Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of Proposed Rule Change Related to Preferred Market Makers, 51626-51628 [E9-24078]
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51626
Federal Register / Vol. 74, No. 193 / Wednesday, October 7, 2009 / Notices
the State of Georgia (FEMA–1858–DR),
dated 09/26/2009.
Incident: Severe storms and flooding.
Incident Period: 09/18/2009 and
continuing.
Effective Date: 09/28/2009.
Physical Loan Application Deadline
Date: 11/25/2009.
Economic Injury (EIDL) Loan
Application Deadline Date: 06/28/2010.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street, SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: The notice
of the President’s major disaster
declaration for Private Non-Profit
Percent
organizations in the State of Georgia,
dated 09/26/2009, is hereby amended to
5.500 include the following areas as adversely
affected by the disaster.
2.750
Primary Counties:
Cherokee, Crawford, Dekalb, Fulton,
6.000
Newton.
All other information in the original
4.500 declaration remains unchanged.
Administration, Processing And
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street, SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
President’s major disaster declaration on
09/29/2009, applications for disaster
loans may be filed at the address listed
above or other locally announced
locations.
The following areas have been
determined to be adversely affected by
the disaster: The Territory of American
Samoa.
The Interest Rates are:
For Physical Damage:
Homeowners With Credit Available Elsewhere; ........................
Homeowners
Without
Credit
Available Elsewhere; .................
Businesses With Credit Available
Elsewhere; ................................
Other (Including Non-Profit Organizations) With Credit Available
Elsewhere; ................................
Businesses And Non-Profit Organizations Without Credit Available Elsewhere; ........................
4.000
For Economic Injury:
Percent
Businesses & Small Agricultural
Cooperatives Without Credit
Available Elsewhere; .................
(Catalog of Federal Domestic Assistance
Numbers 59002 and 59008)
James E. Rivera,
Acting Associate Administrator for Disaster
Assistance.
[FR Doc. E9–24178 Filed 10–6–09; 8:45 am]
BILLING CODE 8025–01–P
4.000
The number assigned to this disaster
for physical damage is 118932 and for
economic injury is 118940.
SECURITIES AND EXCHANGE
COMMISSION
[File No. 500–1]
(Catalog of Federal Domestic Assistance
Numbers 59002 and 59008)
SpongeTech Delivery Systems, Inc.;
Order of Suspension of Trading
James E. Rivera,
Acting Associate Administrator for Disaster
Assistance.
[FR Doc. E9–24175 Filed 10–6–09; 8:45 am]
October 5, 2009.
BILLING CODE 8025–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #11888 and #11889]
erowe on DSK5CLS3C1PROD with NOTICES
Georgia Disaster Number GA–00028
AGENCY: U.S. Small Business
Administration.
ACTION: Amendment 1.
SUMMARY: This is an amendment of the
Presidential declaration of a major
disaster for Public Assistance Only for
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15:25 Oct 06, 2009
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It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of SpongeTech
Delivery Systems, Inc. (‘‘SpongeTech’’)
because questions have arisen regarding
the accuracy of assertions in press
releases to investors and in periodic
reports filed with the Commission
concerning, among other things: (1) The
amount of sales and customer orders
received by the company; (2) the
company’s investment agreements; and
(3) the company’s revenues as reported
in its financial statements. In addition,
SpongeTech has not filed any periodic
reports with the Commission since the
period ended February 28, 2009.
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The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
company.
Therefore, it is ordered, pursuant to
Section 12(k) of the Securities Exchange
Act of 1934, that trading in the
securities of the above-listed company is
suspended for the period from 9:30 a.m.
EDT, on October 5, 2009 through 11:59
p.m. EDT, on October 16, 2009.
By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9–24257 Filed 10–5–09; 4:15 pm]
BILLING CODE P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60746; File No. SR–CBOE–
2009–070]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing of
Proposed Rule Change Related to
Preferred Market Makers
September 30, 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
September 28, 2009, the Chicago Board
Options Exchange, Incorporated
(‘‘CBOE’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the CBOE. The Commission
is publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The CBOE is proposing to amend its
Preferred Market-Maker program to
allow for the preferencing of complex
orders entered into the complex order
book (‘‘COB’’) and the complex order
RFR auction (‘‘COA’’). In addition,
CBOE is proposing to make a
clarification regarding the existing
operation of the Preferred Market-Maker
program for simple orders. The text of
the proposed rule change is available on
the Exchange’s Web site at (https://
www.cboe.org/Legal), at the Office of the
Secretary, CBOE, and at the
Commission’s Public Reference Room.
