Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Complex Orders, 3293-3295 [E8-708]
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Federal Register / Vol. 73, No. 12 / Thursday, January 17, 2008 / Notices
Non-burden impacting formatting and
editorial changes are also proposed.
The burden estimate for the ICR is as
follows:
Estimated Completion Time for
Form(s): Completion time for Form DR–
423 is estimated at 85 minutes.
Estimated annual number of
respondents: 1,200.
Total annual responses: 1,200.
Total annual reporting hours: 1,700.
Additional Information or Comments:
Copies of the forms and supporting
documents can be obtained from
Charles Mierzwa, the agency clearance
officer (312–751–3363) or
Charles.Mierzwa@rrb.gov.
Comments regarding the information
collection should be addressed to
Ronald J. Hodapp, Railroad Retirement
Board, 844 North Rush Street, Chicago,
Illinois 60611–2092 or
Ronald.Hodapp@rrb.gov and to the
OMB Desk Officer for the RRB, at the
Office of Management and Budget,
Room 10230, New Executive Office
Building, Washington, DC 20503.
Information Collection Request (ICR)
mstockstill on PROD1PC66 with NOTICES
other forms of information technology.
Comments to RRB or OIRA must contain
the OMB control number of the ICR. For
proper consideration of your comments,
it is best if RRB and OIRA receive them
within 30 days of publication date.
Under section 10 of the Railroad
Retirement Act and section 2(d) of the
Railroad Unemployment Insurance Act,
the RRB may recover overpayments of
annuities, pensions, death benefits,
unemployment benefits, and sickness
benefits that were made erroneously. An
overpayment may be waived if the
beneficiary was not at fault in causing
the overpayment and recovery would
cause financial hardship. The
regulations for the recovery and waiver
of erroneous payments are contained in
20 CFR 255 and CFR 340.
The RRB utilizes Form DR–423,
Financial Disclosure Statement, to
obtain information about the overpaid
beneficiary’s income, debts, and
expenses if that person indicates that
(s)he cannot make restitution for the
overpayment. The information is used
to determine if the overpayment should
be waived as wholly or partially
uncollectible. If waiver is denied, the
information is used to determine the
size and frequency of installment
payments. The beneficiary is made
aware of the overpayment by letter and
is offered a variety of methods for
recovery. One response is requested of
each respondent. Completion is
voluntary. However, failure to provide
the requested information may result in
a denial of the waiver request.
Previous Requests for Comments: The
RRB has already published the initial
60-day notice (72 FR 61192 on October
29, 2007) required by 44 U.S.C.
3506(c)(2). That request elicited no
comments.
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 January 4,
2008, the Chicago Board Options
Exchange, Incorporated (‘‘CBOE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) a proposed rule change
as described in Items I and II below,
which Items have been prepared
substantially by CBOE. The Exchange
filed the proposal as a ‘‘noncontroversial’’ 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 the proposal effective
Title: Financial Disclosure Statement.
OMB Control Number: 3220–0127.
Form(s) submitted: DR–423.
Type of request: Revision of a
currently approved collection.
Affected public: Individuals or
Households.
Abstract: Under the Railroad
Retirement and the Railroad
Unemployment Insurance Acts, the
Railroad Retirement Board has authority
to secure from an overpaid beneficiary
a statement of the individual’s assets
and liabilities if waiver of the
overpayment is requested.
Changes Proposed: The RRB proposes
the deletion of items requesting the
railroad employee’s Social Security
Number and their spouse’s Social
Security Number from Form DR–423.
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Jkt 214001
Charles Mierzwa,
Clearance Officer.
[FR Doc. E8–734 Filed 1–16–08; 8:45 am]
BILLING CODE 7905–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57119; File No. CBOE–
2008–01]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to Complex
Orders
January 9, 2008.
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).
