Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change Related to Sponsored Users, 30430-30431 [E8-11702]

Download as PDF 30430 Federal Register / Vol. 73, No. 102 / Tuesday, May 27, 2008 / Notices [FR Doc. E8–11724 Filed 5–23–08; 8:45 am] BILLING CODE 7590–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57836; File No. SR–CBOE– 2008–54] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change Related to Sponsored Users May 19, 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 May 12, 2008, Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II and III below, which Items have been prepared substantially by CBOE. 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 6.20A, Sponsored Users, to permit Sponsored User access to all products traded on CBOE. The text of the proposed rule change is available at http://www.cboe.org/Legal, the principal offices of the Exchange, and the Commission’s Public Reference Room. pwalker on PROD1PC71 with NOTICES 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. 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Aug<31>2005 17:22 May 23, 2008 Jkt 214001 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose CBOE is proposing to amend CBOE Rule 6.20A, Sponsored Users, which governs electronic access for the entry and execution of orders by Sponsored Users with authorized access and the applicable requirements that Sponsored Users and Sponsoring Members are required to satisfy in order to engage in a Sponsoring Member/Sponsored User relationship. Under the current Rule, the Sponsored User program is only applicable to CBOE’s FLEX Hybrid Trading System (‘‘FLEX’’) and the CBOE Stock Exchange (‘‘CBSX’’) facility. Thus, currently a ‘‘Sponsored User’’ is defined as a person or entity that has entered into a sponsorship arrangement with a Sponsoring Member for purposes of receiving electronic access to FLEX and CBSX. CBOE is proposing to expand the rule to permit electronic access for the entry and execution of orders by Sponsored Users with authorized access to all other products traded on CBOE. CBOE Rule 6.20A will apply to Sponsored Users with authorized access to all other products traded on CBOE in the same manner as it is currently applied to Sponsored Users with authorized access to FLEX and CBSX. Sponsored User access to CBOE will also be conditioned on the same requirements that are currently applied to Sponsored Users on FLEX and CBSX. Unlike the number of Sponsored Users for FLEX and CBSX, which can be unlimited, with respect to all other products trading on CBOE, this filing proposes that the number of Sponsored Users with such electronic access to CBOE be limited to a total of 15 persons/entities 3 (hereinafter referred to as ‘‘Sponsored User Slots’’). Sponsored User applications for the CBOE Sponsored User Slots shall be submitted to the Exchange’s Membership Department and will be processed in the order they are received on a time-stamped basis. Sponsored User applications may be submitted by hand-delivery, e-mail, or facsimile. For applications received via e-mail or facsimile, the time-stamp will be the 3 For purposes of CBOE Rule 6.20A, a ‘‘Sponsored User’’ would now be defined as a person or entity that has entered into a sponsorship arrangement with a Sponsoring Member for purposes of receiving electronic access to the facilities and products specified in the Rule (referred to as the ‘‘Exchange System(s’’)), which would now include the products traded on the FLEX Hybrid Trading System, CBOE and CBSX. See proposed changes to Rule 6.20A(a) and proposed Interpretation and Policy .01 to Rule 6.20A. PO 00000 Frm 00056 Fmt 4703 Sfmt 4703 time the e-mail/facsimile is received by the Membership Department. If there are more applicants than Sponsored User Slots, the Exchange will maintain a waitlist and use a First In, First Out (‘‘FIFO’’) method for filling the Sponsored User Slots. In the event a Sponsored User application is determined by the Membership Department to be incomplete,4 the application will not be considered to have been submitted under the FIFO method until a completed application is submitted. The Exchange will issue a circular providing notice as to when the Exchange will begin accepting applications for the 15 Sponsored User Slots and will detail how the applications may be submitted to the Exchange’s Membership Department. Lastly, the Exchange notes that persons (or entities) aggrieved in an economic sense by Exchange actions, including actions taken with respect to the Sponsored User Slots, may apply for an opportunity to be heard and have the complained-of action reviewed in accordance with Chapter XIX, Hearings and Review. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Act 5 in general and furthers the objectives of Section 6(b)(5) 6 in particular in that the proposal is designed to 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 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 Written comments were neither solicited nor received. 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) 4 For example, an application would be considered incomplete if a Sponsoring Member has not agreed to sponsor the Sponsored User applicant’s electronic access to CBOE. 