Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, Regarding Complex Orders, 61694-61696 [E7-21383]

Download as PDF 61694 Federal Register / Vol. 72, No. 210 / Wednesday, October 31, 2007 / Notices These documents may also be viewed electronically on the public computers located at the NRC’s PDR, O 1 F21, One White Flint North, 11555 Rockville Pike, Rockville, MD 20852. The PDR reproduction contractor will copy documents for a fee. Dated at Rockville, Maryland, this 24th day of October, 2007. For the Nuclear Regulatory Commission. Stephen J. Cohen, Project Manager, Uranium Recovery Licensing Branch, Decommissioning and Uranium Recovery Licensing Directorate, Division of Waste Management and Environmental Protection, Office of Federal and State Materials and Environmental Management Programs. [FR Doc. E7–21429 Filed 10–30–07; 8:45 am] BILLING CODE 7590–01–P NUCLEAR REGULATORY COMMISSION rwilkins on PROD1PC63 with NOTICES Advisory Committee on Nuclear Waste And Materials; Meeting on Planning and Procedures; Notice of Meeting The Advisory Committee on Nuclear Waste and Materials (ACNW&M) will hold a Planning and Procedures meeting on November 13, 2007, Room T–2B1, 11545 Rockville Pike, Rockville, Maryland. The entire meeting will be open to public attendance, with the exception of a portion that may be closed pursuant to 5 U.S.C. 552b (c) (2) and (6) to discuss organizational and personnel matters that relate solely to internal personnel rules and practices of ACNW&M, and information the release of which would constitute a clearly unwarranted invasion of personal privacy. The agenda for the subject meeting shall be as follows: Tuesday, November 13, 2007—8:30 a.m. until 9:30 a.m. The Committee will discuss proposed ACNW&M activities and related matters. The purpose of this meeting is to gather information, analyze relevant issues and facts, and formulate proposed positions and actions, as appropriate, for deliberation by the full Committee. Members of the public desiring to provide oral statements and/or written comments should notify the Designated Federal Officer, Dr. Antonio F. Dias (Telephone: 301/415–6805) between 8:15 a.m. and 5 p.m. (ET) 5 days prior to the meeting, if possible, so that appropriate arrangements can be made. Electronic recordings will be permitted only during those portions of the meeting that are open to the public. Detailed procedures for the conduct of and participation in ACNW&M meetings VerDate Aug<31>2005 17:45 Oct 30, 2007 Jkt 214001 were published in the Federal Register on September 26, 2007 (72 FR 54693). Further information regarding this meeting can be obtained by contacting the Designated Federal Officer between 8:15 a.m. and 5 p.m. (ET). Persons planning to attend this meeting are urged to contact the above named individual at least 2 working days prior to the meeting to be advised of any potential changes in the agenda. Dated: October 24, 2007. Antonio F. Dias, Chief, Nuclear Waste & Materials Branch. [FR Doc. E7–21430 Filed 10–30–07; 8:45 am] Dated: October 25, 2007. Cayetano Santos, Chief, Reactor Safety Branch, ACRS. [FR Doc. E7–21432 Filed 10–30–07; 8:45 am] BILLING CODE 7590–01–P NUCLEAR REGULATORY COMMISSION BILLING CODE 7590–01–P Advisory Committee on Reactor Safeguards (ACRS); Subcommittee Meeting on Thermal-Hydraulic Phenomena; Notice of Meeting The ACRS Subcommittee on ThermalHydraulic Phenomena will hold a meeting on November 14, 2007, at 11545 Rockville Pike, Rockville, Maryland, Room T–2B1. The entire meeting will be open to public attendance, with the exception of portions that may be closed to discuss AREVA proprietary information pursuant to 5 U.S.C. 552b(c)(4). The agenda for the subject meeting shall be as follows: Wednesday, November 14, 2007—8:30 a.m. Until 12 Noon The Subcommittee will review and comment on the proposed AREVA instability detect and suppress solution codes and methodology specified in the topical reports: (1) ANP–10262(P), Revision 0, ‘‘Enhanced Option III Long Term Stability Solution;’’ and (2) BAW– 10255(P), Revision 2, ‘‘Cycle-specific DIVOM Methodology Using the RAMONA5–FA Code.’’ The Subcommittee will hear presentations by and hold discussions with representatives of the NRC staff, AREVA, and other interested persons regarding this matter. The Subcommittee will gather information, analyze relevant issues and facts, and formulate proposed positions and actions, as appropriate, for deliberation by the full Committee. Members of the public desiring to provide oral statements and/or written comments should notify the Designated Federal Officer, Ms. Zena Abdullahi (Telephone: 301–415–8716) 5 days prior to the meeting, if possible, so that appropriate arrangements can be made. Electronic recordings will be permitted PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 only during those portions of the meeting that are open to the public. Detailed procedures for the conduct of and participation in ACRS meetings were published in the Federal Register on September 26, 2007 (72 FR 54695). Further information regarding this meeting can be obtained by contacting the Designated Federal Officer between 8:45 a.m. and 5:30 p.m. (ET). Persons planning to attend this meeting are urged to contact the above named individual at least 2 working days prior to the meeting to be advised of any potential changes to the agenda. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56701; File No. SR–CBOE– 2007–68] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1, Regarding Complex Orders October 25, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on June 20, 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 prepared substantially by the CBOE. On October 19, 2007, the CBOE filed Amendment No. 1 to the proposed rule change.3 The Commission is publishing this notice to solicit comments on the proposed rule change, as modified by Amendment No. 1, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The CBOE proposes to amend its rules regarding the handling of certain complex orders. The text of the proposed rule change is available on the Exchange’s Web site at (http:// 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Amendment No. 1 replaces the original filing in its entirety. 