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3293
upon receipt of this filing by the
Commission. 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 Exchange proposes to amend
CBOE Rule 6.42, Minimum Increments
for Bids and Offers, in order to clarify
which option classes overlying the S&P
500 Index and S&P 100 Index are
subject to the requirement that bids and
offers on complex orders,5 except for
box/roll spreads, be expressed in
decimal increments no smaller than
$0.05 and to provide that the
appropriate Exchange Committee may
determine to modify the applicable
increment on a class-by-class basis.
CBOE also proposes to amend CBOE
Rule 6.53C, Complex Orders on the
Hybrid System, to make certain
clarification changes respecting the
applicable minimum increment for
complex orders. In addition, CBOE is
proposing various non-substantive,
typographical changes to the two rules.
The text of the proposed rule change is
available at CBOE, the Commission’s
Public Reference Room, and https://
www.cboe.com/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,
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
The purpose of this filing is to make
various changes to the Exchange’s rules
pertaining to complex orders. First, the
Exchange is proposing to amend CBOE
Rule 6.42. Rule 6.42 establishes the
minimum trading increments for
options traded on the Exchange. Rule
5 A ‘‘complex order’’ means a spread, straddle,
combination or ratio order as defined in CBOE Rule
6.53, a stock-option order as defined in CBOE Rule
1.1(ii), a security future-option order as defined in
CBOE Rule 1.1(zz), or any other complex order as
defined in Rule 6.53C. See CBOE Rule 6.42.01.
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Federal Register / Vol. 73, No. 12 / Thursday, January 17, 2008 / Notices
6.42(1) provides that, subject to Rule
6.42(2), bids and offers shall be
expressed in decimal increments no
smaller than $.10 unless a different
increment is approved by the
appropriate Exchange committee for an
option contract of a particular series.
Rule 6.42(2) provides that bids and
offers for all option series quoted below
$3.00 a contract shall be expressed in
decimal increments no smaller than
$.05. Rule 6.42(3) provides that bids and
offers for all series of the options classes
participating in the Penny Pilot
Program6 will be announced via
Regulatory Circular. Rule 6.42(4)
provides that bids and offers on
complex orders may be expressed in any
increment, and the legs of a complex
order may be executed in one cent
increments, regardless of the minimum
increments otherwise appropriate to the
individual legs of the order. Thus, for
example, a complex order could be
entered at a net debit or credit price of
$1.03 even though the standard
minimum increment for the individual
series is generally $0.05 or $0.10. As an
exception to this provision, Rule 6.42(4)
also provides that bids and offers on
complex orders in options on the S&P
500 Index or the S&P 100 Index, except
for box/roll spreads, shall be expressed
in decimal increments no smaller than
$0.05. The Exchange is proposing the
following changes:
mstockstill on PROD1PC66 with NOTICES
• As currently worded, the text of Rule
6.42(4) simply refers to the underlying S&P
500 Index and S&P 100 Index, but not to the
particular overlying option classes. Although
there may be various options classes
overlying these indexes, the Exchange only
intends for the special increment to apply to
certain option classes. Therefore, the
Exchange is proposing to amend the text of
the rule to clarify that the special increments
apply only to the European-Style Exercise
S&P 500 Index options class (option symbol
‘‘SPX’’), the American-Style S&P 100 Index
options class (option symbol ‘‘OEX’’), and the
European-Style Exercise S&P 100 Index
options class (option symbol ‘‘XEO’’).7
6 See Securities Exchange Act Release 55154
(January 23, 2007), 72 FR 4743 (February 1,
2007)(order approving CBOE rule changes related to
the Penny Pilot Program, which permits certain
option classes to be quoted in pennies on a pilot
basis).
7 The Exchange notes that, when the provision
respecting these special increments was originally
adopted, it simply applied to options on the S&P
500 Index and that rule change filing referred to
those options as ‘‘SPX’’ options. See Securities
Exchange Act Release No. 45731 (April 11, 2002),
67 FR 19464 (April 19, 2002)(SR–CBOE–2001–62).
The rule change filing that extended the application
of the special increments to options on the S&P 100
Index referred to those options as ‘‘OEX’’ options.
