Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Permanent Approval of the Customer Portfolio Margin Pilot Program, 45505-45506 [E8-17841]

Download as PDF Federal Register / Vol. 73, No. 151 / Tuesday, August 5, 2008 / Notices including whether the proposed rule is consistent with the requirements of Title I of the Act. Comments may be submitted by any of the following methods: SECURITIES AND EXCHANGE COMMISSION Electronic Comments Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Permanent Approval of the Customer Portfolio Margin Pilot Program dwashington3 on PRODPC61 with NOTICES • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/pcaob.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number PCAOB 2008–01 on the subject line. [Release No. 34–58243; File No. SR–CBOE– 2008–73] [FR Doc. E8–17893 Filed 8–4–08; 8:45 am] 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 2 17 VerDate Aug<31>2005 14:19 Aug 04, 2008 Jkt 214001 PO 00000 Frm 00115 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 July 29, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’ Paper Comments or ‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that • Send paper comments in triplicate on July 8, 2008, Chicago Board Options to Florence Harmon, Acting Secretary, Exchange, Incorporated (‘‘CBOE’’ or the Securities and Exchange Commission, ‘‘Exchange’’) filed with the Securities 100 F Street, NE., Washington, DC and Exchange Commission 20549–1090. (‘‘Commission’’) the proposed rule change as described in Items I, II, and All submissions should refer to File III below, which Items have been Number PCAOB 2008–01. This file substantially prepared by CBOE. CBOE number should be included on the subject line if e-mail is used. To help the has filed the proposal as a ‘‘noncontroversial’’ proposed rule change Commission process and review your pursuant to Section 19(b)(3)(A) of the comments more efficiently, please use 3 4 only one method. The Commission will Act and Rule 19b–4(f)(6) thereunder, which renders the proposed rule change post all comments on the Commission’s effective upon filing with the Internet Web site (https://www.sec.gov/ Commission. The Commission is rules/pcaob/shtml). Copies of the publishing this notice to solicit submission, all subsequent comments on the proposed rule change amendments, all written statements from interested persons. with respect to the proposed rule that I. Self-Regulatory Organization’s are filed with the Commission, and all Statement of the Terms of Substance of written communications relating to the proposed rule between the Commission the Proposed Rule Change and any person, other than those that CBOE proposes to make permanent may be withheld from the public in the customer portfolio margin program accordance with the provisions of 5 codified in Exchange Rules 9.15(c)— Delivery of Current Options Disclosure U.S.C. 552, will be available for Documents, 12.4—Portfolio Margin, inspection and copying in the 13.5—Customer Portfolio Margin Commission’s Public Reference Room, Accounts, and 15.8A—Risk Analysis of on official business days between the Portfolio Margin Accounts. CBOE is not hours of 10 a.m. and 3 p.m. Copies of proposing any textual changes to its such filing will also be available for Constitution or Rules. The text of the inspection and copying at the principal proposed rule change is available on the office of the PCAOB. All comments received will be posted without change; Exchange’s website (https:// www.cboe.org/legal), at the Exchange’s we do not edit personal identifying Office of the Secretary and at the information from submissions. You Commission’s Public Reference Room. should submit only information that you wish to make available publicly. All II. Self-Regulatory Organization’s Statement of the Purpose of, and submissions should refer to File No. Statutory Basis for, the Proposed Rule PCAOB–2008–01 and should be submitted on or before August 26, 2008. Change In its filing with the Commission, By the Commission. CBOE included statements concerning Florence E. Harmon, the purpose of and basis for the Acting Secretary. proposed rule change and discussed any BILLING CODE 8010–01–P 45505 Fmt 4703 Sfmt 4703 The Exchange’s customer portfolio margining program, as previously approved by the Commission, allows broker-dealers, for eligible securities, to compute customer margin requirements based on a portfolio margining methodology.5 The portfolio margining program is operating under a pilot program that is scheduled to expire on July 31, 2008.6 Amendments to the rules effective April 2, 2007, made equities, equity options, narrow-based index options, unlisted derivatives and security futures eligible for portfolio margining.7 The Exchange believes it has had sufficient time to assess the operation of the pilot program and has not encountered any problems or difficulties relating to the pilot program since its inception. For this reason, the Exchange proposes that the Commission approve the pilot program on a permanent basis.8 2. Statutory Basis Because the portfolio margin pilot program has promoted greater reasonableness, accuracy and efficiency with respect to margin requirements and better aligns margin requirements with actual risk, the Exchange believes that this proposed rule change is consistent with Section 6(b) of the Exchange 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 perfect the mechanism of a free and open market, and to protect investors and the public interest. 