Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To Amend CBOE Rule 6.13A To Modify the Simple Auction Liaison Auction Process and Incorporate Specific Provisions for Hybrid 3.0 Classes, 62883-62885 [E7-21838]
Download as PDF
<![CDATA[
Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Notices
For the Nuclear Regulatory Commission.
Peter J. Habighorst,
Chief, Fuel Manufacturing Branch, Fuel
Facility Licensing Directorate, Division of Fuel
Cycle Safety and Safeguards, Office of
Nuclear Material Safety and Safeguards.
[FR Doc. E7–21861 Filed 11–6–07; 8:45 am]
OFFICE OF PERSONNEL
MANAGEMENT
Submission for OMB Review;
Comment Request for Review of an
Extension, Without Change, of a
Currently Approved Information
Collection: SF 2823
Brenda Aguilar, OPM Desk Officer,
Office of Information & Regulatory
Affairs, Office of Management and
Budget, New Executive Office Building,
NW., Room 10235, Washington, DC
20503.
For Information Regarding
Administrative Coordination Contact:
Cyrus S. Benson, Team Leader,
Publications Team, RIS Support
Services/Support Group, (202) 606–
0623.
Classes in which SAL is activated. The
text of the proposed rule change is
available on the Exchange’s Web site
(https://www.cboe.com/Legal ), at the
Exchange’s Office of the Secretary, and
at the Commission’s Public Reference
Room.
U.S. Office of Personnel Management.
Howard Weizmann,
Deputy Director.
[FR Doc. E7–21862 Filed 11–6–07; 8:45 am]
BILLING CODE 7590–01–P
In its filing with the Commission,
CBOE included statements concerning
the purpose of, and basis for, the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. CBOE has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
BILLING CODE 6325–38–P
Office of Personnel
Management.
ACTION: Notice.
pwalker on PROD1PC71 with NOTICES
AGENCY:
SECURITIES AND EXCHANGE
COMMISSION
SUMMARY: In accordance with the
Paperwork Reduction Act of 1995 (Pub.
L. 104–13, May 22, 1995), this notice
announces that the Office of Personnel
Management (OPM) will submit to the
Office of Management and Budget
(OMB) a request for review of an
extension, without change, of a
currently approved information
collection. SF 2823, Designation of
Beneficiary: Federal Employees’ Group
Life Insurance, is used by any Federal
employee or retiree covered by the
Federal Employees’ Group Life
Insurance Program to instruct the Office
of Federal Employees’ Group Life
Insurance how to distribute the
proceeds of his or her life insurance
when the statutory order of precedence
does not meet his or her needs.
Approximately 47,000 SF 2823 forms
are completed annually by annuitants
and 1,000 forms are completed by
assignees. Each form takes
approximately 15 minutes to complete.
The annual estimated burden is 12,000
hours.
For copies of this proposal, contact
Mary Beth Smith-Toomey on (202) 606–
8358, FAX (202) 418–3251 or via e-mail
to MaryBeth.Smith-Toomey@opm.gov.
Please include a mailing address with
your request.
DATES: Comments on this proposal
should be received within 30 calendar
days from the date of this publication.
ADDRESSES: Send or deliver comments
to—
Christopher N. Meuchner, Life
Insurance and Long Term Care Group,
Insurance Services Program, Center for
Retirement and Insurance Services, U.S.
Office of Personnel Management, 1900 E
Street, NW., Room 2H22, Washington,
DC 20415–3661;
and
VerDate Aug<31>2005
16:14 Nov 06, 2007
Jkt 214001
62883
[Release No. 34–56730; File No. SR–CBOE–
2007–74]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing of
Proposed Rule Change, as Modified by
Amendment No. 1 Thereto, To Amend
CBOE Rule 6.13A To Modify the Simple
Auction Liaison Auction Process and
Incorporate Specific Provisions for
Hybrid 3.0 Classes
November 1, 2007.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on July 2,
2007, The Chicago Board Options
Exchange, Incorporated (‘‘CBOE’’ or
‘‘Exchange’’), filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
substantially prepared by CBOE. On
October 16, 2007, 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 amended, from
interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
CBOE proposes to amend CBOE Rule
6.13A to (i) modify the increments in
which responses may be submitted
during the Simple Auction Liaison
(‘‘SAL’’) auction process and (ii)
incorporate provisions for Hybrid 3.0
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Amendment No. 1 replaced and superseded the
original filing in its entirety.