See Securities Exchange Act Release No. 54135
(July 12, 2006), 71 FR 41287 (July 20, 2006)(SR–
CBOE–2005–65). Through the instant rule change,
the Exchange is proposing to clarify that the
reference to S&P 100 Index options should also
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17:07 Jan 16, 2008
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• To provide more flexibility, the
Exchange is proposing to amend Rule 6.42(4)
to provide that the appropriate Exchange
committee may determine on a class-by-class
basis whether the special increment
provisions will apply. Specifically, the
proposed rule change would permit the
appropriate Exchange committee to designate
the applicable minimum increment for bids
and offers on complex orders in the SPX,
OEX or XEO option class as either (i) the
special $0.05 increment or (ii) like other
options classes, any increment. The proposed
rule change also makes clear that, like other
complex orders, the legs of SPX, OEX or XEO
complex orders may be executed in $0.01
increments.8
Second, the Exchange is proposing to
amend CBOE Rule 6.53C. Rule 6.53C
contains separate provisions regarding
the minimum net price increment
applicable to complex orders that are
submitted to the Exchange’s electronic
complex order book (‘‘COB’’) and the
Exchange’s automated complex order
RFR auction process (‘‘COA’’). The rule
currently provides that the appropriate
Exchange committee will determine on
a class-by-class basis whether the
minimum net price increment for
complex orders submitted COB or COA,
as applicable, will be (i) a multiple of
the minimum increment (i.e., $0.05 or
$0.10, as applicable) or (ii) a $0.01
increment. The Exchange is proposing
to amend these provisions to provide
that the minimum net price increment
may be either a (i) multiple of the
minimum increment or (ii) a smaller
increment, provided that the increment
may not be less than $0.01. This change
is intended to provide additional clarity
and flexibility for determining the
applicable minimum net price
increment for COB and COA. For
example, the change accommodates the
application of a minimum $0.05 net
priced increment for COB and COA in
the OEX and XEO option classes,
similar to the special $0.05 increment
provided under Rule 6.42(4).
Finally, the Exchange is proposing to
make various non-substantive changes
to CBOE Rule 6.53C to update
references to the applicable minimum
increment (which now includes $0.01 in
series participating in the Penny Pilot
Program), delete an outdated reference
to interim procedures regarding the Ninclude XEO options, which only differ from the
OEX options in exercise style. As with OEX
options, the Exchange believes that application of
the special increment provisions to XEO options is
appropriate given the complexity of XEO orders and
the size of the underlying S&P 100 Index.
8 Two other non-substantive formatting changes
are also being proposed to the text of Rule 6.42
(specifically, the term ‘‘one cent’’ would be
replaced with ‘‘$0.01’’ and parentheticals (‘‘(’’)
would be added to the numbering contained in
Interpretation and Policy .02).
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second group timer (as described in
Rule 6.45A(c)), reorganize and make
various non-substantive changes to the
text for clarity, and combine certain
duplicative language regarding the
issuance of regulatory circulars.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with section
6(b) of the Act,9 in general, and furthers
the objectives of section 6(b)(5) of the
Act,10 in particular, in that it is designed
to prevent fraudulent and manipulative
acts and practices, promote just and
equitable principles of trade, remove
impediments to and perfect the
mechanisms of a free and open market
and a national market system, and, in
general, 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
No written comments were either
solicited or received with respect to the
proposed rule change.
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) thereunder.12
A proposed rule change filed under
Commission Rule 19b–4(f)(6) normally
does not become operative prior to
thirty days after the date of filing. The
CBOE requests that the Commission
waive the 5-day pre-filing notice
requirement as well as the 30-day
operative delay, as specified in Rule
19b–4(f)(6)(iii),13 and designate the
proposed rule change operative
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
11 15 U.S.C. 78s(b)(3)(A).