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(5). E:\FR\FM\27MYN1.SGM 27MYN1 Federal Register / Vol. 73, No. 102 / Tuesday, May 27, 2008 / Notices 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. should submit only information that you wish to make publicly available. All submissions should refer to File Number SR–CBOE–2008–54 and should be submitted on or before June 17, 2008. 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: BILLING CODE 8010–01–P pwalker on PROD1PC71 with NOTICES Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2008–54 on the subject line. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–11702 Filed 5–23–08; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57837; File No. SR–CBOE– 2008–46] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related To the Hybrid Agency Liaison May 20, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 Paper Comments notice is hereby given that on May 15, • Send paper comments in triplicate 2008, the Chicago Board Options to Nancy M. Morris, Secretary, Exchange, Incorporated (‘‘CBOE’’ or Securities and Exchange Commission, ‘‘Exchange’’) filed with the Securities Station Place, 100 F Street, NE., and Exchange Commission Washington, DC 20549–1090. (‘‘Commission’’) the proposed rule All submissions should refer to File change as described in Items I, II, and Number SR–CBOE–2008–54. This file III below, which Items have been number should be included on the subject line if e-mail is used. To help the substantially prepared by CBOE. The Exchange filed the proposal as a ‘‘nonCommission process and review your controversial’’ proposed rule change comments more efficiently, please use only one method. The Commission will pursuant to Section 19(b)(3)(A)(iii) of 3 post all comments on the Commission’s the Act and Rule 19b–4(f)(6) thereunder,4 which renders the proposal Internet Web site (http://www.sec.gov/ effective upon filing with the rules/sro.shtml). Copies of the Commission. The Commission is submission, all subsequent publishing this notice to solicit amendments, all written statements comments on the proposed rule change with respect to the proposed rule from interested persons. change that are filed with the Commission, and all written I. Self-Regulatory Organization’s communications relating to the Statement of the Terms of Substance of proposed rule change between the the Proposed Rule Change Commission and any person, other than The Exchange proposes to modify those that may be withheld from the Rule 6.14, Hybrid Agency Liaison public in accordance with the (‘‘HAL’’), so that the Exchange may provisions of 5 U.S.C. 552, will be determine on a class-by-class basis to available for inspection and copying in permit electronic exposure of HAL the Commission’s Public Reference orders to all CBOE members to give Room, 100 F Street, NE., Washington, additional opportunities to provide the DC 20549, on official business days orders with the best price. The text of between the hours of 10 a.m. and 3 p.m. the proposed rule change is available on Copies of such filing also will be the Exchange’s Web site (http:// available for inspection and copying at the principal office of CBOE. All 7 17 CFR 200.30–3(a)(12). comments received will be posted 1 15 U.S.C. 78s(b)(1). without change; the Commission does 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). not edit personal identifying 4 17 CFR 240.19b–4(f)(6). information from submissions. You VerDate Aug<31>2005 17:22 May 23, 2008 Jkt 214001 PO 00000 Frm 00057 Fmt 4703 Sfmt 4703 30431 www.cboe.org/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 those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose In classes where HAL is activated, HAL automatically upon receipt processes market and limit orders if: (i) The market orders or limit orders are marketable against the Exchange’s disseminated quotation while that quotation is not at the national best bid or offer (‘‘NBBO’’); (ii) the limit orders would improve the Exchange’s disseminated quotation and are marketable against quotations disseminated by other exchanges participating in the Intermarket Options Linkage (‘‘Linkage’’); and (iii) for Hybrid 3.0 classes, the limit orders would improve the Exchange’s disseminated quotation, except when the disseminated quotation is represented by a manual quote, in which case the limit order will automatically route to the electronic book instead of being processed by HAL, and the manual quote will be cancelled.5 When these circumstances occur, orders that are received by HAL are immediately upon receipt electronically exposed to all Market-Makers appointed to the relevant option class, as well as all members acting as agent for orders at the top of the Exchange’s book (‘‘Qualifying Members’’) in the relevant series.6 At the conclusion of the HAL process: 5 See Rule 6.14(a). orders are exposed for a period determined by the Exchange on a class-by-class basis, which period shall not exceed 1.5 seconds. If a MarketMaker or Qualifying Member (on behalf of the order it is representing) commits to trade with any portion of the order during the exposure period, then the exposure period will end, and an allocation period will begin. The allocation period 6 The E:\FR\FM\27MYN1.SGM Continued 27MYN1