2 17
PO 00000
Frm 00072
Fmt 4703
Sfmt 4703
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 6.13A governs the
operation of the Exchange’s SAL system.
SAL is a feature on CBOE’s Hybrid
system that auctions marketable orders
for price improvement over the National
Best Bid and Offer. The purpose of this
proposed rule change is to amend CBOE
Rule 6.13A to (i) modify the increments
in which responses may be submitted
during the SAL auction process and (ii)
incorporate provisions for Hybrid 3.0
Classes in which SAL is activated.
Although modifying the auction
increments in which responses could be
submitted to include standard
increments would widen the quote as
compared to one-cent increments, the
Exchange believes this modification
may encourage Market-Makers and
other market participants to quote more
aggressively overall. In addition,
incorporating SAL on the Hybrid 3.0
Platform will further automate the order
handling process on Hybrid 3.0.
In providing marketable orders with
the potential for price improvement,
SAL provides an auction, for a period of
time not to exceed two seconds as
determined by the Exchange on a classby-class basis, for any qualifying order
(‘‘Agency Order’’) that is eligible for
automatic execution by CBOE’s Hybrid
System.4 Under the current SAL rule,
during the auction process, MarketMakers with an appointment in the
relevant option class and CBOE
members acting as agents for orders
4 See
E:\FR\FM\07NON1.SGM
CBOE Rule 6.13(b)(C)(i).
07NON1
62884
Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Notices
pwalker on PROD1PC71 with NOTICES
resting at the top of the Exchange’s book
opposite the Agency Order could submit
a response during the auction. CBOE
Rule 6.13A(b) outlines the procedures
regarding how a response shall be
submitted during the auction and
provides that the response may be
submitted in one-cent increments. This
filing proposes to modify this rule to
allow the auction response in all option
classes in which SAL is activated to be
submitted in one-cent increments,
unless for the relevant option class the
Exchange has determined that responses
shall be submitted in standard
increments.5
Pursuant to CBOE’s existing SAL rule,
Agency Orders would be allocated
intwo rounds.6 For Hybrid 3.0 Classes,
the filing proposes to conduct only one
round of allocations, since the DPM/
LMM is the only ‘‘quoter’’ on the Hybrid
3.0 Platform.7 Specifically, the first
round allocation specified in paragraph
(c)(i) shall not apply. In Hybrid 3.0
Classes, the single round allocation will
be conducted pursuant to the criteria in
paragraph (c)(ii), with a few differences.
Such differences involve proposed
modifications to the allocation and
participation entitlement process for
SAL on Hybrid 3.0 Classes. The current
SAL rule allocates the Agency Order
pursuant to the matching algorithm that
is in effect for the class pursuant to Rule
6.45A or Rule 6.45B.8 This filing
proposes to provide the Exchange with
some flexibility regarding the allocation
of the Agency Order to permit the
matching algorithm as applied to SAL to
be different from the matching
algorithm that is currently in effect for
the Hybrid 3.0 Class. Therefore, for
Hybrid 3.0 Classes, the Exchange
proposes to allow the appropriate
Exchange Procedure Committee to
determine, on a class-by-class basis,
which electronic matching algorithm
shall apply to SAL executions. The
matching algorithm applied to SAL in
Hybrid 3.0 Classes will continue to be
pursuant to Rule 6.45B.
The existing SAL rule also provides
for a Market-Maker to receive a
participation entitlement only if the
applicable matching algorithm (from
Rule 6.45A or 6.45B) that is in effect for
the class includes a participation
5 See proposed changes to CBOE Rule
6.13A(b)(ii).
6 See CBOE Rule 6.13A(c).
7 Pursuant to CBOE Rule 1.1(aaa), the Hybrid 3.0
Platform is an electronic trading platform on the
Hybrid trading system that allows a single quoter
to submit an electronic quote which represents the
aggregate Market-Maker quoting interest in a series
for the trading crowd.
8 See CBOE Rule 6.13A(c)(1).
VerDate Aug<31>2005
16:14 Nov 06, 2007
Jkt 214001
entitlement.9 Currently, Hybrid 3.0 does
not permit an LMM or DPM to receive
a participation entitlement as it pertains
to the allocation of incoming electronic
orders. In Hybrid 3.0 Classes, pursuant
to existing rules, all eligible orders
pursuant to Rule 6.13 can receive
automatic execution against public
customer orders in the electronic book.