2 17 E:\FR\FM\31OCN1.SGM 31OCN1 Federal Register / Vol. 72, No. 210 / Wednesday, October 31, 2007 / Notices www.cboe.org/Legal), at the CBOE’s Office of the Secretary, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change rwilkins on PROD1PC63 with NOTICES 1. Purpose CBOE Rule 6.53C, ‘‘Complex Orders on the Hybrid System,’’ governs the electronic handling and execution of complex orders by the Exchange’s Hybrid System. The purpose of this filing is to allow for the electronic handling and execution of stock-option orders on the Exchange. These are a type of complex order that consist of an option component and a stock component. Stock-option orders are popular with investors (e.g., buy-writes) and are frequently handled on CBOE. To date, these orders are handled manually and the option component is traded in open outcry by a broker. With the establishment of the CBOE Stock Exchange (‘‘CBSX’’), an electronic stock trading facility of CBOE, the Exchange is now positioned to handle and trade stock-option orders electronically, with the stock component execution taking place on CBSX. The Exchange proposes to handle these orders in a manner that is substantially similar to other complex orders handled pursuant to CBOE Rule 6.53C. Electronic stock-option orders will be accepted by the Hybrid System and auctioned in the Complex Order Auction (‘‘COA’’) pursuant to CBOE Rule 6.53C(d) when the requirements for an auction are met. An unexecuted stock-option order can also be maintained by the system (either in the Complex Order Book (‘‘COB’’) or on the PAR workstation), either of which will monitor the marketability of the order, taking into account the CBSX market for the execution of the stock component of the order. VerDate Aug<31>2005 17:45 Oct 30, 2007 Jkt 214001 There are four differences between the handling of stock-option orders and other complex order types handled pursuant to CBOE Rule 6.53C. First, as previously mentioned, the stock portion of the stock-option order will be executed on CBSX. All such executions will be consistent with CBSX trading rules, including priority and matching rules. The execution of the stock-option order cannot take place until the desired price of the stock component is achievable on CBSX. The option leg of the stock-option order will not trade ahead of any resting public customer orders on the Hybrid book. This is consistent with existing CBOE Rule 6.45A(b)(ii), which provides that stockoption orders do not have priority over bids/offers in the public customer limit order book. The option leg may be executed in one-cent increments regardless of the minimum increment applicable to the series. For example: a customer enters a buywrite order to buy 100 shares of XYZ (trading around $40) and sell a 45 call with a net price of $39.00. There is a public customer order in the Hybrid book to sell the 45 call for $1. When executing the buy-write against auction responses, the system will not allow the option leg of the transaction to trade at $1 or higher (thereby preserving the resting limit order’s priority at that price). An execution could occur where the option leg prints at $0.99 and the stock trade prints at $39.99 (in accordance with CBSX priority rules). This meets the buy-write’s limit price (involving a total cost of $3900) and does not violate priority on CBOE or CBSX. Second, the execution of a stockoption order submitted to the COB is slightly different than the priority outlined in CBOE Rule 6.53C(c)(ii). More specifically, a stock-option order submitted to the CBOE will trade in the following sequence: (1) Against other stock-option orders in the COB using public customer priority and then time priority (thus, if there are multiple public customer and broker-dealer stock-option orders resting in COB, the public customer orders will trade first with time priority among them, and then the broker-dealer orders will trade with time priority among them); (2) against individual orders or quotes on the Exchange (i.e., the CBSX book and the options Hybrid book), provided the stock-option order can be executed in full (or in a permissible ratio); and (3) against orders or quotes submitted by Market Participants, as set forth in CBOE Rule 6.53C(c)(ii)(3). Because a portion of a stock-option order is executed on a different platform (CBSX), PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 61695 it is more practical to execute resting stock-option orders against other stockoption orders received by the system first before scanning for executions against the legs on the CBSX book and the options Hybrid book. The third difference involves the manner in which stock-option orders are executed through the COA. Individual orders and quotes for the various legs of the order will have last priority. Again, this is because it is more practical to execute resting stock-option orders against other stock-option orders received by the system first before scanning for executions against the legs on the CBSX book and the options Hybrid book. For example: the market for XYZ stock on CBSX is $39.94–39.99. The 45 call market on CBOE is $0.95–1.00. A stock-option order is entered to buy 100 shares and sell the 45 call with a net price of $39.00. The stock-option order is auctioned through the COA, but no responses are received (if responses had been received, priority would have been afforded to public customer responses and any resting public customer stock-option orders that were marketable against the auctioned order using time priority). After the system has determined that there are no responses or resting stock-option orders that can trade against the auctioned stock-option order, it will look to the individual leg markets. In this case, the stock-option order will be filled by the system by executing the stock at $39.99 against the CBSX book and the option at $1 against the CBOE book. With respect to the last difference, the N-second group timer shall not be in effect for stock-option orders. