Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of Amendment No. 2 and Order Granting Accelerated Approval to Proposed Rule Change, as Modified by Amendment No. 2, Establishing a Voluntary Professional Designation, 47988-47990 [E8-18895]

Download as PDF 47988 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices 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. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Acting Secretary. [FR Doc. E8–18894 Filed 8–14–08; 8:45 am] 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 mstockstill on PROD1PC66 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–2008–82 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR-CBOE–2008–82. 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 the Exchange. 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–2008–82 and should be submitted on or before September 5, 2008. VerDate Aug<31>2005 19:03 Aug 14, 2008 Jkt 214001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58327; File No. SR–CBOE– 2008–09] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of Amendment No. 2 and Order Granting Accelerated Approval to Proposed Rule Change, as Modified by Amendment No. 2, Establishing a Voluntary Professional Designation August 7, 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 18, 2008, the Chicago Board Options Exchange, Incorporated (‘‘Exchange’’ or ‘‘CBOE’’) 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 the Exchange. The proposed rule change was published for comment in the Federal Register on February 1, 2008.3 On February 15, 2008, the Commission received a comment letter on the proposal.4 On July 8, 2008, the Exchange filed Amendment No. 2 to the proposal.5 The Commission is publishing this notice to solicit comments on the proposed rule change, as modified by Amendment No. 2, from interested persons. For the reasons discussed below, the Commission is granting accelerated approval of the proposed rule change as modified. 12 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 57256 (February 1, 2008), 73 FR 7338 (February 7, 2008). 4 See letter from Andrea Schneider to Florence E. Harmon, Acting Secretary, Commission, dated February 15, 2008 (‘‘Schneider Letter’’). 5 According to the Exchange, the purpose of Amendment No. 2 is to add a more complete list of Exchange rules for which the Voluntary Professional designation would apply, and to provide that the Voluntary Professional designation would not be available in Hybrid 3.0 classes. The Commission received notice of the withdrawal of Amendment No. 1 on July 2, 2008. 1 15 PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to adopt a ‘‘Voluntary Professional’’ designation. The text of the proposed rule change is available on the Exchange’s Web site (http://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 III 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to allow nonbroker-dealer customers to voluntarily have their orders categorized as brokerdealer orders for order handling, order execution, and cancel fee calculation purposes. Specifically, these orders would be treated as broker-dealer orders for purposes of Rules 6.2A (Rapid Opening System); 6.2B (Hybrid Opening System); 6.9 (Solicited Transactions); 6.13A (Simple Auction Liaison); 6.45 (Priority of Bids and Offers—Allocation of Trades); 6.13B (Penny Price Improvement); 6.45A (Priority and Allocation of Equity Option Trades on the CBOE Hybrid System) (except that Voluntary Professional orders may be considered public customer orders, and therefore not be subject to the exposure requirements for solicited broker-dealer orders, under Interpretation and Policy.02); 6.45B (Priority and Allocation of Trades in Index Options and Options on ETFs on the CBOE Hybrid System) (except that Voluntary Professional orders may be considered public customer orders, and therefore not be subject to the exposure requirements for solicited broker-dealer orders, under Interpretation and Policy.02); 6.53C(c)(ii) and (d)(v) and 6.53C.06(b)–(c) (Complex Orders on the Hybrid System); 6.74 (Crossing Orders) (except that Voluntary Professional orders may be considered public E:\FR\FM\15AUN1.SGM 15AUN1 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices mstockstill on PROD1PC66 with NOTICES customer orders subject to facilitation under paragraphs (b) and (d)); 6.74A (Automated Improvement Mechanism) (except that Voluntary