Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to the Complex Order Book, 12416-12417 [E9-6404]
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12416
Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,17 that the
proposed rule changes, as amended
(SR–ISE–2009–04; SR–CBOE–2009–001;
SR–NYSEArca–2009–10; and SR–
NYSEALTR–2009–11) be, and they
hereby are, approved on an accelerated
basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–6327 Filed 3–23–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59585; File No. SR–CBOE–
2009–017]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Related to the Complex
Order Book
March 17, 2009.
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 March 13,
2009, the Chicago Board Options
Exchange, Incorporated (the ‘‘Exchange’’
or ‘‘CBOE’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II,
below, which Items have been prepared
by the Exchange. The Exchange filed the
proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b–4(f)(6) thereunder.4 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
Rule 6.53C, Complex Orders on the
Hybrid System, to permit conversions
and reversals 5 to be eligible for routing
17 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
5 A conversion (reversal) order is an order
involving the purchase (sale) of a put option and
the sale (purchase) of a call option in equivalent
units with the same strike price and expiration in
the same underlying security, and the purchase
to the complex order book (‘‘COB’’). The
text of the proposed rule change is
available on the Exchange’s Web site
(https://www.cboe.org/Legal), at the
Exchange’s Office of the Secretary and
at the Commission.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization 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
When the Exchange originally
adopted its electronic COB rule in 2005,
the rule contained a provision related to
the routing of conversions and reversals.
Specifically, the rule provided that
conversions and reversals will not be
eligible for routing to the COB and that,
when the Exchange determines to allow
conversions and reversals to route to
COB, it will submit to the Commission
a rule filing pursuant to Section
19(b)(3)(A) of the Act.6
The Exchange has enhanced its COB
system functionality and has
determined to permit conversions and
reversals to be routed to COB. As such,
as provided in the rule, this rule change
is being submitted pursuant to Section
19(b)(3)(A) to eliminate the restriction
on routing conversions and reversals to
COB. Conversions and reversals, as well
as any other complex orders with stock
that have more than one option leg, will
be handled by COB in the same manner
as stock-option orders that have only
one option leg with one exception.7
For stock-option orders that have only
one option leg, the rule currently
provides that the option leg will not be
executed on the Hybrid System at the
Exchange’s best bid (offer) in that series
mstockstill on PROD1PC66 with NOTICES
18 17
VerDate Nov<24>2008
01:06 Mar 24, 2009
Jkt 217001
(sale) of the related instrument. See Rule
6.53C(a)(9).
6 15 U.S.C. 78s(b)(3)(A).
7 As a result of being eligible for COB, these
complex orders will also be eligible for electronic
auction via the complex order auction (‘‘COA’’), the
automated improvement mechanism (‘‘AIM’’) and/
or the solicitation auction mechanism (‘‘AIM
SAM’’). See Rules 6.53C.06, 6.74A.07 and 6.74B.01.
PO 00000
Frm 00114
Fmt 4703
Sfmt 4703
if one or more public customer orders
are resting at that price on the electronic
book, unless the option leg trades with
such public customer order(s). This
COB provision is consistent with
CBOE’s open outcry priority rules for
stock-option orders that have only one
option leg.8 For conversions, reversals
and other complex orders with stock
that have more than one option leg, the
rule text will clarify that this provision
will apply only if there are public
customer orders resting on the Hybrid
System at the Exchange’s best bid (offer)
in the electronic book for each of the
options legs of the conversion, reversal
or stock-option order. Thus, the options
legs of such an order would not execute
on the Hybrid System at the Exchange’s
best bid (offer) if one or more public
customer orders are resting at that price
in the electronic book in each of the
options legs, unless the options legs
trade with such public customer orders.
This proposed COB provision is
consistent with CBOE’s open outcry
priority rules for stock-option orders
that have more than one option leg.9
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with Section
6(b) of the Act 10 in general and furthers
the objectives of Section 6(b)(5) of the
Act 11 in particular in that it is designed
to foster cooperation and coordination
with persons engaged in regulating,
clearing, settling, processing
information with respect to, and
facilitating transactions in securities, 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. In particular, the
Exchange believes that the addition of
conversions and reversals to the list of
complex orders eligible for electronic
handling under Rule 6.53C is a
significant enhancement for investors
8 In open outcry, stock-option orders that have
only one option leg have priority over bid (offers)
of the trading crowd, but not over bids (offers) in
the public customer limit order book. See, e.g.,
Rules 6.45A(b)(ii) and 6.45B(b)(ii).
