Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Approving a Proposed Rule Change To Eliminate a Requirement That a Participant Have a Formal Written Agreement To Use Another Participant's Give-Up, 7621-7622 [E8-2331]

Download as PDF Federal Register / Vol. 73, No. 27 / Friday, February 8, 2008 / Notices pwalker on PROD1PC71 with NOTICES C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others be submitted on or before February 29, 2008. IV. Commission’s Findings and Order Granting Accelerated Approval of the The Exchange neither solicited nor Proposed Rule Change received comments on the proposal. After careful review, the Commission finds that CBOE’s proposal to amend III. Solicitation of Comments Rule 24.9(a)(2), Terms of Index Option Interested persons are invited to Contracts to allow the Exchange to list submit written data, views, and up to seven expiration months for arguments concerning the foregoing, reduced-value and jumbo options that including whether the proposed rule overlie broad-based security indexes for change is consistent with the Act. which full-value options are used by the Comments may be submitted by any of Exchange to calculate a constant threethe following methods: month volatility index is consistent with the requirements of the Act and the Electronic Comments rules and regulations thereunder • Use the Commission’s Internet applicable to a national securities comment form (https://www.sec.gov/ exchange 9 and, in particular, the rules/sro.shtml); or requirements of section 6 of the Act 10 • Send an e-mail to ruleand the rules and regulations comments@sec.gov. Please include File thereunder. The Commission believes Number SR-CBOE–2008–05 on the that increasing, from six to seven, the subject line. number of expiration months for these options (to accomodate a fourth Paper Comments consecutive near-term month while • Send paper comments in triplicate maintaining the listing of three months to Nancy M. Morris, Secretary, on a quarterly expiration cycle) will Securities and Exchange Commission, result in a more consistent and 100 F Street, NE., Washington, DC predictable calculation in which the 20549–1090. option series that bracket three months All submissions should refer to File to expiration will always expire one Number SR-CBOE–2008–05. This file month apart, thereby promoting just and number should be included on the equitable principles of trade while subject line if e-mail is used. To help the protecting investors and the public Commission process and review your interest. comments more efficiently, please use The Commission also notes CBOE’s only one method. The Commission will representations that it possesses the post all comments on the Commission’s necessary systems capacity to handle Internet Web site (https://www.sec.gov/ the additional traffic associated with the rules/sro.shtml). Copies of the additional listing of a seventh contract submission, all subsequent month for reduced-value and jumbo amendments, all written statements options that overlie broad-based with respect to the proposed rule security indexes for which full-value change that are filed with the options are used by the Exchange to Commission, and all written calculate a constant three-month communications relating to the volatility index. proposed rule change between the The Exchange has requested Commission and any person, other than accelerated approval of the proposed rule change. The Commission finds those that may be withheld from the good cause, consistent with Section public in accordance with the 19(b)(2) of the Act,11 for approving this provisions of 5 U.S.C. 552, will be proposed rule change before the available for inspection and copying in thirtieth day after the publication of the Commission’s Public Reference notice thereof in the Federal Register Room, 100 F Street, NE., Washington, because accelerating approval will DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. enable CBOE to harmonize the contract month listings between full-value SPX Copies of such filing also will be options and reduced-value SPX options available for inspection and copying at (i.e., XSP options) by listing a seventh the principal office of CBOE. All expiration month (May 2008) in order to comments received will be posted maintain four consecutive near term without change; the Commission does not edit personal identifying 9 In approving this proposed rule change, the information from submissions. You Commission has considered the proposed rule’s should submit only information that impact on efficiency, competition, and capital you wish to make available publicly. All formation. 15 U.S.C. 78c(f). 10 15 U.S.C. 78f. submissions should refer to File 11 15 U.S.C. 78s(b)(2). Number SR–CBOE–2008–05 and should VerDate Aug<31>2005 17:11 Feb 07, 2008 Jkt 214001 PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 7621 contract months and three quarterly cycle contracts months. The Commission notes that this proposed rule change does not raise any new regulatory issues from those raised in the rule filing which allowed CBOE to list add a seventh expiration month for full-value broad-based security index options.12 V. Conclusion It is therefore ordered, pursuant to section 19(b)(2) of the Act,13 that the proposed rule change (SR–CBOE–2008– 05), as modified by Amendment No. 1, be, and it hereby is approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–2330 Filed 2–7–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57264; File No. SR–CHX– 2007–27] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Approving a Proposed Rule Change To Eliminate a Requirement That a Participant Have a Formal Written Agreement To Use Another Participant’s Give-Up February 4, 2008. On December 12, 2007, the Chicago Stock Exchange, Inc (‘‘CHX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend CHX Article 9, Rule 25 to eliminate the requirement that a participant have a formal written agreement to use another participant’s give-up.3 The proposed rule change was published for comment in the Federal 12 See supra Note 3. U.S.C. 78s(b)(2). 14 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 57036 (December 21, 2007), 72 FR 74381 (December 31, 2007) (‘‘Notice’’) at footnote 3 (defining a ‘‘give-up’’ as a multi-character symbol that identifies a CHX participant firm. In the context of this rule, if a participant executes a trade using another participant’s give-up, the firm is identifying the other firm as a party to the trade and allocating the trade to the other firm’s account for clearing). 