Professional orders may be considered customer Agency Orders or solicited orders eligible for customer-to-customer immediate crosses under Interpretation and Policy.09); 6.74B (Solicitation Auction Mechanism); 8.13 (Preferred Market-Maker Program); 8.15B (Participation Entitlement of LMMs); 8.87 (Participation Entitlement of DPMs and e-DPMs); 24.19 (Multi-Class BroadBased Index Option Spread Orders); 43.1 (Matching Algorithm/Priority); 44.4 (Obligations of SBT Market-Makers); and 44.14 (SBT DPM Obligations). Lastly, the Voluntary Professional designation would not be available in Hybrid 3.0 classes. Some Exchange users have requested the flexibility to voluntarily designate their orders as broker-dealer orders because it is more suitable to their trading strategies, which involve highvolume order submission and cancellation. Except as noted above, the orders of these Voluntary Professionals would participate in trades on the same terms as broker-dealer orders for purposes of the rules set forth above. Orders from Voluntary Professionals would continue to be treated as public customer orders for purposes of the linkage-related rules. With respect to linkage-related rules, CBOE states that it would provide the same away-market protection for orders from Voluntary Professionals as for orders from public customers. In addition, orders from Voluntary Professionals that are cancelled would not be counted as public customer order cancellations in connection with the cancellation fee charged to clearing members. It is expected that member firms seeking to facilitate customer use of this new designation would mark these orders with a new origin code to be provided by the Exchange. The Exchange intends to establish, in a separate rule filing under Section 19(b) of the Act, a transaction fee applicable to Voluntary Professionals and the Exchange would not commence the Voluntary Professional program until such fee was in place. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act in general and furthers the objectives of Section 6(b)(5) of the Act 6 in particular in that it is designed to promote just and equitable principles of trade, serve to remove 6 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 19:03 Aug 14, 2008 Jkt 214001 impediments to and perfect the mechanism of a free and open market and a national market system, and protect investors and the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition 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 The Exchange did not solicit or receive written comments with respect to the proposed rule change. 47989 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 the CBOE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CBOE–2008–09 and should be submitted on or before September 5, 2008. IV. Commission Findings and Order Granting Accelerated Approval of Proposed Rule Change The Commission finds that the proposed rule change is consistent with the requirements of the Act and the III. Solicitation of Comments rules and regulations thereunder Interested persons are invited to applicable to a national securities submit written data, views, and exchange and, in particular, the arguments concerning the foregoing, requirements of Section 6(b)(5) of the including whether the proposed rule Act, which requires that the rules of a change is consistent with the Act. national securities exchange, among other things, be designed to promote Comments may be submitted by any of just and equitable principles of trade, to the following methods: remove impediments to and perfect the Electronic Comments mechanism of a free and open market • Use the Commission’s Internet and a national market system, and, in comment form (http://www.sec.gov/ general, to protect investors and the rules/sro.shtml); or public interest; and not be designed to • Send an e-mail to rulepermit unfair discrimination between comments@sec.gov. Please include File customers, issuers, brokers, or dealers.7 Number SR–CBOE–2008–09 on the The Commission notes that it recently subject line. approved a substantially similar proposal by the International Securities Paper Comments Exchange, LLC (‘‘ISE’’) to create a • Send paper comments in triplicate Voluntary Professional category.8 The to Secretary, Securities and Exchange grounds upon which the Commission Commission, 100 F Street, NE., based its approval of the ISE proposal Washington, DC 