Sunshine Act Meeting, 43742 [E9-20843]

Download as PDF 43742 Federal Register / Vol. 74, No. 165 / Thursday, August 27, 2009 / Notices mstockstill on DSKH9S0YB1PROD with NOTICES CBOE now proposes to amend Rule 4.11.04(c) to extend the Exemption to positions of customers of members. Under the proposal, to avail themselves of the Exemption, such customers would be able to hedge their positions only in accordance with the OCC Model. In connection with this amendment, CBOE proposes to add new subparagraph (4) to Rule 4.11.04(c)(E) to set forth the obligations of a member carrying an account that includes an equity option position for a customer who intends to rely on the Exemption. Specifically, the member would be required to obtain from the customer a written certification to the Exchange that the customer is using the OCC Model. In addition, the member would be required to obtain from the customer a written statement confirming that such customer: (a) Is relying on the Exemption; (b) will use only the OCC Model for purposes of calculating the net delta of the customer’s option positions for purposes of the Exemption; (c) will promptly notify the member if the customer ceases to rely on the Exemption; and (d) in connection with using the OCC Model, has duly executed and delivered to the Exchange such documents as the Exchange may require to be executed and delivered to the Exchange as a condition to reliance on the Exemption. As under the current Exemption, each member that holds or carries an account that relies on the Exemption is required to report, in accordance with Rule 4.13,10 all equity option positions (including those that are delta neutral) that are reportable under that rule, and also is required to report on its own behalf or on behalf of a designated aggregation unit 11 the net delta and the options contract equivalent of the net delta of such positions for each account that holds an equity option position subject to the delta hedging exemption in excess of the levels specified in Rule hedge exemption, such position cannot be used to take advantage of another exemption from position limit requirements. See Exemption Approval Order, supra note 7, at note 11. 10 Rule 4.13 requires, among other things, that members report to the Exchange aggregate long or short positions on the same side of the market of 200 or more contracts of any single class of options contracts dealt in on the Exchange. 11 See Rule 4.11.04(c)(D), which provides, under certain conditions, that the net delta of an options position held by an entity entitled to rely on the exemption could be calculated without regard to positions in or relating to the security underlying the option position held by an affiliated entity or another trading unit within the same entity, provided that, among other things, no control relationship exists between such affiliates or trading units and the entity has designated in writing in advance the affiliates or trading units that are to be considered separate and distinct from each other. VerDate Nov<24>2008 17:19 Aug 26, 2009 Jkt 217001 4.11.12 Members carrying a customer account that relies on the Exemption would be subject to this requirement. In addition, the Exchange proposes to amend Rule 4.11.04(c)(G) governing records so that it extends to members carrying customer accounts. Each member relying on the Exemption would be required to retain, and undertake reasonable efforts to ensure that its customers relying on the Exemption retain, a list of the options, securities, and other instruments underlying each option position net delta calculation reported to the Exchange; and to produce such information to the Exchange upon request.13 The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange.14 In particular, the Commission believes that the proposed rule change is consistent with Section 6(b)(5) of the Act,15 which requires, among other things, that CBOE rules be designed to prevent fraudulent and manipulative acts and practices, 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. In approving the current Exemption, the Commission noted its previous statement in support of recognizing options positions hedged on a delta neutral basis as properly exempted from position limits.16 The Commission believes that it is appropriate and consistent with the Act to extend the current Exemption to customers. The Commission notes that the Exchange has added provisions to Rule 4.11.04(c)(E)(4), specifically with respect to customers that seek to rely on the Exemption, that obligate members carrying accounts for those customers to obtain from them certain certifications and assurances as described above, including a written statement to the Exchange that the customer has duly executed and delivered to the member such documents as the Exchange may 12 See Rule 4.11.04(c)(F). Rule 4.11.04(c)(G). 14 In approving this rule, the Commission notes that it has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 15 15 U.S.C. 78f(b)(5). 16 See Securities Exchange Act Release No. 40594 (October 23, 1998), 63 FR 59362, 59380 (November 3, 1998) (File No. S7–30–97) (adopting rules relating to OTC derivatives dealers), cited in Exemption Approval Order, supra note 7. 13 See PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 require to be executed and delivered to it. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,17 that the proposed rule change (SR–CBOE–2009– 039), as modified by Amendment No. 1, be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–20655 Filed 8–26–09; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION Sunshine Act Meeting Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94–409, that the Securities and Exchange Commission will hold a Joint Open Meeting with the Commodity Futures Trading Commission to seek input from the public on harmonization of market regulation on September 2, 2009 from 9 a.m. until 5 p.m. at the CFTC and on September 3, 2009 from 9 a.m. until 12:30 p.m. at the SEC. The Joint Open Meeting will take place on September 2, 2009 at the CFTC’s headquarters at Three Lafayette Centre, 1155 21st Street, NW., Lobby Level Hearing Room (Room 1000), Washington, DC 20581 and on September 3, 2009 at the SEC’s headquarters at 100 F Street, NE., Auditorium (Room L–002), Washington, DC 20549. The Joint Open Meeting will be open to the public with seating on a first-come, first-served basis. Visitors will be subject to security checks. Discussion topics at the Joint Open Meeting will include the regulation of exchanges and markets; the regulation of intermediaries; the regulation of clearance and settlement; enforcement; and the regulation of investment funds. For further information, please contact: The Office of the Secretary at (202) 551– 5400. Dated: August 25, 2009. Elizabeth M. Murphy, Secretary. [FR Doc. E9–20843 Filed 8–25–09; 4:15 pm] BILLING CODE 8010–01–P 17 15 18 17 E:\FR\FM\27AUN1.SGM U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 27AUN1

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[Federal Register Volume 74, Number 165 (Thursday, August 27, 2009)]
[Notices]
[Page 43742]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-20843]


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SECURITIES AND EXCHANGE COMMISSION


Sunshine Act Meeting

    Notice is hereby given, pursuant to the provisions of the 
Government in the Sunshine Act, Public Law 94-409, that the Securities 
and Exchange Commission will hold a Joint Open Meeting with the 
Commodity Futures Trading Commission to seek input from the public on 
harmonization of market regulation on September 2, 2009 from 9 a.m. 
until 5 p.m. at the CFTC and on September 3, 2009 from 9 a.m. until 
12:30 p.m. at the SEC.
    The Joint Open Meeting will take place on September 2, 2009 at the 
CFTC's headquarters at Three Lafayette Centre, 1155 21st Street, NW., 
Lobby Level Hearing Room (Room 1000), Washington, DC 20581 and on 
September 3, 2009 at the SEC's headquarters at 100 F Street, NE., 
Auditorium (Room L-002), Washington, DC 20549. The Joint Open Meeting 
will be open to the public with seating on a first-come, first-served 
basis. Visitors will be subject to security checks.
    Discussion topics at the Joint Open Meeting will include the 
regulation of exchanges and markets; the regulation of intermediaries; 
the regulation of clearance and settlement; enforcement; and the 
regulation of investment funds. For further information, please 
contact: The Office of the Secretary at (202) 551-5400.

    Dated: August 25, 2009.
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-20843 Filed 8-25-09; 4:15 pm]
BILLING CODE 8010-01-P
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