9 In open outcry, stock-option orders that have
more than one option leg are handled in the same
manner as other complex orders that have more
than one option leg and, as such, have priority over
equivalent bids (offers) in the individual series legs
that are represented in the trading crowd or in the
public customer limit order book provided at least
one leg of the order betters the corresponding bid
(offer) in the public customer limit order book by
at least the minimum trading increment or a $0.01
increment, which increment shall be determined by
the Exchange on a class-by-class basis. Id.
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(5).
E:\FR\FM\24MRN1.SGM
24MRN1
Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices
Electronic Comments
seeking automated handling of
conversions and reversals.
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
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
The Exchange neither solicited nor
received comments on the proposal.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing rule 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 from the date on which it
was filed, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest, provided that the selfregulatory organization has given the
Commission written notice of its intent
to file 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 proposed rule change
has become effective pursuant to
Section 19(b)(3)(A) of the Act 12 and
Rule 19b–4(f)(6) thereunder.13 At any
time within 60 days of the filing of such
proposed rule change, the Commission
may summarily abrogate such rule
change if it appears to the Commission
that such action is necessary or
appropriate in the public interest, for
the protection of investors, or otherwise
in furtherance of the purposes of the
Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
mstockstill on PROD1PC66 with NOTICES
• 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–2009–017 on the
subject line.
All submissions should refer to File
Number SR–CBOE–2009–017. 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, 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 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
available publicly. All submissions
should refer to File Number SR–CBOE–
2009–017 and should be submitted on
or before April 14, 2009.
12 15
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–6404 Filed 3–23–09; 8:45 am]
13 17
BILLING CODE 8010–01–P
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). The CBOE satisfied the
requirement under Rule 19b–4(f)(6)(iii) that the
CBOE give the Commission 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.
VerDate Nov<24>2008
01:06 Mar 24, 2009
Jkt 217001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59495A; File No. SR–
FINRA–2008–052]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Order Granting
Approval of a Proposed Rule Change
Relating to the Adoption of FINRA Rule
2140 (Interfering With the Transfer of
Customer Accounts in the Context of
Employment Disputes) in the
Consolidated FINRA Rulebook;
Correction
March 18, 2009.
In FR Doc. E9–5212, for Tuesday,
March 11, 2009, on page 10633, third
column, footnote 8, the text is revised to
read:
The text of the proposed new FINRA
rule, marked to show changes from
NASD IM–2110–7 and to show that
NASD IM–2110–7 is to be deleted in its
entirety from the Transitional Rulebook,
is attached as Exhibit 5 to the proposed
rule change and is available at https://
www.finra.org/Industry/Regulation/
RuleFilings/2008/P117330. FINRA has
transferred NASD Rule 2110 to the
Consolidated FINRA Rulebook without
change as FINRA Rule 2010. Securities
Exchange Act Release No. 58643
(September 25, 2008), 73 FR 57174
(October 1, 2008) [File No. SR–FINRA–
2008–028].
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.1
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–6353 Filed 3–23–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59592; File No. SR–NYSE–
2009–29]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by New York
Stock Exchange LLC Amending the
NYSE Rule Book To Delete References
to Specific Exchange Systems and To
Remove the Requirement That
Opening Transactions Receive
Specific Designations Pursuant to
NYSE Rules 79A and 115A
March 17, 2009.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
1 17
14 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00115
Fmt 4703
12417
Sfmt 4703
1 15
CFR 200.30–(a)(12).
U.S.C.78s(b)(1).
E:\FR\FM\24MRN1.SGM
24MRN1
]]>Agencies
[Federal Register Volume 74, Number 55 (Tuesday, March 24, 2009)]
[Notices]
[Pages 12416-12417]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-6404]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59585; File No. SR-CBOE-2009-017]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Related to the Complex Order Book
March 17, 2009.
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 March 13, 2009, the Chicago Board Options Exchange, Incorporated
(the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I and II, below, which Items have been prepared by the Exchange.
The Exchange filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 6.53C, Complex Orders on the
Hybrid System, to permit conversions and reversals \5\ to be eligible
for routing to the complex order book (``COB''). The text of the
proposed rule change is available on the Exchange's Web site (https://www.cboe.org/Legal), at the Exchange's Office of the Secretary and at
the Commission.