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,4 in general, and furthers the objectives of Section 6(b)(5) of the Act,5 in particular, in that it is designed to facilitate transactions in securities, to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts and, in general, to protect investors and the public interest. In particular, the Exchange believes that the addition of stock-option orders to the list of complex orders eligible for electronic handling under CBOE Rule 6.53C is a significant enhancement for investors seeking automated handling of stockoption orders. 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 4 15 5 15 E:\FR\FM\31OCN1.SGM U.S.C. 78f(b). U.S.C. 78f(b)(5). 31OCN1 61696 Federal Register / Vol. 72, No. 210 / Wednesday, October 31, 2007 / Notices 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 Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the Exchange consents, the Commission will: (A) By order approve such proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. 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: rwilkins on PROD1PC63 with NOTICES 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–2007–68 on the subject line. 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 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–2007–68 and should be submitted on or before November 21, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.6 Nancy M. Morris, Secretary. [FR Doc. E7–21383 Filed 10–30–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56703; File No. SR–CHX– 2007–22] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change to Amend Rules Relating to the Execution of Odd Lot Market Orders October 25, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Paper Comments notice is hereby given that on October • Send paper comments in triplicate 2, 2007, the Chicago Stock Exchange, to Nancy M. Morris, Secretary, Inc. (‘‘CHX’’ or ‘‘Exchange’’) filed with Securities and Exchange Commission, the Securities and Exchange 100 F Street, NE., Washington, DC Commission (‘‘Commission’’) the 20549–1090. proposed rule change as described in All submissions should refer to File Items I, II, and III below, which Items Number SR–CBOE–2007–68. This file have been substantially prepared by number should be included on the CHX. The Commission is publishing subject line if e-mail is used. To help the this notice to solicit comments on the Commission process and review your proposed rule change from interested comments more efficiently, please use persons. only one method. The Commission will post all comments on the Commission’s I. Self-Regulatory Organization’s Statement of the Terms of Substance of Internet Web site (http://www.sec.gov/ the Proposed Rule Change rules/sro.shtml). Copies of the submission, all subsequent The Exchange proposes to amend its amendments, all written statements rules to provide that market odd lot with respect to the proposed rule orders would be executed like round lot change that are filed with the Commission, and all written 6 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). communications relating to the 2 17 CFR 240.19b–4. proposed rule change between the VerDate Aug<31>2005 17:45 Oct 30, 2007 Jkt 214001 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 orders in the Exchange’s Matching System (i.e., executed as if they were subject to Regulation NMS Rule 611 3). Below is the text of the proposed rule change. Proposed new language is in italics; proposed deletions are in [brackets].4 Article 20 Operation of Chx Matching System * * * * * Prevention of Trade-throughs Rule 5.a. An inbound order for at least a round lot is not eligible for execution on the Exchange if its execution would cause an improper trade-through of another ITS market or, when Reg NMS is implemented for a security, if its execution would be improper under Rule 611 (but not including the exception set out in Rule 611(b)(8)) (together an ‘‘improper tradethrough’’[’’]). As described in Interpretation and Policy .03, if the execution of all or part of an inbound order for at least a round lot on the Exchange would cause an improper trade-through, that order (or the portion of that order that would cause a tradethrough) shall be routed to another appropriate market or, if designated as ‘‘do not route,’’ automatically cancelled; provided, however, that if an undisplayed order is resting in the Matching System and the execution of an inbound round lot order (that is not an IOC or FOK order) against the undisplayed resting order would cause an improper trade-through, the resting order shall be cancelled to the extent necessary to allow the inbound order to be executed or quoted. b. Inbound odd lot limit orders and odd lot crosses shall be eligible for execution on the Exchange even if the execution would trade through another market’s bid or offer. Inbound odd lot market orders shall be executed, for purposes of this Rule, as if they were round lot orders and subject to the requirements of paragraph (a) above. * * * * * II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed 3 17 CFR 242.611. Exchange has consented to the removal of an extra quotation mark from the current text of Article 20, Rule 5(a) of the CHX Rules. See E-mail from Ellen Neely, President and General Counsel, CHX to David Michehl, Special Counsel, Division of Market Regulation, Commission on October 23, 2007. 4 The E:\FR\FM\31OCN1.SGM 31OCN1