20549–1090. apply equally to the CBOE proposal. All submissions should refer to File Under the proposed rule change, a Number SR–CBOE–2008–09. This file public customer could elect to be number should be included on the designated as a Voluntary Professional. subject line if e-mail is used. To help the One of the consequences of electing this Commission process and review your designation is that a customer’s orders comments more efficiently, please use no longer would be subject to CBOE’s only one method. The Commission will cancellation fees. Thus, choosing to post all comments on the Commission’s become a Voluntary Professional could Internet Web site (http://www.sec.gov/ represent significant savings for a public rules/sro.shtml). Copies of the customer whose trading strategy submission, all subsequent involves placing, and then cancelling, amendments, all written statements orders frequently. with respect to the proposed rule By electing to become a Voluntary change that are filed with the Professional, a public customer would Commission, and all written also cede priority rights normally communications relating to the granted to public customer orders. proposed rule change between the Importantly, however, this result is Commission and any person, other than determined solely by the choice of the those that may be withheld from the 7 In approving this proposed rule change the public in accordance with the Commission has considered the proposed rule’s provisions of 5 U.S.C. 552, will be impact on efficiency, competition, and capital available for inspection and copying in formation. See 15 U.S.C. 78c(f). the Commission’s Public Reference 8 See Securities Exchange Act Release No. 57553 Room, 100 F Street, NE., Washington, (March 25, 2008), 73 FR 16916 (March 31, 2008) (SR–ISE–2007–76). DC 20549, on official business days PO 00000 Frm 00114 Fmt 4703 Sfmt 4703 E:\FR\FM\15AUN1.SGM 15AUN1 47990 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices customer, and may be rescinded at a customer’s election. The commenter questioned how the proposed rule change would benefit public customers.9 The commenter maintained that if CBOE is willing to forgive its cancellation fees, ‘‘then * * * there was never a problem with cancels from public customers but only [the Exchange] trying to concentrate power and punish the public customer.’’ The Commission is not today considering CBOE’s cancellation fee.10 Instead, the Commission is approving a proposed rule change that would give public customers more flexibility in how they participate in CBOE’s marketplace. In sum, the Commission believes that the proposed rule change would provide an additional choice to public customers. The Commission finds good cause for approving the proposed rule change prior to the thirtieth day after the date of publication of notice of filing thereof in the Federal Register. The Commission believes that accelerated approval of the Exchange’s proposal relating to Voluntary Professionals is appropriate because it is similar to an ISE rule that recently was approved by the Commission.11 The Commission believes that CBOE’s proposal does not raise any new issues that were not considered by the Commission in connection with the ISE proposal. It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (SR–CBOE–2008– 09), as modified by Amendment No. 2, be, and hereby is, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Acting Secretary. [FR Doc. E8–18895 Filed 8–14–08; 8:45 am] mstockstill on PROD1PC66 with NOTICES BILLING CODE 8010–01–P Schneider Letter, supra note 4. Securities Exchange Act Release No. 44607 (July 27, 2001), 66 FR 40757 (August 3, 2001) (SR– CBOE–2001–40) (establishing the CBOE Order Routing System cancellation fee). 11 See supra note 8. 12 17 CFR 200.30–3(a)(12). 