The remaining balance of the eligible
order, if any, may be represented in the
electronic book, provided such order is
eligible for book entry pursuant to Rule
7.4; if not book eligible, the remaining
balance of the eligible order will route
to PAR, BART, or the order entry firm’s
book printer.10 Orders not eligible for
automatic execution will route on a
class-by-class basis to PAR, BART, or
the order entry firm’s booth printer.11
Since the LMM or DPM does not receive
a participation entitlement with regard
to incoming electronic orders, this filing
proposes to permit the appropriate
Exchange Market Performance
Committee to establish, on a class-byclass basis, an LMM or DPM
participation entitlement applicable
only to SAL executions in Hybrid 3.0
Classes. Incorporating SAL on the
Hybrid 3.0 Platform will provide not
only a more automated order handling
process in Hybrid 3.0 Classes, but will
also provide Market-Makers with
electronic access to the Agency Order
since Market-Makers will be able to
electronically respond to the Agency
Order through SAL. The Exchange
believes that with Market-Makers
having access to electronically respond
to the Agency Order, incorporating an
LMM/DPM participation entitlement to
SAL executions may in turn provide
more aggressive quoting. The
participation entitlement shall be in
compliance with the provisions of Rule
6.45B(a)(i)(2). The size of each response
to the SAL auction shall continue to be
capped to the size of the Agency Order
for allocation purposes.
When the SAL system is enabled, the
Exchange will conduct a SAL auction
only when the Exchange’s quote is
represented by the DPM/LMM quote.
The Exchange will not conduct a SAL
auction when the Exchange’s quote is
represented by a manual quote.12 All
other aspects of SAL pursuant to CBOE
Rule 6.13A shall apply to Hybrid 3.0
Classes.
2. Statutory Basis
As noted above, modifying the SAL
auction increments in which responses
9 See
CBOE Rule 6.13A(c)(3).
CBOE Rule 6.13(b)(i)(A)(2).
11 See CBOE Rule 6.13(b)(i)(B).
12 See proposed CBOE 6.13A.04(iii).
could be submitted to include standard
increments may encourage more
aggressive quoting, and incorporating
SAL on the Hybrid 3.0 Platform will
further automate the order handling
process on Hybrid 3.0. Accordingly, the
Exchange believes the proposed rule
change is consistent with Section 6(b) of
the Act 13 in general and furthers the
objectives of Section 6(b)(5) of the Act 14
in particular in that it should promote
just and equitable principles of trade,
serve to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and protect investors and the
public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
This proposed rule change does not
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
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 CBOE 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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
10 See
PO 00000
Frm 00073
Fmt 4703
Sfmt 4703
13 15
14 15
E:\FR\FM\07NON1.SGM
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
07NON1
Federal Register / Vol. 72, No. 215 / Wednesday, November 7, 2007 / Notices
Number SR–CBOE–2007–74 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
pwalker on PROD1PC71 with NOTICES
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
[Release No. 34–56733; File No. SR–ISE–
2007–101]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing of Proposed Rule
Change Relating to a Corporate
All submissions should refer to File
Transaction in Which Its Parent,
Number SR–CBOE–2007–74. This file
International Securities Exchange
number should be included on the
Holdings, Inc., Will Become a Whollysubject line if e-mail is used. To help the Owned Indirect Subsidiary of Eurex
Commission process and review your
Frankfurt AG
comments more efficiently, please use
only one method. The Commission will November 1, 2007.
post all comments on the Commission’s
Pursuant to Section 19(b)(1) of the
Internet Web site (https://www.sec.gov/
Securities Exchange Act of 1934
rules/sro.shtml). Copies of the
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
submission, all subsequent
notice is hereby given that on November
amendments, all written statements
1, 2007, the International Securities
with respect to the proposed rule
Exchange, LLC (‘‘Exchange’’ or ‘‘ISE’’)
change that are filed with the
filed with the Securities and Exchange
Commission, and all written
Commission (‘‘Commission’’) the
communications relating to the
proposed rule change as described in
proposed rule change between the
Items I, II, and III below, which items
Commission and any person, other than have been prepared substantially by the
those that may be withheld from the
Exchange. The Commission is
public in accordance with the
publishing this notice to solicit
provisions of 5 U.S.C. 552, will be
comments on the proposed rule change
available for inspection and copying in
from interested persons.
the Commission’s Public Reference
Room on official business days between I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the hours of 10 a.m. and 3 p.m. Copies
the Proposed Rule Change
of such filing also will be available for
inspection and copying at the principal
Under the proposed rule change, the
office of the CBOE. All comments
ISE is proposing a corporate transaction
received will be posted without change; (‘‘Transaction’’) in which its parent,
the Commission does not edit personal
International Securities Exchange
identifying information from
Holdings, Inc. (‘‘Holdings’’ or
submissions. You should submit only
‘‘Corporation’’), will become a whollyinformation that you wish to make
owned indirect subsidiary of Eurex
available publicly.