13 15 E:\FR\FM\08FEN1.SGM 08FEN1 7622 Federal Register / Vol. 73, No. 27 / Friday, February 8, 2008 / Notices Register on December 31, 2007.4 The Commission received no comments on the proposal. This order approves the proposed rule change, as amended. When the CHX adopted rules for its new trading model, it included a provision that requires a participant that executes a trade using another participant’s give-up to have a written agreement authorizing the use of the give-up.5 Soon after implementing its new trading model, the Exchange contemplated limiting the way in which the rule would apply to its institutional brokers by allowing institutional brokers to use other participants’ give-ups in accordance with reasonable written order-handling procedures, without specifically requiring that a written agreement be in place.6 The Exchange believed that the rule provided an appropriate general standard, but did not intend to require a potentially substantial change in the long-standing business practices of the Exchange’s institutional brokers, who often execute a trade using another participant’s giveup, pursuant to instructions from such participant or its customer.7 The Exchange now proposes to eliminate the ‘‘give-up agreement’’ rule altogether. The Exchange believes the rule sets a good business standard, but does not believe that it is appropriate to put a hard-and-fast rule to that effect in place because of its potential impact on the day-to-day business practices of some of its institutional brokers.8 The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.9 In particular, the Commission finds that the proposal is consistent with section 6(b)(5) of the Act,10 which requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, protect investors and the public interest. Repealing this rule will permit the Exchange’s members to execute trades using another CHX participant’s 4 See id. Securities Exchange Act Release No. 54550 (September 29, 2006), 71 FR 59563 (October 10, 2006) (approval order for the new trading model). 6 See File No. SR–CHX–2006–32. The Exchange withdrew that proposal on December 12, 2007. 7 See Notice, supra note 3, at 74381. 8 See id. 9 In approving this proposed rule change, the Commission notes that it has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 10 15 U.S.C. 78f(b)(5). pwalker on PROD1PC71 with NOTICES 5 See VerDate Aug<31>2005 17:11 Feb 07, 2008 Jkt 214001 give-up pursuant to instructions from either that participant or its customer without requiring that a written agreement first be in place between those participants, thereby providing greater flexibility for members to execute trades on the Exchange. The Commission notes, however, that participants may choose to continue entering into formal written give-up agreements as they consider appropriate. It is therefore ordered, pursuant to section 19(b)(2) of the Act,11 that the proposed rule change (SR–CHX–2007– 27) is approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–2331 Filed 2–7–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57265; File No. SR–Phlx– 2007–68] Self-Regulatory Organizations; Philadelphia Stock Exchange, Inc.; Order Granting Approval to Proposed Rule Change as Modified by Amendment Nos. 1 and 2 Thereto Relating to Customized U.S. DollarSettled Foreign Currency Options February 4, 2008. I. Introduction On September 6, 2007, the Philadelphia Stock Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934, as amended (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change relating to trading of individually tailored U.S. dollar-settled foreign currency options (‘‘FCOs’’). On December 18, 2007, the Exchange filed Amendment No. 1. The proposed rule change, as amended, was published for comment in the Federal Register on December 31, 2007.3 The Commission received no comments on the proposal. On January 29, 2008, the Exchange filed Amendment No. 2.4 This order approves the proposed rule change, as amended. 11 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(l). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 57018 (December 20, 2007), 72 FR 74392 (‘‘Notice’’). 4 See Partial Amendment dated January 29, 2008 (‘‘Amendment No. 2’’). Amendment No. 2 made one 12 17 PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 II. Description of the Proposal Individually tailored index and equity options currently may be traded pursuant to Rule 1079, FLEX Index and Equity Options.5 Phlx proposes to amend Rule 1079 6 to permit trading of U.S. dollar-settled FCOs with individually tailored expiration dates and exercise prices (‘‘FLEX currency options’’).7 Provisions of Rule 1079 that are not limited by their terms to FLEX index or equity options will be equally applicable to FLEX currency options.8 The Options Clearing Corporation (‘‘OCC’’) will be the issuer and guarantor of these new options. A. Characteristics of FLEX Currency Options Pursuant to proposed Rule 1079(a)(3)(C), users will be able to individually tailor the strike prices of FLEX currency options. Strike prices need not be consistent with strike price intervals permissible for non-FLEX U.S. dollar-settled FCOs. The strike price may be specified in terms of a specific dollar amount rounded to the nearest ten thousandth of a dollar (expressed without reference to the first two decimal places) for FLEX currency options other than the Japanese yen currency option. FLEX options on the Japanese yen may be specified in terms of a specific dollar amount rounded to the nearest one millionth of a dollar (expressed without reference to the first four decimal places).9 technical correction to the rule text. This correction is not subject to notice and comment. 5 See Securities Exchange Act Release No. 39549 (January 14, 1998), 63 FR 3601 (January 23, 1998) (adopting SR–Phlx–96–38). The term ‘‘FLEX’’ is a trademark of the Chicago Board Options Exchange, Inc. 6 The Exchange also proposes to amend Floor Procedure Advice F–28, Trading FLEX Index and Equity Options, to make corresponding changes to those being proposed to Rule 1079(b). 7 Currently, a variety of customized physical delivery FCOs are traded on the Exchange pursuant to Rule 1069, Customized Foreign Currency Options. Users currently have the ability with respect to physical delivery FCOs to customize the strike price and quotation method and to choose underlying and base currency combinations from among various Exchange listed currencies, including the U.S. dollar. See Securities Exchange Act Release No. 34925 (November 1, 1994), 59 FR 55720 (November 8, 1994). References in Exchange rules to ‘‘FLEX currency options’’ will apply only to U.S. dollar-settled FCOs and will not include customized physical delivery FCOs that trade pursuant to Phlx Rule 1069. 8 Generally, like FLEX index and equity options, FLEX currency options will be traded in accordance with many existing options rules. Rule 1079 states that to the extent that the provisions of Rule 1079 are inconsistent with other applicable Exchange rules, Rule 1079 takes precedence with respect to FLEX options. 9 FLEX currency options will be margined at the same levels as the Exchange’s non-FLEX U.S. dollar-settled FCOs. See Phlx Rule 722. E:\FR\FM\08FEN1.SGM 08FEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 73, Number 27 (Friday, February 8, 2008)]
[Notices]
[Pages 7621-7622]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-2331]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57264; File No. SR-CHX-2007-27]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Order Approving a Proposed Rule Change To Eliminate a Requirement That 
a Participant Have a Formal Written Agreement To Use Another 
Participant's Give-Up