10 See 19:03 Aug 14, 2008 [Release No. 34–58331; File No. SR–FINRA– 2008–016] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving a Proposed Rule Change To Align the Reporting Requirements and Dissemination Protocols for OTC Equity Transactions Involving Foreign Securities With All Other OTC Equity Securities August 8, 2008. I. Introduction On April 25, 2008, the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) (f/k/a National Association of Securities Dealers, Inc. (‘‘NASD’’)) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 a proposal: (1) To amend NASD Rule 6620 to align the reporting requirements for over-the-counter (‘‘OTC’’) equity transactions involving foreign securities with the reporting requirements for other OTC equity transactions; and (2) to align the dissemination protocols for all last sale reports of OTC equity transactions. On June 12, 2008, FINRA submitted Amendment No. 1 to the proposed rule change. The proposal was published for comment in the Federal Register on June 26, 2008.3 The Commission received five comments regarding the proposal.4 This order approves the proposed rule change, as modified by Amendment No. 1. II. Description of the Proposed Rule Change Currently, NASD rules require that transactions in OTC Equity Securities (which term encompasses domestic 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 57986 (June 18, 2008), 73 FR 36363 (‘‘Notice’’). 4 See letters from Verdun Edgtton, Vice President and Corporate Governance Officer, The Bank of New York Mellon, to Secretary, Commission, dated July 17, 2008 (‘‘BNYMellon Letter’’); Sam Guidetti, Director of Compliance, Hill, Thompson, Magid & Co., to Florence E. Harmon, Acting Secretary, Commission, dated July 15, 2008 (‘‘Hill Thompson Letter’’); Peter Coolidge, Portfolio Manager, Deltec Special Situations Partners, L.P., to Secretary, Commission, dated July 9, 2008 (‘‘Deltec Letter’’); R. Cromwell Coulson, Chief Executive Officer, Pink OTC Markets, to Secretary, Commission, dated July 7, 2008 (‘‘Pink OTC Markets Letter’’); and Robert Arancio, President, and Kimberly Unger, Executive Director, The Security Traders Association of New York, to Secretary, Commission, dated June 27, 2008 (‘‘STANY Letter’’). 2 17 9 See VerDate Aug<31>2005 SECURITIES AND EXCHANGE COMMISSION Jkt 214001 PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 equity securities, American Depositary Receipts (‘‘ADRs’’), and Canadian issues) that are executed between 8 a.m. and 8 p.m. Eastern Time be reported to the OTC Reporting Facility within 90 seconds of execution.5 Thus, transactions in all ADRs and Canadian issues, including those that are not registered with the Commission and thus are not subject to the Commission’s reporting requirements, are subject to 90-second reporting under NASD Rule 6620. Transactions in all other foreign equity securities are excluded from the 90-second reporting requirement and instead must be reported by 1:30 p.m. Eastern Time the day after the transaction is executed.6 Last sale information for transactions in domestic OTC Equity Securities reported pursuant to Rule 6620 is disseminated on a real-time basis, irrespective of whether the security is registered with the Commission. However, there is no uniformity regarding the dissemination of last sale information for transactions in ADRs and foreign securities. Last sale reports of ADRs and Canadian issues that are quoted on the OTC Bulletin Board (‘‘OTCBB’’), which has an eligibility requirement that OTCBB issuers must be reporting issuers,7 are disseminated on a real-time basis. However, only summary information is disseminated at the end of each trading day for OTC ADRs and Canadian issues that are not quoted on the OTCBB, whether or not they are registered with the Commission. Transactions in foreign securities, other than Canadian issues and ADRs, that are quoted on the OTCBB are disseminated on a real-time basis if they are received on the day of the trade. However, as noted above, there is no current requirement to report these trades to FINRA within 90 seconds of execution, or even on the trade date. If an OTC transaction in a foreign security is not reported on the trade date, last sale information for that transaction is not disseminated. FINRA now proposes: (1) To require all transactions in OTC Equity Securities to be reported within 90 seconds of execution; and (2) to 5 See NASD Rule 6620(a). For purposes of the NASD Rule 6600 Series, ‘‘OTC Equity Securities’’ means equity securities for which real-time trade reporting is not otherwise required. See NASD Rule 6600. NASD Rule 6610(d) further defines ‘‘OTC Equity Security’’ as ‘‘any non-exchange-listed security and certain exchange-listed securities that do not otherwise qualify for real-time trade reporting.’’ 6 See NASD Rule 6620(a)(3)(C)(iii). Although not required, a member may choose to report transactions in foreign securities within 90 seconds of execution. See NASD Rule 6620 n.1. 7 See NASD Rule 6530(b)(1). E:\FR\FM\15AUN1.SGM 15AUN1