5 See Exchange Act Release No. 54919 (December 12, 2006), 71 FR 75781 (December 18, 2006) (approving amendments to the program on a pilot basis to expire on July 31, 2007). 6 See Exchange Act Release No. 56109 (July 19, 2007), 72 FR 41365 (July 27, 2007) (extending the pilot program through July 31, 2008). 7 See Exchange Act Release No. 54919, supra note 1. 8 The Exchange understands that FINRA filed a similar proposed rule change that, if approved, would continue to provide a uniform approach with respect to portfolio margining. See (SR–FINRA– 2008–041). 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). E:\FR\FM\05AUN1.SGM 05AUN1 45506 Federal Register / Vol. 73, No. 151 / Tuesday, August 5, 2008 / Notices 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 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 Because the forgoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days after the date of the filing, 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 Rule 19b–4(f)(6) normally may not become operative prior to 30 days after the date of filing. However, Rule 19b– 4(f)(6)(iii) permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange requests that the Commission waive the 30-day operative delay, which would make the change operative upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver will allow the customer portfolio margining program to continue uninterrupted as it would otherwise expire on July 31, 2008.13 Accordingly, the Commission designates the proposed rule change 11 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires a self-regulatory organization to provide the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has fulfilled this requirement. 13 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition and capital formation. See 15 U.S.C. 78c(f). dwashington3 on PRODPC61 with NOTICES 12 17 VerDate Aug<31>2005 14:19 Aug 04, 2008 Jkt 214001 effective upon filing with the Commission. At any time within 60 days of the filing of the 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 furtherance of the purposes of the Act. you wish to make available publicly. All submissions should refer to File Number SR–CBOE–2008–73 and should be submitted on or before August 26, 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 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–2008–73 on the subject line. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Florence E. Harmon, Acting Secretary. [FR Doc. E8–17841 Filed 8–4–08; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58251; File No. SR–FINRA– 2008–041] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating To Making the Portfolio Margin Pilot Permanent July 30, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 Paper Comments (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on July 25, • Send paper comments in triplicate 2008, Financial Industry Regulatory to Secretary, Securities and Exchange Authority, Inc. (‘‘FINRA’’) (f/k/a Commission, 100 F Street, NE., National Association of Securities Washington, DC 20549–1090. Dealers, Inc. (‘‘NASD’’)) filed with the All submissions should refer to File Securities and Exchange Commission Number SR–CBOE–2008–73. This file (‘‘SEC’’ or ‘‘Commission’’) the proposed number should be included on the subject line if e-mail is used. To help the rule change as described in Items I, II, and III below, which Items have been Commission process and review your substantially prepared by FINRA. comments more efficiently, please use only one method. The Commission will FINRA has designated the proposed rule post all comments on the Commission’s change as constituting a ‘‘noncontroversial’’ rule change under Internet Web site (https://www.sec.gov/ paragraph (f)(6) of Rule 19b–4 under the rules/sro.shtml). Copies of the Act,3 which renders the proposal submission, all subsequent effective upon receipt of this filing by amendments, all written statements the Commission. The Commission is with respect to the proposed rule publishing this notice to solicit change that are filed with the comments on the proposed rule change Commission, and all written from interested persons. communications relating to the proposed rule change between the I. Self-Regulatory Organization’s Commission and any person, other than Statement of the Terms of Substance of those that may be withheld from the the Proposed Rule Change public in accordance with the FINRA proposes to make permanent provisions of 5 U.S.C. 552, will be the portfolio margin pilot program set available for inspection and copying in forth in NASD Rule 2520(g) and the Commission’s Public Reference Incorporated NYSE Rule 431(g).4 The Room, 100 F Street, NE., Washington, DC 20549 on official business days 14 17 CFR 200.30–3(a)(12). between the hours of 10 a.m. and 3 p.m. 1 15 U.S.C. 78s(b)(1). Copies of such filing also will be 2 17 CFR 240.19b–4. available for inspection and copying at 3 17 CFR 240.19b–4(f)(6). the principal office of CBOE. All 4 The current FINRA rulebook consists of two sets of rules: (1) NASD Rules and (2) rules incorporated comments received will be posted from NYSE (‘‘Incorporated NYSE Rules’’). While the without change; the Commission does NASD Rules generally apply to all FINRA members, not edit personal identifying the Incorporated NYSE Rules apply only to information from submissions. You members of both FINRA and the NYSE, referred to as Dual Members. should submit only information that PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 E:\FR\FM\05AUN1.SGM 05AUN1