Agencies

[Federal Register Volume 72, Number 210 (Wednesday, October 31, 2007)]
[Notices]
[Pages 61694-61696]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-21383]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56701; File No. SR-CBOE-2007-68]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing of Proposed Rule Change, as Modified by 
Amendment No. 1, Regarding Complex Orders

October 25, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 20, 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 prepared 
substantially by the CBOE. On October 19, 2007, the CBOE filed 
Amendment No. 1 to the proposed rule change.\3\ The Commission is 
publishing this notice to solicit comments on the proposed rule change, 
as modified by Amendment No. 1, from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 replaces the original filing in its 
entirety.
---------------------------------------------------------------------------

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

    The CBOE proposes to amend its rules regarding the handling of 
certain complex orders. The text of the proposed rule change is 
available on the Exchange's Web site at (http://

[[Page 61695]]

www.cboe.org/Legal), at the CBOE's Office of the Secretary, and at the 
Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant aspects of such 
statements.

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

1. Purpose
    CBOE Rule 6.53C, ``Complex Orders on the Hybrid System,'' governs 
the electronic handling and execution of complex orders by the 
Exchange's Hybrid System. The purpose of this filing is to allow for 
the electronic handling and execution of stock-option orders on the 
Exchange. These are a type of complex order that consist of an option 
component and a stock component. Stock-option orders are popular with 
investors (e.g., buy-writes) and are frequently handled on CBOE. To 
date, these orders are handled manually and the option component is 
traded in open outcry by a broker. With the establishment of the CBOE 
Stock Exchange (``CBSX''), an electronic stock trading facility of 
CBOE, the Exchange is now positioned to handle and trade stock-option 
orders electronically, with the stock component execution taking place 
on CBSX.
    The Exchange proposes to handle these orders in a manner that is 
substantially similar to other complex orders handled pursuant to CBOE 
Rule 6.53C. Electronic stock-option orders will be accepted by the 
Hybrid System and auctioned in the Complex Order Auction (``COA'') 
pursuant to CBOE Rule 6.53C(d) when the requirements for an auction are 
met. An unexecuted stock-option order can also be maintained by the 
system (either in the Complex Order Book (``COB'') or on the PAR 
workstation), either of which will monitor the marketability of the 
order, taking into account the CBSX market for the execution of the 
stock component of the order.
    There are four differences between the handling of stock-option 
orders and other complex order types handled pursuant to CBOE Rule 
6.53C. First, as previously mentioned, the stock portion of the stock-
option order will be executed on CBSX. All such executions will be 
consistent with CBSX trading rules, including priority and matching 
rules. The execution of the stock-option order cannot take place until 
the desired price of the stock component is achievable on CBSX. The 
option leg of the stock-option order will not trade ahead of any 
resting public customer orders on the Hybrid book. This is consistent 
with existing CBOE Rule 6.45A(b)(ii), which provides that stock-option 
orders do not have priority over bids/offers in the public customer 
limit order book. The option leg may be executed in one-cent increments 
regardless of the minimum increment applicable to the series.
    For example: a customer enters a buy-write order to buy 100 shares 
of XYZ (trading around $40) and sell a 45 call with a net price of 
$39.00. There is a public customer order in the Hybrid book to sell the 
45 call for $1. When executing the buy-write against auction responses, 
the system will not allow the option leg of the transaction to trade at 
$1 or higher (thereby preserving the resting limit order's priority at 