12 17 CFR 240.19b–4(f)(6).
13 17 CFR 240.19b–4(f)(6)(iii).
10 15
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Federal Register / Vol. 73, No. 12 / Thursday, January 17, 2008 / Notices
immediately. The Commission believes
that waiving the 5-day pre-filing notice
requirement and the 30-day operative
delay is consistent with the protection
of investors and the public interest as
the proposed rule change presents no
novel issues. For this reason, the
Commission designates the proposed
rule change as operative upon filing.14
At any time within 60 days of the
filing of such proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in the furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
mstockstill on PROD1PC66 with NOTICES
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–2008–01 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–2008–01. 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
14 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. See
15 U.S.C. 78c(f).
VerDate Aug<31>2005
17:07 Jan 16, 2008
Jkt 214001
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 the filing also will be available
for inspection and copying at the
principal office of 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 SR–CBOE–2008–01 and
should be submitted on or before
February 7, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–708 Filed 1–16–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57131; File No. SR–MSRB–
2007–08]
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Notice of Filing of Proposed
Rule Change to Rule G–8, Books and
Records, Rule G–9, Preservation of
Records, and Rule G–34, CUSIP
Numbers and New Issue
Requirements, To Improve Transaction
Reporting of New Issues
January 11, 2008.
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 November
27, 2007, the Municipal Securities
Rulemaking Board (‘‘MSRB’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’)
the proposed rule change as described
in Items I, II, and III below, which Items
have been substantially prepared by the
MSRB. 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 MSRB is filing with the
Commission a proposed rule change
consisting of an amendment of its Rule
G–8, Books and Records, Rule G–9,
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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3295
Preservation of Records, and Rule G–34,
CUSIP Numbers and New Issue
Requirements. The proposed rule
change is designed to improve
transaction reporting of new issues and
would accelerate the timing for CUSIP
number assignment and, with the
exception of new issues of short-term
instruments with less than nine months
in effective maturity, require
underwriters to:
(i) Submit certain information about a
new issue of municipal securities to
Depository Trust and Clearing
Corporation’s New Issue Information
Dissemination System within set
timeframes; and (ii) set and disseminate
a ‘‘Time of First Execution’’ that allows
time for market participants to access
necessary information in preparation for
trade reporting prior to beginning trade
executions in the issue. The MSRB
proposes an effective date for the
proposed rule change of June 30, 2008.
The text of the proposed rule change is
available on the MSRB’s Web site
(https://www.msrb.org), at the MSRB’s
principal office, 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
MSRB 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 MSRB 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
MSRB Rule G–14, on transaction
reporting, requires all brokers, dealers
and municipal securities dealers
(‘‘dealers’’) to report all transactions in
municipal securities to the MSRB RealTime Transaction Reporting System
(‘‘RTRS’’) within fifteen minutes of the
time of trade execution, with limited
exceptions. One exception listed in Rule
G–14 RTRS Procedures, paragraph (a)(ii)
is a ‘‘three-hour exception’’ that allows
a dealer three hours to report a
transaction in a when, as and if issued
(‘‘when-issued’’) security if all of the
following conditions apply: (i) The
CUSIP number and indicative data of
the issue traded are not in the securities
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]]>Agencies
[Federal Register Volume 73, Number 12 (Thursday, January 17, 2008)]
[Notices]
[Pages 3293-3295]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-708]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57119; File No. CBOE-2008-01]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Relating to Complex Orders
January 9, 2008.
