintain a ledger or other record
showing, on a daily basis, the
percentage of the Money Market
Portfolio’s Total Assets represented by
Second Tier Securities acquired from
the Dealer.
(c) Each Money Market Portfolio will
maintain records sufficient to verify
compliance with the volume limitations
contained in condition 3, above. The
Dealer will provide the Money Market
Portfolios with all records and
information necessary to implement this
requirement.
(d) Each Money Market Portfolio will
maintain records sufficient to verify
compliance with the repurchase
agreement requirements contained in
condition 2, above.
The records required by this
condition 8 will be maintained and
preserved in the same manner as
records required under rule 31a–1(b)(1).
9. Guidelines—Each of the
compliance departments of the Advisers
and of the Dealers (the ‘‘Compliance
Departments’’) will prepare and, as
necessary, update guidelines for
personnel of the Advisers and the
Dealer, as the case may be, to make
certain that transactions conducted
pursuant to the exemption comply with
the conditions of the exemption, and
that the parties generally maintain
arm’s-length relationships. In training
personnel of the Dealer, particular
emphasis will be given to the fact that
the Money Market Portfolios are to
receive rates as favorable as other
institutional purchasers buying the
same quantities. The Compliance
Departments will periodically monitor
the activities of the Advisers and Dealer
to make certain that the conditions set
forth in the exemption are adhered to.
10. Audit Committee Review—The
audit committees of the respective
Boards of each of the Money Market
Portfolios (each an ‘‘Audit Committee’’),
comprised of trustees or directors who
are not ‘‘interested persons’’ as defined
in section 2(a)(19) of the Act
(‘‘Independent Trustees’’), will prepare,
periodically review and update the
guidelines for the Advisers and the
Dealer to ensure that transactions
conducted pursuant to the exemption
comply with the conditions set forth
therein and that the above procedures
are followed in all respects. The
respective Audit Committees will
periodically monitor the activities of the
Money Market Portfolios, the Advisers,
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and the Dealer in this regard to ensure
that these matters are being
accomplished.
11. Scope of Exemption—Applicants
expressly acknowledge that any order
issued on the application would grant
relief from section 17(a) of the Act only,
and would not grant relief from any
other section of, or rule under, the Act
including, without limitation, rule 2a–7.
Any order issued on the application will
not extend to any investment company
advised or sub-advised by LBI.
12. Board Review—The respective
Boards, including a majority of the
Independent Trustees, have approved
the Money Market Portfolio’s
participation in transactions conducted
pursuant to the exemption and have
determined that such participation by
the Money Market Portfolios is in the
best interests of the Money Market
Portfolios and their investors. The
minutes of the meetings of the Boards at
which this approval was given reflect in
detail the reasons for the Boards’
determinations. The Boards will review
no less frequently than annually the
Money Market Portfolios’ participation
in transactions conducted pursuant to
the exemption during the prior year and
determine whether the Money Market
Portfolios’ participation in such
transactions continues to be in the best
interests of the Money Market Portfolios
and their investors. Such review will
include (but not be limited to) (a) A
comparison of the volume of
transactions in each type of security
conducted pursuant to the exemption to
the market presence of the Dealer in the
market for that type of security, and (b)
a determination that the Money Market
Portfolios are maintaining appropriate
trading relationships with other sources
for each type of security to ensure that
there are appropriate sources for the
quotations required by condition 4
above. The minutes of the meetings of
the Boards at which such
determinations are made will reflect in
detail the reasons for the Boards’
determinations.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Nancy M. Morris,
Secretary.
[FR Doc. E7–15309 Filed 8–6–07; 8:45 am]
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56177; File No. SR–CBOE–
2007–89]
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
August 1, 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 July 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 December 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
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 requested that the
Commission waive the 5 day pre-filing notice and
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. 151 / Tuesday, August 7, 2007 / Notices
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 parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
jlentini on PROD1PC65 with NOTICES
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 July 31, 2007.7 As the
duration period expires on July 31,
2007, the Exchange proposes to extend
the effectiveness of the Rule through
December 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); 55219
(February 1, 2007), 72 FR 6305 (February 9, 2007)
(SR–CBOE–2007–10) (extending the duration of the
Rule through April 30, 2007) and 55676 (April 27,
2007), 72 FR 25348 (May 4, 2007) (SR–CBOE–2007–
40) (extending the duration of the Rule through July
31, 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
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15:56 Aug 06, 2007
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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
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), RG07–21 (February 8, 2007)
and RG07–53 (May 17, 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 The Exchange has requested that the
Commission waive the requirement that the
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44195
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 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–2007–89 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.