Agencies

[Federal Register Volume 73, Number 102 (Tuesday, May 27, 2008)]
[Notices]
[Pages 30430-30431]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-11702]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57836; File No. SR-CBOE-2008-54]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing of a Proposed Rule Change Related to 
Sponsored Users

May 19, 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 May 12, 2008, Chicago Board Options Exchange, Incorporated (``CBOE'' 
or the ``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II 
and III below, which Items have been prepared substantially by CBOE. 
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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend CBOE Rule 6.20A, Sponsored Users, to 
permit Sponsored User access to all products traded on CBOE. The text 
of the proposed rule change is available at http://www.cboe.org/Legal, 
the principal offices of the Exchange, and 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 is proposing to amend CBOE Rule 6.20A, Sponsored Users, which 
governs electronic access for the entry and execution of orders by 
Sponsored Users with authorized access and the applicable requirements 
that Sponsored Users and Sponsoring Members are required to satisfy in 
order to engage in a Sponsoring Member/Sponsored User relationship. 
Under the current Rule, the Sponsored User program is only applicable 
to CBOE's FLEX Hybrid Trading System (``FLEX'') and the CBOE Stock 
Exchange (``CBSX'') facility. Thus, currently a ``Sponsored User'' is 
defined as a person or entity that has entered into a sponsorship 
arrangement with a Sponsoring Member for purposes of receiving 
electronic access to FLEX and CBSX. CBOE is proposing to expand the 
rule to permit electronic access for the entry and execution of orders 
by Sponsored Users with authorized access to all other products traded 
on CBOE.
    CBOE Rule 6.20A will apply to Sponsored Users with authorized 
access to all other products traded on CBOE in the same manner as it is 
currently applied to Sponsored Users with authorized access to FLEX and 
CBSX. Sponsored User access to CBOE will also be conditioned on the 
same requirements that are currently applied to Sponsored Users on FLEX 
and CBSX. Unlike the number of Sponsored Users for FLEX and CBSX, which 
can be unlimited, with respect to all other products trading on CBOE, 
this filing proposes that the number of Sponsored Users with such 
electronic access to CBOE be limited to a total of 15 persons/entities 
\3\ (hereinafter referred to as ``Sponsored User Slots'').
---------------------------------------------------------------------------

    \3\ For purposes of CBOE Rule 6.20A, a ``Sponsored User'' would 
now be defined as a person or entity that has entered into a 
sponsorship arrangement with a Sponsoring Member for purposes of 
receiving electronic access to the facilities and products specified 
in the Rule (referred to as the ``Exchange System(s'')), which would 
now include the products traded on the FLEX Hybrid Trading System, 
CBOE and CBSX. See proposed changes to Rule 6.20A(a) and proposed 
Interpretation and Policy .01 to Rule 6.20A.
---------------------------------------------------------------------------

    Sponsored User applications for the CBOE Sponsored User Slots shall 
be submitted to the Exchange's Membership Department and will be 
processed in the order they are received on a time-stamped basis. 
Sponsored User applications may be submitted by hand-delivery, e-mail, 
or facsimile. For applications received via e-mail or facsimile, the 
time-stamp will be the time the e-mail/facsimile is received by the 
Membership Department. If there are more applicants than Sponsored User 
Slots, the Exchange will maintain a waitlist and use a First In, First 
Out (``FIFO'') method for filling the Sponsored User Slots. In the 
event a Sponsored User application is determined by the Membership 
Department to be incomplete,\4\ the application will not be considered 
to have been submitted under the FIFO method until a completed 
application is submitted. The Exchange will issue a circular providing 
notice as to when the Exchange will begin accepting applications for 
the 15 Sponsored User Slots and will detail how the applications may be 
submitted to the Exchange's Membership Department. Lastly, the Exchange 
notes that persons (or entities) aggrieved in an economic sense by 
Exchange actions, including actions taken with respect to the Sponsored 
User Slots, may apply for an opportunity to be heard and have the 
complained-of action reviewed in accordance with Chapter XIX, Hearings 
and Review.
---------------------------------------------------------------------------

    \4\ For example, an application would be considered incomplete 
if a Sponsoring Member has not agreed to sponsor the Sponsored User 
applicant's electronic access to CBOE.
---------------------------------------------------------------------------

2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the Act 
\5\ in general and furthers the objectives of Section 6(b)(5) \6\ in 
particular in that the proposal is designed to 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.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

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

    Written comments were neither solicited nor received.

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)

[[Page 30431]]

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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2008-54 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-CBOE-2008-54. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of 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 publicly available. All 
submissions should refer to File Number SR-CBOE-2008-54 and should be 
submitted on or before June 17, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-11702 Filed 5-23-08; 8:45 am]
BILLING CODE 8010-01-P