1 15
2 17
E:\FR\FM\07OCN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 74, No. 193 / Wednesday, October 7, 2009 / Notices
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange 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. The
Exchange 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
erowe on DSK5CLS3C1PROD with NOTICES
1. Purpose
The Exchange is proposing to adopt a
Preferred Market-Maker program for
complex orders that is modeled after its
existing Preferred Market-Maker
program for simple orders, Rule 8.13.
Under the proposal, the Exchange may
allow, on a class-by-class basis, for the
receipt of Preferred Market-Maker
complex orders through the COB and/or
COA systems, and a qualifying recipient
of a Preferred Market-Maker complex
order shall be afforded a participation
entitlement.
Under the proposal, any Exchange
Market-Maker type could be designated
as a Preferred Market-Maker (e.g., Lead
Market-Maker, Designated Primary
Market-Maker, Market-Makers),
however, the Hybrid System is
programmed so that a recipient of a
Preferred Market-Maker complex order
would only receive a participation
entitlement for such complex order if
the following provisions are met: First,
whether the participation entitlement is
applied to COB and/or COA, the
Preferred Market-Maker has an
appointment/allocation in the relevant
option class. Second, with respect to
classes where there is a participation
entitlement for COB, the Preferred
Market-Maker is quoting in COB at the
best net priced bid/offer when the order
is received. With respect to classes
where there is a participation
entitlement for COA, (i) at the beginning
of the auction, the Preferred MarketMaker is quoting at either (a) the best
bid/offer on the Exchange in at least one
of the component series of the complex
order or (b) the best net priced bid/offer
in COB for the complex order; and (ii)
at the conclusion of the auction, the
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15:25 Oct 06, 2009
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Preferred Market-Maker is quoting at the
best net priced bid/offer in COA.3
Provided the eligibility requirements
have been met, the Preferred MarketMaker participation entitlement would
be 40% when there are two or more
Market-Makers also quoting at the best
net priced bid/offer execution price
(which is the price at the time a
complex order is received in the case of
a COB participation entitlement or the
price at the conclusion of the auction in
the case of a COA participation
entitlement), and 50% when there is
only one other Market-Maker quoting at
the best net priced bid/offer execution
price.4 In addition, the following would
apply: First, the Preferred Market-Maker
would not be allocated a total quantity
greater than the quantity that the
Preferred Market-Maker is quoting at the
best net priced bid/offer execution
price. Second, the entitlement would be
based on the number of contracts
remaining after the incoming complex
order has traded against equivalent
derived net priced orders and quotes in
the individual series of the EBook and
equivalent net priced public customer
complex orders resting in COB that have
priority over the Preferred Maker-Maker
in accordance with Rule 6.53C,
Complex Orders on the Hybrid System.
Third, if a Preferred Market-Maker
receives a participation entitlement for
its complex order resting in COB or its
response to COA, then no other
participation entitlements for complex
orders set forth in Exchange Rules (e.g.,
Rule 8.87, Participation Entitlement of
DPMs and e-DPMs, and Rule 8.15B,
Participation Entitlement of LMMs) shall
apply to complex orders resting in COB
or entered in response to COA.5
3 In this regard, CBOE’s proposal prohibits an
order flow provider from notifying a Preferred
Market-Maker regarding its intention to submit a
preferenced complex order so that such Preferred
Market-Maker could change its quotation to match
the NBBO immediately prior to submission of the
preferenced order, and then fade its quote. CBOE
states that Rule 4.18, Prevention of the Misuse of
Material, Nonpublic Information, prohibits this sort
of misuse of material, non-public information.
Further, CBOE represents that it will conduct
surveillance for, and enforce against, such
violations.
4 The Exchange notes that, if a Market-Maker is
also eligible for an allocation pursuant to the
operation of the applicable algorithm in effect for
a class (for example, an allocation based on pricetime or a pro rata percentage), the Market-Maker
would be entitled to receive an allocation (not to
exceed the size of the Market-Maker’s quote) of the
greater of the amount the Market-Maker would be
entitled to pursuant to the participation entitlement
or the amount it would otherwise receive pursuant
to the operation of the algorithm in accordance with
Rule 6.45A or 6.45B, as applicable.
5 The Exchange notes that, to the extent a
complex order trades with the equivalent derived
net priced orders and quotes in the individual
series of the EBook, there may also be a
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51627
Lastly, the proposed rule text notes
that a Preferred Market-Maker must
comply with the quoting obligations
applicable to its Market-Maker type
under Exchange rules and must provide
continuous electronic quotes (as defined
in Rule 1.1(ccc)) in at least 90% of the
series of each class for which it receives
Preferred Market-Maker orders in
accordance with the requirements for
the preferencing of simple orders (the
‘‘90% quoting obligation’’).