Frankfurt AG (‘‘Eurex Frankfurt’’),
which operates a derivatives exchange.
All submissions should refer to File
Number SR–CBOE–2007–74 and should Article FOURTH, Section III of
be submitted on or before November 28, Holdings’ Certificate of Incorporation
(‘‘Certificate’’) imposes certain
2007.
ownership and voting restrictions
For the Commission, by the Division of
(‘‘Restrictions’’) that, in effect, require
Market Regulation, pursuant to delegated
approval of the Transaction by the
15
authority.
Commission. Specifically, the
Florence E. Harmon,
Certificate provides that Holdings’ board
Deputy Secretary.
of directors (‘‘Board of Directors’’) may
[FR Doc. E7–21838 Filed 11–6–07; 8:45 am]
waive the Restrictions in an amendment
BILLING CODE 8011–01–P
to the Bylaws of the Holdings
(‘‘Bylaws’’) if the Board of Directors
makes certain findings and the
amendment to the Bylaws is approved
by the Commission. Acting pursuant to
this waiver provision, the Board of
Directors has approved the following
amendment to the Bylaws:
1 15
15 17
CFR 200.30–3(a)(12).
VerDate Aug<31>2005
16:14 Nov 06, 2007
2 17
Jkt 214001
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00074
Fmt 4703
Sfmt 4703
62885
Article XI—Waiver of Limits
Section 1.1 Waiver of Ownership
Limits and Voting Limits To Permit
Merger.
(a) The Board of Directors hereby
waives (i) pursuant to Article FOURTH,
Section III(a)(i) of the certificate of
incorporation of the Corporation dated
November 16, 2004, as amended, (‘‘2004
Certificate’’), the restrictions on
ownership of capital stock of the
Corporation described in Article
FOURTH, Section III(a)(i) of the 2004
Certificate, and (ii) pursuant to Article
FOURTH, Section III(b)(i) of the 2004
Certificate, the restrictions on voting
rights with respect to the capital stock
of the Corporation as described in
Article FOURTH, Section III(b)(i) of the
2004 Certificate, in each case solely in
order to permit the merger and the other
transactions contemplated by that
certain Agreement and Plan of Merger,
dated as of April 30, 2007, by and
among Eurex Frankfurt AG, a stock
corporation organized under the laws of
the Federal Republic of Germany
(‘‘Eurex Frankfurt’’), Ivan Acquisition
Co., a Delaware corporation and a
wholly-owned indirect subsidiary of
Eurex Frankfurt, and the Corporation,
under which the Corporation (A) will
become a wholly-owned subsidiary of
U.S. Exchange Holdings, Inc., a
Delaware corporation that is a whollyowned subsidiary of Eurex Frankfurt,
and (B) will become an indirect
subsidiary of Eurex Frankfurt, Eurex
Zurich AG (‘‘Eurex Zurich’’), a stock
corporation organized under the laws of
Switzerland, Deutsche Brse AG
(‘‘Deutsche Brse’’), a stock corporation
organized under the laws of the Federal
Republic of Germany, SWX Swiss
Exchange (‘‘SWX’’), a stock corporation
organized under the laws of
Switzerland, SWX Group, a stock
corporation organized under the laws of
Switzerland, and Verein SWX Swiss
Exchange, an association organized
under the laws of Switzerland. For the
purpose of this Article XI, Deutsche
Brse, Eurex Frankfurt, Eurex Zurich,
SWX, SWX Group, Verein SWX Swiss
Exchange, and U.S. Exchange Holdings,
Inc. are collectively referred to as the
‘‘Upstream Owners.’’