Agencies

[Federal Register Volume 73, Number 151 (Tuesday, August 5, 2008)]
[Notices]
[Pages 45505-45506]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-17841]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58243; File No. SR-CBOE-2008-73]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to Permanent Approval of the Customer Portfolio 
Margin Pilot Program

July 29, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on July 8, 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 
substantially prepared by CBOE. CBOE has filed the proposal as a ``non-
controversial'' proposed rule change pursuant to Section 19(b)(3)(A) of 
the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the 
proposed rule change effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE proposes to make permanent the customer portfolio margin 
program codified in Exchange Rules 9.15(c)--Delivery of Current Options 
Disclosure Documents, 12.4--Portfolio Margin, 13.5--Customer Portfolio 
Margin Accounts, and 15.8A--Risk Analysis of Portfolio Margin Accounts. 
CBOE is not proposing any textual changes to its Constitution or Rules. 
The text of the proposed rule change is available on the Exchange's 
website (https://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 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 Exchange's customer portfolio margining program, as previously 
approved by the Commission, allows broker-dealers, for eligible 
securities, to compute customer margin requirements based on a 
portfolio margining methodology.\5\ The portfolio margining program is 
operating under a pilot program that is scheduled to expire on July 31, 
2008.\6\
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    \5\ See Exchange Act Release No. 54919 (December 12, 2006), 71 
FR 75781 (December 18, 2006) (approving amendments to the program on 
a pilot basis to expire on July 31, 2007).
    \6\ See Exchange Act Release No. 56109 (July 19, 2007), 72 FR 
41365 (July 27, 2007) (extending the pilot program through July 31, 
2008).
---------------------------------------------------------------------------

    Amendments to the rules effective April 2, 2007, made equities, 
equity options, narrow-based index options, unlisted derivatives and 
security futures eligible for portfolio margining.\7\ The Exchange 
believes it has had sufficient time to assess the operation of the 
pilot program and has not encountered any problems or difficulties 
relating to the pilot program since its inception. For this reason, the 
Exchange proposes that the Commission approve the pilot program on a 
permanent basis.\8\
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    \7\ See Exchange Act Release No. 54919, supra note 1.
    \8\ The Exchange understands that FINRA filed a similar proposed 
rule change that, if approved, would continue to provide a uniform 
approach with respect to portfolio margining. See (SR-FINRA-2008-
041).
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2. Statutory Basis
    Because the portfolio margin pilot program has promoted greater 
reasonableness, accuracy and efficiency with respect to margin 
requirements and better aligns margin requirements with actual risk, 
the Exchange believes that this proposed rule change is consistent with 
Section 6(b) of the Exchange 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 perfect the mechanism of a free and open market, and to 
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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[[Page 45506]]

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 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

    Because the forgoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days after the date of the filing, 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). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to provide the Commission 
with written notice of its intent to file the proposed rule change, 
along with a brief description and text of the proposed rule change, 
at least five business days prior to the date of filing of the 
proposed rule change, or such shorter time as designated by the 
Commission. The Exchange has fulfilled this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange requests that the 
Commission waive the 30-day operative delay, which would make the 
change operative upon filing. The Commission believes that waiving the 
30-day operative delay is consistent with the protection of investors 
and the public interest because such waiver will allow the customer 
portfolio margining program to continue uninterrupted as it would 
otherwise expire on July 31, 2008.\13\ Accordingly, the Commission 
designates the proposed rule change effective upon filing with the 
Commission.
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    \13\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the 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 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-2008-73 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2008-73. 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 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 available publicly. All 
submissions should refer to File Number SR-CBOE-2008-73 and should be 
submitted on or before August 26, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-17841 Filed 8-4-08; 8:45 am]
BILLING CODE 8010-01-P
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