Agencies

[Federal Register Volume 73, Number 159 (Friday, August 15, 2008)]
[Notices]
[Pages 47988-47990]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-18895]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58327; File No. SR-CBOE-2008-09]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing of Amendment No. 2 and Order Granting 
Accelerated Approval to Proposed Rule Change, as Modified by Amendment 
No. 2, Establishing a Voluntary Professional Designation

August 7, 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 18, 2008, the Chicago Board Options Exchange, Incorporated 
(``Exchange'' or ``CBOE'') 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 
the Exchange. The proposed rule change was published for comment in the 
Federal Register on February 1, 2008.\3\ On February 15, 2008, the 
Commission received a comment letter on the proposal.\4\ On July 8, 
2008, the Exchange filed Amendment No. 2 to the proposal.\5\ The 
Commission is publishing this notice to solicit comments on the 
proposed rule change, as modified by Amendment No. 2, from interested 
persons. For the reasons discussed below, the Commission is granting 
accelerated approval of the proposed rule change as modified.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 57256 (February 1, 
2008), 73 FR 7338 (February 7, 2008).
    \4\ See letter from Andrea Schneider to Florence E. Harmon, 
Acting Secretary, Commission, dated February 15, 2008 (``Schneider 
Letter'').
    \5\ According to the Exchange, the purpose of Amendment No. 2 is 
to add a more complete list of Exchange rules for which the 
Voluntary Professional designation would apply, and to provide that 
the Voluntary Professional designation would not be available in 
Hybrid 3.0 classes. The Commission received notice of the withdrawal 
of Amendment No. 1 on July 2, 2008.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to adopt a ``Voluntary Professional'' 
designation. The text of the proposed rule change is available on the 
Exchange's Web site (http://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 III 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to allow non-broker-dealer customers to 
voluntarily have their orders categorized as broker-dealer orders for 
order handling, order execution, and cancel fee calculation purposes. 
Specifically, these orders would be treated as broker-dealer orders for 
purposes of Rules 6.2A (Rapid Opening System); 6.2B (Hybrid Opening 
System); 6.9 (Solicited Transactions); 6.13A (Simple Auction Liaison); 
6.45 (Priority of Bids and Offers--Allocation of Trades); 6.13B (Penny 
Price Improvement); 6.45A (Priority and Allocation of Equity Option 
Trades on the CBOE Hybrid System) (except that Voluntary Professional 
orders may be considered public customer orders, and therefore not be 
subject to the exposure requirements for solicited broker-dealer 
orders, under Interpretation and Policy.02); 6.45B (Priority and 
Allocation of Trades in Index Options and Options on ETFs on the CBOE 
Hybrid System) (except that Voluntary Professional orders may be 
considered public customer orders, and therefore not be subject to the 
exposure requirements for solicited broker-dealer orders, under 
Interpretation and Policy.02); 6.53C(c)(ii) and (d)(v) and 6.53C.06(b)-
(c) (Complex Orders on the Hybrid System); 6.74 (Crossing Orders) 
(except that Voluntary Professional orders may be considered public

[[Page 47989]]

customer orders subject to facilitation under paragraphs (b) and (d)); 
6.74A (Automated Improvement Mechanism) (except that Voluntary 
Professional orders may be considered customer Agency Orders or 
solicited orders eligible for customer-to-customer immediate crosses 
under Interpretation and Policy.09); 6.74B (Solicitation Auction 
Mechanism); 8.13 (Preferred Market-Maker Program); 8.15B (Participation 
Entitlement of LMMs); 8.87 (Participation Entitlement of DPMs and e-
DPMs); 24.19 (Multi-Class Broad-Based Index Option Spread Orders); 43.1 
(Matching Algorithm/Priority); 44.4 (Obligations of SBT Market-Makers); 
and 44.14 (SBT DPM Obligations). Lastly, the Voluntary Professional 
designation would not be available in Hybrid 3.0 classes.
    Some Exchange users have requested the flexibility to voluntarily 
designate their orders as broker-dealer orders because it is more 
suitable to their trading strategies, which involve high-volume order 
submission and cancellation. Except as noted above, the orders of these 
Voluntary Professionals would participate in trades on the same terms 
as broker-dealer orders for purposes of the rules set forth above. 
Orders from Voluntary Professionals would continue to be treated as 
public customer orders for purposes of the linkage-related rules.
    With respect to linkage-related rules, CBOE states that it would 
provide the same away-market protection for orders from Voluntary 
Professionals as for orders from public customers. In addition, orders 
from Voluntary Professionals that are cancelled would not be counted as 
public customer order cancellations in connection with the cancellation 
fee charged to clearing members. It is expected that member firms 
seeking to facilitate customer use of this new designation would mark 
these orders with a new origin code to be provided by the Exchange. The 
Exchange intends to establish, in a separate rule filing under Section 
19(b) of the Act, a transaction fee applicable to Voluntary 
Professionals and the Exchange would not commence the Voluntary 
Professional program until such fee was in place.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act in general and furthers the objectives of 
Section 6(b)(5) of the Act \6\ in particular in that it is designed to 
promote just and equitable principles of trade, serve to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and protect investors and the public 
interest.
---------------------------------------------------------------------------

    \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

    The Exchange did not solicit or receive written comments with 
respect to the proposed rule change.