(b) In so waiving the applicable
Ownership Limits and Voting Limits to
allow ownership and voting of the
capital stock of the Corporation by the
Upstream Owners, the Board of
Directors has determined, with respect
to each Upstream Owner, that: (i) Such
waiver will not impair the ability of the
Corporation and ISE, LLC to carry out
ISE, LLC’s functions and responsibilities
as an ‘‘exchange’’ under the Exchange
E:\FR\FM\07NON1.SGM
07NON1
]]>Agencies
[Federal Register Volume 72, Number 215 (Wednesday, November 7, 2007)]
[Notices]
[Pages 62883-62885]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-21838]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56730; File No. SR-CBOE-2007-74]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing of Proposed Rule Change, as Modified by
Amendment No. 1 Thereto, To Amend CBOE Rule 6.13A To Modify the Simple
Auction Liaison Auction Process and Incorporate Specific Provisions for
Hybrid 3.0 Classes
November 1, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 2, 2007, The Chicago Board Options Exchange, Incorporated
(``CBOE'' or ``Exchange''), filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been substantially
prepared by CBOE. On October 16, 2007, 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 amended, from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment No. 1 replaced and superseded the original filing
in its entirety.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
CBOE proposes to amend CBOE Rule 6.13A to (i) modify the increments
in which responses may be submitted during the Simple Auction Liaison
(``SAL'') auction process and (ii) incorporate provisions for Hybrid
3.0 Classes in which SAL is activated. The text of the proposed rule
change is available on the Exchange's Web site (https://www.cboe.com/
Legal ), at the Exchange's Office of the Secretary, and at the
Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, CBOE included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. CBOE has prepared summaries, set forth in Sections A, B,
and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
CBOE Rule 6.13A governs the operation of the Exchange's SAL system.
SAL is a feature on CBOE's Hybrid system that auctions marketable
orders for price improvement over the National Best Bid and Offer. The
purpose of this proposed rule change is to amend CBOE Rule 6.13A to (i)
modify the increments in which responses may be submitted during the
SAL auction process and (ii) incorporate provisions for Hybrid 3.0
Classes in which SAL is activated. Although modifying the auction
increments in which responses could be submitted to include standard
increments would widen the quote as compared to one-cent increments,
the Exchange believes this modification may encourage Market-Makers and
other market participants to quote more aggressively overall. In
addition, incorporating SAL on the Hybrid 3.0 Platform will further
automate the order handling process on Hybrid 3.0.
In providing marketable orders with the potential for price
improvement, SAL provides an auction, for a period of time not to
exceed two seconds as determined by the Exchange on a class-by-class
basis, for any qualifying order (``Agency Order'') that is eligible for
automatic execution by CBOE's Hybrid System.\4\ Under the current SAL
rule, during the auction process, Market-Makers with an appointment in
the relevant option class and CBOE members acting as agents for orders
[[Page 62884]]
resting at the top of the Exchange's book opposite the Agency Order
could submit a response during the auction. CBOE Rule 6.13A(b) outlines
the procedures regarding how a response shall be submitted during the
auction and provides that the response may be submitted in one-cent
increments. This filing proposes to modify this rule to allow the
auction response in all option classes in which SAL is activated to be
submitted in one-cent increments, unless for the relevant option class
the Exchange has determined that responses shall be submitted in
standard increments.\5\
---------------------------------------------------------------------------
\4\ See CBOE Rule 6.13(b)(C)(i).
\5\ See proposed changes to CBOE Rule 6.13A(b)(ii).
---------------------------------------------------------------------------
Pursuant to CBOE's existing SAL rule, Agency Orders would be
allocated intwo rounds.\6\ For Hybrid 3.0 Classes, the filing proposes
to conduct only one round of allocations, since the DPM/LMM is the only
``quoter'' on the Hybrid 3.0 Platform.\7\ Specifically, the first round
allocation specified in paragraph (c)(i) shall not apply. In Hybrid 3.0
Classes, the single round allocation will be conducted pursuant to the
criteria in paragraph (c)(ii), with a few differences.
---------------------------------------------------------------------------
\6\ See CBOE Rule 6.13A(c).
\7\ Pursuant to CBOE Rule 1.1(aaa), the Hybrid 3.0 Platform is
an electronic trading platform on the Hybrid trading system that
allows a single quoter to submit an electronic quote which
represents the aggregate Market-Maker quoting interest in a series
for the trading crowd.
---------------------------------------------------------------------------
Such differences involve proposed modifications to the allocation
and participation entitlement process for SAL on Hybrid 3.0 Classes.