Exchange provide 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 pursuant to Rule 19b–4(f)(6)(iii). The
Commission hereby grants this request. See 17 CFR
240.19b–4(f)(6)(iii).
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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Federal Register / Vol. 72, No. 151 / Tuesday, August 7, 2007 / Notices
All submissions should refer to File
Number SR–CBOE–2007–89. 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 (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, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of such filing also will be
available for inspection and copying at
the principal office of the Exchange. 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–2007–89 and should
be submitted on or before August 28,
2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.16
Nancy M. Morris,
Secretary.
[FR Doc. E7–15310 Filed 8–6–07; 8:45 am]
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BILLING CODE 8010–01–P
16 17
CFR 200.30–3(a)(12).
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SECURITIES AND EXCHANGE
COMMISSION
approves the proposed rule change, as
amended.
[Release No. 34–56172; File No. SR–
NASDAQ–2006–065]
II. Description of the Proposal
The National Association of Securities
Dealers, Inc. (‘‘NASD’’) created the
PORTAL Market in 1990,8
simultaneously with the SEC’s adoption
of Rule 144A (‘‘Rule 144A’’) under the
Securities Act of 1933 (‘‘Securities
Act’’),9 to be a new trading system for
the purpose of quoting, trading, and
reporting trades in securities eligible for
resale by Qualified Institutional Buyers
(‘‘QIBs’’) under Rule 144A.10
The PORTAL Market did not develop
as anticipated. The Exchange believes
this is, in part, because PORTAL
securities could only be traded in the
PORTAL Market and the original
PORTAL rules imposed trade reporting
for all transactions in PORTAL
securities at a time when there were no
trade reporting requirements for
privately-placed securities.11 In
addition, Nasdaq believes PORTAL did
not develop because it required use of
cumbersome technology for access to
the PORTAL Market computer system
for reporting purposes, which was a
stand-alone computer system.
After nearly a decade, NASD filed a
proposed rule change to delete many
features of the PORTAL Market that had
become obsolete including rules
governing the registration of PORTAL
Dealers, PORTAL Brokers, and PORTAL
Qualified Investors and rules that were
intended to regulate the quotation and
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Order
Approving Proposed Rule Change as
Modified by Amendments No. 1, 3, and
4 Thereto To Reestablish a Quotation
and Trading System, The PORTAL
Market, for Securities That Are
Designated by Nasdaq as PORTAL
Securities
July 31, 2007.
I. Introduction
On December 22, 2006, The NASDAQ
Stock Market LLC (‘‘Nasdaq’’ or
‘‘Exchange’’), filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
reestablish a quotation and trading
system, The PORTAL Market
(‘‘PORTAL’’ or the ‘‘PORTAL Market’’),
for securities that are designated by
Nasdaq as PORTAL securities. The
system would allow PORTAL
Participants 3 to trade with one another
in a closed system. On March 6, 2007,
Nasdaq filed Amendment No. 1 to the
proposed rule change.4 On April 3,
2007, Nasdaq filed Amendment No. 3 to
the proposed rule change. The proposed
rule change was published for comment
in the Federal Register on May 1, 2007.5
The Commission received seven
comment letters on the proposal from
six commenters.6 On July 16, 2007,
Nasdaq filed Amendment No. 4 to the
proposed rule change.7 This order
1 15
U.S.C. 78s(b)(l).
CFR 240.19b–4.
3 Defined infra.
4 Amendment No. 2 was filed and withdrawn on
April 3, 2007.
5 See Securities Exchange Act Release No. 55669
(April 25, 2007), 72 FR 23874 (May 1, 2007) (the
‘‘Notice’’).