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 January 4, 2008, the Chicago Board Options Exchange, Incorporated
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') a proposed rule change as described in
Items I and II below, which Items have been prepared substantially by
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 the proposal
effective upon receipt of this filing by the Commission. 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).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend CBOE Rule 6.42, Minimum Increments
for Bids and Offers, in order to clarify which option classes overlying
the S&P 500 Index and S&P 100 Index are subject to the requirement that
bids and offers on complex orders,\5\ except for box/roll spreads, be
expressed in decimal increments no smaller than $0.05 and to provide
that the appropriate Exchange Committee may determine to modify the
applicable increment on a class-by-class basis. CBOE also proposes to
amend CBOE Rule 6.53C, Complex Orders on the Hybrid System, to make
certain clarification changes respecting the applicable minimum
increment for complex orders. In addition, CBOE is proposing various
non-substantive, typographical changes to the two rules. The text of
the proposed rule change is available at CBOE, the Commission's Public
Reference Room, and https://www.cboe.com/legal.
---------------------------------------------------------------------------
\5\ A ``complex order'' means a spread, straddle, combination or
ratio order as defined in CBOE Rule 6.53, a stock-option order as
defined in CBOE Rule 1.1(ii), a security future-option order as
defined in CBOE Rule 1.1(zz), or any other complex order as defined
in Rule 6.53C. See CBOE Rule 6.42.01.
---------------------------------------------------------------------------
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
The purpose of this filing is to make various changes to the
Exchange's rules pertaining to complex orders. First, the Exchange is
proposing to amend CBOE Rule 6.42. Rule 6.42 establishes the minimum
trading increments for options traded on the Exchange. Rule
[[Page 3294]]
6.42(1) provides that, subject to Rule 6.42(2), bids and offers shall
be expressed in decimal increments no smaller than $.10 unless a
different increment is approved by the appropriate Exchange committee
for an option contract of a particular series. Rule 6.42(2) provides
that bids and offers for all option series quoted below $3.00 a
contract shall be expressed in decimal increments no smaller than $.05.
Rule 6.42(3) provides that bids and offers for all series of the
options classes participating in the Penny Pilot Program\6\ will be
announced via Regulatory Circular. Rule 6.42(4) provides that bids and
offers on complex orders may be expressed in any increment, and the
legs of a complex order may be executed in one cent increments,
regardless of the minimum increments otherwise appropriate to the
individual legs of the order. Thus, for example, a complex order could
be entered at a net debit or credit price of $1.03 even though the
standard minimum increment for the individual series is generally $0.05
or $0.10. As an exception to this provision, Rule 6.42(4) also provides
that bids and offers on complex orders in options on the S&P 500 Index
or the S&P 100 Index, except for box/roll spreads, shall be expressed
in decimal increments no smaller than $0.05. The Exchange is proposing
the following changes:
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release 55154 (January 23,
2007), 72 FR 4743 (February 1, 2007)(order approving CBOE rule
changes related to the Penny Pilot Program, which permits certain
option classes to be quoted in pennies on a pilot basis).
As currently worded, the text of Rule 6.42(4) simply
refers to the underlying S&P 500 Index and S&P 100 Index, but not to
the particular overlying option classes. Although there may be
various options classes overlying these indexes, the Exchange only
intends for the special increment to apply to certain option
classes. Therefore, the Exchange is proposing to amend the text of
the rule to clarify that the special increments apply only to the
European-Style Exercise S&P 500 Index options class (option symbol
``SPX''), the American-Style S&P 100 Index options class (option
symbol ``OEX''), and the European-Style Exercise S&P 100 Index
options class (option symbol ``XEO'').\7\
To provide more flexibility, the Exchange is proposing
to amend Rule 6.42(4) to provide that the appropriate Exchange
committee may determine on a class-by-class basis whether the
special increment provisions will apply. Specifically, the proposed
rule change would permit the appropriate Exchange committee to
designate the applicable minimum increment for bids and offers on
complex orders in the SPX, OEX or XEO option class as either (i) the
special $0.05 increment or (ii) like other options classes, any
increment. The proposed rule change also makes clear that, like
other complex orders, the legs of SPX, OEX or XEO complex orders may
be executed in $0.01 increments.\8\
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\7\ The Exchange notes that, when the provision respecting these
special increments was originally adopted, it simply applied to
options on the S&P 500 Index and that rule change filing referred to
those options as ``SPX'' options. See Securities Exchange Act
Release No. 45731 (April 11, 2002), 67 FR 19464 (April 19, 2002)(SR-
CBOE-2001-62). The rule change filing that extended the application
of the special increments to options on the S&P 100 Index referred
to those options as ``OEX'' options. See Securities Exchange Act
Release No. 54135 (July 12, 2006), 71 FR 41287 (July 20, 2006)(SR-
CBOE-2005-65). Through the instant rule change, the Exchange is
proposing to clarify that the reference to S&P 100 Index options
should also include XEO options, which only differ from the OEX
options in exercise style. As with OEX options, the Exchange
believes that application of the special increment provisions to XEO
options is appropriate given the complexity of XEO orders and the
size of the underlying S&P 100 Index.