The current SAL rule allocates the Agency Order pursuant to the
matching algorithm that is in effect for the class pursuant to Rule
6.45A or Rule 6.45B.\8\ This filing proposes to provide the Exchange
with some flexibility regarding the allocation of the Agency Order to
permit the matching algorithm as applied to SAL to be different from
the matching algorithm that is currently in effect for the Hybrid 3.0
Class. Therefore, for Hybrid 3.0 Classes, the Exchange proposes to
allow the appropriate Exchange Procedure Committee to determine, on a
class-by-class basis, which electronic matching algorithm shall apply
to SAL executions. The matching algorithm applied to SAL in Hybrid 3.0
Classes will continue to be pursuant to Rule 6.45B.
---------------------------------------------------------------------------
\8\ See CBOE Rule 6.13A(c)(1).
---------------------------------------------------------------------------
The existing SAL rule also provides for a Market-Maker to receive a
participation entitlement only if the applicable matching algorithm
(from Rule 6.45A or 6.45B) that is in effect for the class includes a
participation entitlement.\9\ Currently, Hybrid 3.0 does not permit an
LMM or DPM to receive a participation entitlement as it pertains to the
allocation of incoming electronic orders. In Hybrid 3.0 Classes,
pursuant to existing rules, all eligible orders pursuant to Rule 6.13
can receive automatic execution against public customer orders in the
electronic book. The remaining balance of the eligible order, if any,
may be represented in the electronic book, provided such order is
eligible for book entry pursuant to Rule 7.4; if not book eligible, the
remaining balance of the eligible order will route to PAR, BART, or the
order entry firm's book printer.\10\ Orders not eligible for automatic
execution will route on a class-by-class basis to PAR, BART, or the
order entry firm's booth printer.\11\ Since the LMM or DPM does not
receive a participation entitlement with regard to incoming electronic
orders, this filing proposes to permit the appropriate Exchange Market
Performance Committee to establish, on a class-by-class basis, an LMM
or DPM participation entitlement applicable only to SAL executions in
Hybrid 3.0 Classes. Incorporating SAL on the Hybrid 3.0 Platform will
provide not only a more automated order handling process in Hybrid 3.0
Classes, but will also provide Market-Makers with electronic access to
the Agency Order since Market-Makers will be able to electronically
respond to the Agency Order through SAL. The Exchange believes that
with Market-Makers having access to electronically respond to the
Agency Order, incorporating an LMM/DPM participation entitlement to SAL
executions may in turn provide more aggressive quoting. The
participation entitlement shall be in compliance with the provisions of
Rule 6.45B(a)(i)(2). The size of each response to the SAL auction shall
continue to be capped to the size of the Agency Order for allocation
purposes.
---------------------------------------------------------------------------
\9\ See CBOE Rule 6.13A(c)(3).
\10\ See CBOE Rule 6.13(b)(i)(A)(2).
\11\ See CBOE Rule 6.13(b)(i)(B).
---------------------------------------------------------------------------
When the SAL system is enabled, the Exchange will conduct a SAL
auction only when the Exchange's quote is represented by the DPM/LMM
quote. The Exchange will not conduct a SAL auction when the Exchange's
quote is represented by a manual quote.\12\ All other aspects of SAL
pursuant to CBOE Rule 6.13A shall apply to Hybrid 3.0 Classes.
---------------------------------------------------------------------------
\12\ See proposed CBOE 6.13A.04(iii).
---------------------------------------------------------------------------
2. Statutory Basis
As noted above, modifying the SAL auction increments in which
responses could be submitted to include standard increments may
encourage more aggressive quoting, and incorporating SAL on the Hybrid
3.0 Platform will further automate the order handling process on Hybrid
3.0. Accordingly, the Exchange believes the proposed rule change is
consistent with Section 6(b) of the Act \13\ in general and furthers
the objectives of Section 6(b)(5) of the Act \14\ in particular in that
it should promote just and equitable principles of trade, serve to
remove impediments to and perfect the mechanism of a free and open
market and a national market system, and protect investors and the
public interest.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
This proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
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 CBOE 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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File
[[Page 62885]]
Number SR-CBOE-2007-74 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-2007-74. 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 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-2007-74 and
should be submitted on or before November 28, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-21838 Filed 11-6-07; 8:45 am]
BILLING CODE 8011-01-P