6 See letters to Nancy M. Morris, Secretary,
Commission, from NYPPEX, dated May 18, 2007;
Lezlee Westine, President and CEO, TechNet, dated
May 22, 2007; William J. Ginivan, General Counsel,
Friedman, Billings, Ramsey & Co., Inc. (‘‘FBR’’),
dated May 22, 2007 and July 18, 2007; Deborah L.
Wince-Smith, President, Council on
Competitiveness, dated May 25, 2007; and Mary
Kuan, Managing Director and Assistant General
Counsel, Securities Industry and Financial Markets
Association (‘‘SIFMA’’), dated May 30, 2007. In
addition, an individual affiliated with Morgan
Stanley, John McGuire, submitted a general inquiry
with respect to the filing via e-mail on May 9, 2007.
7 In response to a comment made by SIFMA, in
Amendment No. 4, Nasdaq amended proposed Rule
6513 (Compliance with Rules and Registration
Requirements) so that it applies only to PORTAL
Dealers and PORTAL Brokers. Nasdaq stated that
2 17
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Fmt 4703
Sfmt 4703
the inclusion of PORTAL Qualified Investors
(defined infra) in this rule was an error. In addition,
Nasdaq stated that PORTAL would not be
operational for debt securities at this time. Once the
necessary changes are in place, Nasdaq will file a
proposed rule change stating when PORTAL will be
available for debt trading. Finally, Nasdaq removed
obsolete references in the PORTAL Rules to CINS.
This is a technical amendment and is not subject
to notice and comment.
8 See Securities Exchange Act Release No. 27956
(April 27, 1990), 55 FR 18781 (May 4, 1990) (SR–
NASD–88–23). The PORTAL Rules were
subsequently amended. See Securities Exchange
Act Release Nos. 28678 (December 6, 1990), 55 FR
51194 (December 12, 1990) (SR–NASD–90–50);
33326 (December 13, 1993), 58 FR 66388 (December
20, 1993) (SR–NASD–91–5); 34562 (August 19,
1994), 59 FR 44210 (August 26, 1994) (SR–NASD–
94–39); 35083 (December 12, 1994), 59 FR 65104
(December 16, 1994) (SR–NASD–94–65); 40424
(September 10, 1998), 63 FR 49623 (September 16,
1998) (SR–NASD–98–68); 43873 (January 23, 2001),
66 FR 8131 (January 29, 2001) (SR–NASD–99–65);
44042 (March 6, 2001), 66 FR 14969 (March 14,
2001) (SR–NASD–99–66).
9 See Securities Act Release No. 6862 (April 23,
1990), 55 FR 17933 (April 30, 1990).
10 17 CFR 230.144A.
11 Currently, NASD Rule 6732 requires that
transactions in PORTAL equity securities be
reported to the OTC Reporting Facility and
PORTAL debt securities be reported to the Trade
Reporting and Compliance Engine Service
(‘‘TRACE’’).
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]]>Agencies
[Federal Register Volume 72, Number 151 (Tuesday, August 7, 2007)]
[Notices]
[Pages 44194-44196]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-15310]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56177; File No. SR-CBOE-2007-89]
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
August 1, 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 July 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 requested that the Commission waive the 5
day pre-filing notice and 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 December 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
[[Page 44195]]
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 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 July 31, 2007.\7\
As the duration period expires on July 31, 2007, the Exchange proposes
to extend the effectiveness of the Rule through December 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); 55219 (February
1, 2007), 72 FR 6305 (February 9, 2007) (SR-CBOE-2007-10) (extending
the duration of the Rule through April 30, 2007) and 55676 (April
27, 2007), 72 FR 25348 (May 4, 2007) (SR-CBOE-2007-40) (extending
the duration of the Rule through July 31, 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), RG07-21 (February
8, 2007) and RG07-53 (May 17, 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\ The Exchange has requested that the Commission waive the
requirement that the Exchange provide 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 pursuant to Rule 19b-4(f)(6)(iii). The
Commission hereby grants this request. 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 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-2007-89 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.
[[Page 44196]]
All submissions should refer to File Number SR-CBOE-2007-89. 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 (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, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Exchange. 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-2007-89 and should be
submitted on or before August 28, 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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Nancy M. Morris,
Secretary.
[FR Doc. E7-15310 Filed 8-6-07; 8:45 am]
BILLING CODE 8010-01-P