\8\ Two other non-substantive formatting changes are also being
proposed to the text of Rule 6.42 (specifically, the term ``one
cent'' would be replaced with ``$0.01'' and parentheticals (``('')
would be added to the numbering contained in Interpretation and
Policy .02).
Second, the Exchange is proposing to amend CBOE Rule 6.53C. Rule
6.53C contains separate provisions regarding the minimum net price
increment applicable to complex orders that are submitted to the
Exchange's electronic complex order book (``COB'') and the Exchange's
automated complex order RFR auction process (``COA''). The rule
currently provides that the appropriate Exchange committee will
determine on a class-by-class basis whether the minimum net price
increment for complex orders submitted COB or COA, as applicable, will
be (i) a multiple of the minimum increment (i.e., $0.05 or $0.10, as
applicable) or (ii) a $0.01 increment. The Exchange is proposing to
amend these provisions to provide that the minimum net price increment
may be either a (i) multiple of the minimum increment or (ii) a smaller
increment, provided that the increment may not be less than $0.01. This
change is intended to provide additional clarity and flexibility for
determining the applicable minimum net price increment for COB and COA.
For example, the change accommodates the application of a minimum $0.05
net priced increment for COB and COA in the OEX and XEO option classes,
similar to the special $0.05 increment provided under Rule 6.42(4).
Finally, the Exchange is proposing to make various non-substantive
changes to CBOE Rule 6.53C to update references to the applicable
minimum increment (which now includes $0.01 in series participating in
the Penny Pilot Program), delete an outdated reference to interim
procedures regarding the N-second group timer (as described in Rule
6.45A(c)), reorganize and make various non-substantive changes to the
text for clarity, and combine certain duplicative language regarding
the issuance of regulatory circulars.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
section 6(b) of the Act,\9\ in general, and furthers the objectives of
section 6(b)(5) of the Act,\10\ in particular, in that it is designed
to prevent fraudulent and manipulative acts and practices, promote just
and equitable principles of trade, remove impediments to and perfect
the mechanisms of a free and open market and a national market system,
and, in general, 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
No written comments were either solicited or received with respect
to the proposed rule change.
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) thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Commission Rule 19b-4(f)(6)
normally does not become operative prior to thirty days after the date
of filing. The CBOE requests that the Commission waive the 5-day pre-
filing notice requirement as well as the 30-day operative delay, as
specified in Rule 19b-4(f)(6)(iii),\13\ and designate the proposed rule
change operative
[[Page 3295]]
immediately. The Commission believes that waiving the 5-day pre-filing
notice requirement and the 30-day operative delay is consistent with
the protection of investors and the public interest as the proposed
rule change presents no novel issues. For this reason, the Commission
designates the proposed rule change as operative upon filing.\14\
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\13\ 17 CFR 240.19b-4(f)(6)(iii).
\14\ 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. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of such proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in the furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-CBOE-2008-01 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-2008-01. 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 the filing also will be available for
inspection and copying at the principal office of 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 SR-CBOE-2008-01 and should be submitted on
or before February 7, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-708 Filed 1-16-08; 8:45 am]
BILLING CODE 8011-01-P