---------------------------------------------------------------------------
\5\ A conversion (reversal) order is an order involving the
purchase (sale) of a put option and the sale (purchase) of a call
option in equivalent units with the same strike price and expiration
in the same underlying security, and the purchase (sale) of the
related instrument. See Rule 6.53C(a)(9).
---------------------------------------------------------------------------
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
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
When the Exchange originally adopted its electronic COB rule in
2005, the rule contained a provision related to the routing of
conversions and reversals. Specifically, the rule provided that
conversions and reversals will not be eligible for routing to the COB
and that, when the Exchange determines to allow conversions and
reversals to route to COB, it will submit to the Commission a rule
filing pursuant to Section 19(b)(3)(A) of the Act.\6\
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78s(b)(3)(A).
---------------------------------------------------------------------------
The Exchange has enhanced its COB system functionality and has
determined to permit conversions and reversals to be routed to COB. As
such, as provided in the rule, this rule change is being submitted
pursuant to Section 19(b)(3)(A) to eliminate the restriction on routing
conversions and reversals to COB. Conversions and reversals, as well as
any other complex orders with stock that have more than one option leg,
will be handled by COB in the same manner as stock-option orders that
have only one option leg with one exception.\7\
---------------------------------------------------------------------------
\7\ As a result of being eligible for COB, these complex orders
will also be eligible for electronic auction via the complex order
auction (``COA''), the automated improvement mechanism (``AIM'')
and/or the solicitation auction mechanism (``AIM SAM''). See Rules
6.53C.06, 6.74A.07 and 6.74B.01.
---------------------------------------------------------------------------
For stock-option orders that have only one option leg, the rule
currently provides that the option leg will not be executed on the
Hybrid System at the Exchange's best bid (offer) in that series if one
or more public customer orders are resting at that price on the
electronic book, unless the option leg trades with such public customer
order(s). This COB provision is consistent with CBOE's open outcry
priority rules for stock-option orders that have only one option
leg.\8\ For conversions, reversals and other complex orders with stock
that have more than one option leg, the rule text will clarify that
this provision will apply only if there are public customer orders
resting on the Hybrid System at the Exchange's best bid (offer) in the
electronic book for each of the options legs of the conversion,
reversal or stock-option order. Thus, the options legs of such an order
would not execute on the Hybrid System at the Exchange's best bid
(offer) if one or more public customer orders are resting at that price
in the electronic book in each of the options legs, unless the options
legs trade with such public customer orders. This proposed COB
provision is consistent with CBOE's open outcry priority rules for
stock-option orders that have more than one option leg.\9\
---------------------------------------------------------------------------
\8\ In open outcry, stock-option orders that have only one
option leg have priority over bid (offers) of the trading crowd, but
not over bids (offers) in the public customer limit order book. See,
e.g., Rules 6.45A(b)(ii) and 6.45B(b)(ii).
\9\ In open outcry, stock-option orders that have more than one
option leg are handled in the same manner as other complex orders
that have more than one option leg and, as such, have priority over
equivalent bids (offers) in the individual series legs that are
represented in the trading crowd or in the public customer limit
order book provided at least one leg of the order betters the
corresponding bid (offer) in the public customer limit order book by
at least the minimum trading increment or a $0.01 increment, which
increment shall be determined by the Exchange on a class-by-class
basis. Id.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Act \10\ in general and furthers the objectives of
Section 6(b)(5) of the Act \11\ in particular in that it is designed to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, 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.
In particular, the Exchange believes that the addition of conversions
and reversals to the list of complex orders eligible for electronic
handling under Rule 6.53C is a significant enhancement for investors
[[Page 12417]]
seeking automated handling of conversions and reversals.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 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 neither solicited nor received comments on the
proposal.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing rule 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 from the date on which it was filed, or such shorter time as the
Commission may designate if consistent with the protection of investors
and the public interest, provided that the self-regulatory organization
has given the Commission written notice of its intent to file 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 proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-4(f)(6)
thereunder.\13\ At any time within 60 days of the filing of such
proposed rule change, the Commission may summarily abrogate such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6). The CBOE satisfied the requirement
under Rule 19b-4(f)(6)(iii) that the CBOE give the Commission
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.
---------------------------------------------------------------------------
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-2009-017 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-CBOE-2009-017. 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, 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 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
available publicly. All submissions should refer to File Number SR-
CBOE-2009-017 and should be submitted on or before April 14, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-6404 Filed 3-23-09; 8:45 am]
BILLING CODE 8010-01-P