III. 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-2008-09 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-2008-09. 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 the filing also will be available for 
inspection and copying at the principal office of the CBOE. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-CBOE-2008-09 and should be 
submitted on or before September 5, 2008.

IV. Commission Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    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 and, in 
particular, the requirements of Section 6(b)(5) of the Act, which 
requires that the rules of a national securities exchange, among other 
things, be designed to promote just and equitable principles of trade, 
to remove impediments to and perfect the mechanism of a free and open 
market and a national market system, and, in general, to protect 
investors and the public interest; and not be designed to permit unfair 
discrimination between customers, issuers, brokers, or dealers.\7\ The 
Commission notes that it recently approved a substantially similar 
proposal by the International Securities Exchange, LLC (``ISE'') to 
create a Voluntary Professional category.\8\ The grounds upon which the 
Commission based its approval of the ISE proposal apply equally to the 
CBOE proposal.
---------------------------------------------------------------------------

    \7\ In approving this proposed rule change the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \8\ See Securities Exchange Act Release No. 57553 (March 25, 
2008), 73 FR 16916 (March 31, 2008) (SR-ISE-2007-76).
---------------------------------------------------------------------------

    Under the proposed rule change, a public customer could elect to be 
designated as a Voluntary Professional. One of the consequences of 
electing this designation is that a customer's orders no longer would 
be subject to CBOE's cancellation fees. Thus, choosing to become a 
Voluntary Professional could represent significant savings for a public 
customer whose trading strategy involves placing, and then cancelling, 
orders frequently.
    By electing to become a Voluntary Professional, a public customer 
would also cede priority rights normally granted to public customer 
orders. Importantly, however, this result is determined solely by the 
choice of the

[[Page 47990]]

customer, and may be rescinded at a customer's election.
    The commenter questioned how the proposed rule change would benefit 
public customers.\9\ The commenter maintained that if CBOE is willing 
to forgive its cancellation fees, ``then * * * there was never a 
problem with cancels from public customers but only [the Exchange] 
trying to concentrate power and punish the public customer.'' The 
Commission is not today considering CBOE's cancellation fee.\10\ 
Instead, the Commission is approving a proposed rule change that would 
give public customers more flexibility in how they participate in 
CBOE's marketplace. In sum, the Commission believes that the proposed 
rule change would provide an additional choice to public customers.
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    \9\ See Schneider Letter, supra note 4.
    \10\ See Securities Exchange Act Release No. 44607 (July 27, 
2001), 66 FR 40757 (August 3, 2001) (SR-CBOE-2001-40) (establishing 
the CBOE Order Routing System cancellation fee).
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    The Commission finds good cause for approving the proposed rule 
change prior to the thirtieth day after the date of publication of 
notice of filing thereof in the Federal Register. The Commission 
believes that accelerated approval of the Exchange's proposal relating 
to Voluntary Professionals is appropriate because it is similar to an 
ISE rule that recently was approved by the Commission.\11\ The 
Commission believes that CBOE's proposal does not raise any new issues 
that were not considered by the Commission in connection with the ISE 
proposal.
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    \11\ See supra note 8.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-CBOE-2008-09), as modified by 
Amendment No. 2, be, and hereby is, approved on an accelerated basis.

    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,
Acting Secretary.
[FR Doc. E8-18895 Filed 8-14-08; 8:45 am]
BILLING CODE 8010-01-P