February 4, 2008.
    On December 12, 2007, the Chicago Stock Exchange, Inc (``CHX'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend CHX Article 9, Rule 25 to eliminate the 
requirement that a participant have a formal written agreement to use 
another participant's give-up.\3\ The proposed rule change was 
published for comment in the Federal

[[Page 7622]]

Register on December 31, 2007.\4\ The Commission received no comments 
on the proposal. This order approves the proposed rule change, as 
amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 57036 (December 21, 
2007), 72 FR 74381 (December 31, 2007) (``Notice'') at footnote 3 
(defining a ``give-up'' as a multi-character symbol that identifies 
a CHX participant firm. In the context of this rule, if a 
participant executes a trade using another participant's give-up, 
the firm is identifying the other firm as a party to the trade and 
allocating the trade to the other firm's account for clearing).
    \4\ See id.
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    When the CHX adopted rules for its new trading model, it included a 
provision that requires a participant that executes a trade using 
another participant's give-up to have a written agreement authorizing 
the use of the give-up.\5\ Soon after implementing its new trading 
model, the Exchange contemplated limiting the way in which the rule 
would apply to its institutional brokers by allowing institutional 
brokers to use other participants' give-ups in accordance with 
reasonable written order-handling procedures, without specifically 
requiring that a written agreement be in place.\6\ The Exchange 
believed that the rule provided an appropriate general standard, but 
did not intend to require a potentially substantial change in the long-
standing business practices of the Exchange's institutional brokers, 
who often execute a trade using another participant's give-up, pursuant 
to instructions from such participant or its customer.\7\
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    \5\ See Securities Exchange Act Release No. 54550 (September 29, 
2006), 71 FR 59563 (October 10, 2006) (approval order for the new 
trading model).
    \6\ See File No. SR-CHX-2006-32. The Exchange withdrew that 
proposal on December 12, 2007.
    \7\ See Notice, supra note 3, at 74381.
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    The Exchange now proposes to eliminate the ``give-up agreement'' 
rule altogether. The Exchange believes the rule sets a good business 
standard, but does not believe that it is appropriate to put a hard-
and-fast rule to that effect in place because of its potential impact 
on the day-to-day business practices of some of its institutional 
brokers.\8\
---------------------------------------------------------------------------

    \8\ See id.
---------------------------------------------------------------------------

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\9\ In 
particular, the Commission finds that the proposal is consistent with 
section 6(b)(5) of the Act,\10\ which requires, among other things, 
that the rules of an exchange be designed to promote just and equitable 
principles of trade, remove impediments to and perfect the mechanism of 
a free and open market and a national market system, and, in general, 
protect investors and the public interest. Repealing this rule will 
permit the Exchange's members to execute trades using another CHX 
participant's give-up pursuant to instructions from either that 
participant or its customer without requiring that a written agreement 
first be in place between those participants, thereby providing greater 
flexibility for members to execute trades on the Exchange. The 
Commission notes, however, that participants may choose to continue 
entering into formal written give-up agreements as they consider 
appropriate.
---------------------------------------------------------------------------

    \9\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78f(b)(5).
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    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-CHX-2007-27) is approved.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-2331 Filed 2-7-08; 8:45 am]
BILLING CODE 8011-01-P

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