that price). An execution could occur where the option leg prints at 
$0.99 and the stock trade prints at $39.99 (in accordance with CBSX 
priority rules). This meets the buy-write's limit price (involving a 
total cost of $3900) and does not violate priority on CBOE or CBSX.
    Second, the execution of a stock-option order submitted to the COB 
is slightly different than the priority outlined in CBOE Rule 
6.53C(c)(ii). More specifically, a stock-option order submitted to the 
CBOE will trade in the following sequence: (1) Against other stock-
option orders in the COB using public customer priority and then time 
priority (thus, if there are multiple public customer and broker-dealer 
stock-option orders resting in COB, the public customer orders will 
trade first with time priority among them, and then the broker-dealer 
orders will trade with time priority among them); (2) against 
individual orders or quotes on the Exchange (i.e., the CBSX book and 
the options Hybrid book), provided the stock-option order can be 
executed in full (or in a permissible ratio); and (3) against orders or 
quotes submitted by Market Participants, as set forth in CBOE Rule 
6.53C(c)(ii)(3). Because a portion of a stock-option order is executed 
on a different platform (CBSX), it is more practical to execute resting 
stock-option orders against other stock-option orders received by the 
system first before scanning for executions against the legs on the 
CBSX book and the options Hybrid book.
    The third difference involves the manner in which stock-option 
orders are executed through the COA. Individual orders and quotes for 
the various legs of the order will have last priority. Again, this is 
because it is more practical to execute resting stock-option orders 
against other stock-option orders received by the system first before 
scanning for executions against the legs on the CBSX book and the 
options Hybrid book.

    For example: the market for XYZ stock on CBSX is $39.94-39.99. 
The 45 call market on CBOE is $0.95-1.00. A stock-option order is 
entered to buy 100 shares and sell the 45 call with a net price of 
$39.00. The stock-option order is auctioned through the COA, but no 
responses are received (if responses had been received, priority 
would have been afforded to public customer responses and any 
resting public customer stock-option orders that were marketable 
against the auctioned order using time priority). After the system 
has determined that there are no responses or resting stock-option 
orders that can trade against the auctioned stock-option order, it 
will look to the individual leg markets. In this case, the stock-
option order will be filled by the system by executing the stock at 
$39.99 against the CBSX book and the option at $1 against the CBOE 
book.

    With respect to the last difference, the N-second group timer shall 
not be in effect for stock-option orders.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\4\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\5\ in particular, in that it 
is designed to facilitate transactions in securities, to promote just 
and equitable principles of trade, to prevent fraudulent and 
manipulative acts and, in general, to protect investors and the public 
interest. In particular, the Exchange believes that the addition of 
stock-option orders to the list of complex orders eligible for 
electronic handling under CBOE Rule 6.53C is a significant enhancement 
for investors seeking automated handling of stock-option orders.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    CBOE does not believe that the proposed rule change will impose any 
burden on competition that is not

[[Page 61696]]

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-2007-68 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-2007-68. 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, 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 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-2007-68 and should be 
submitted on or before November 21, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
[FR Doc. E7-21383 Filed 10-30-07; 8:45 am]
BILLING CODE 8011-01-P