In this regard, the Exchange is
proposing to revise the existing text of
Rule 8.13 regarding the current
operation of its preferencing program for
simple orders to more specifically
reflect the way the Hybrid System
operates. Substantively, the
requirements of the rule are not
changing. The existing rule text
indicates that a recipient of a Preferred
Market-Maker order will only receive a
participation entitlement for such order
if the following provisions are met: (i)
The Preferred Market-Maker must have
an appointment/allocation in the
relevant option class; (ii) the Preferred
Market-Maker must be quoting at the
best bid/offer on the Exchange; and (iii)
the Preferred Market-Maker must
comply with the quoting obligations
applicable to its Market-Maker type
under Exchange rules and must provide
continuous electronic quotes (as defined
in Rule 1.1(ccc)) in at least 90% of the
series of each class for which it receives
Preferred Market-Maker orders. The
Exchange is amending the text to clarify
that the Hybrid System is programmed
so that the recipient of a Preferred
Market-Maker order will only receive a
participation entitlement for such order
if provisions (i) and (ii) above are met.
Separately, a Preferred Market-Maker
must also comply with the quoting
obligations applicable to its MarketMaker type under Exchange rules and
the 90% quoting obligation. The 90%
quoting obligation, as with the various
other Market-Making quoting
obligations, are subject to Exchange
market performance, surveillance, and/
or disciplinary programs to assess and
enforce compliance.
participation entitlement applied to those
individual series legs in accordance with Rule
6.45A or 6.45B, as applicable. For example, if a
complex order executes against the individual
series legs, then the remainder executes against
COB resting orders or COA responses, a Preferred
Market-Maker entitlement may apply both on the
individual series legs execution and on the COB or
COA execution. Also, if a complex order
automatically exercises against the individual series
legs upon receipt or at the conclusion of a COA, a
Preferred Market-Maker entitlement may apply to
the individual series legs. Similarly, if a resting
complex order becomes marketable against the
individual series legs, a Preferred Market-Maker
entitlement may apply to the individual series legs.
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51628
Federal Register / Vol. 74, No. 193 / Wednesday, October 7, 2009 / Notices
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the Act 6
in general and furthers the objectives of
Section 6(b)(5) of the Act 7 in particular
in that it should 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.
The proposed rule change will help
generate greater complex order flow for
the Exchange and provide additional
incentives for Market-Makers to trade
with that order flow, which in turn adds
depth and liquidity to CBOE’s markets.
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
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
Within 35 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the Exchange consents,
the Commission will:
(A) By order approve such proposed
rule change, or
(B) Institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
erowe on DSK5CLS3C1PROD with NOTICES
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 rulecomments@sec.gov. Please include File
Number SR–CBOE–2009–070 on the
subject line.
Paper Comments
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60756; File No. SR–NYSE–
2009–100]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by New York
Stock Exchange LLC Extending the
Operation of Its New Market Model
Pilot and Supplemental Liquidity
Providers Pilot, Until the Earlier of
All submissions should refer to File
Securities and Exchange Commission
Number SR–CBOE–2009–070. This file
Approval to Make Such Pilots
number should be included on the
subject line if e-mail is used. To help the Permanent or November 30, 2009
Commission process and review your
October 1, 2009.
comments more efficiently, please use
Pursuant to Section 19(b)(1) 1 of the
only one method. The Commission will
Securities Exchange Act of 1934 (the
post all comments on the Commission’s
‘‘Act’’) 2 and Rule 19b-4 thereunder,3
Internet Web site (https://www.sec.gov/
notice is hereby given that, on
rules/sro.shtml). Copies of the
September 30, 2009, New York Stock
submission, all subsequent
Exchange LLC (‘‘NYSE’’ or the
amendments, all written statements
‘‘Exchange’’) filed with the Securities
with respect to the proposed rule
and Exchange Commission (the
change that are filed with the
‘‘Commission’’) the proposed rule
Commission, and all written
change as described in Items I and II
communications relating to the
below, which Items have been prepared
proposed rule change between the
by the self-regulatory organization. The
Commission and any person, other than Commission is publishing this notice to
those that may be withheld from the
solicit comments on the proposed rule
public in accordance with the
change from interested persons.
provisions of 5 U.S.C. 552, will be
I. Self-Regulatory Organization’s
available for inspection and copying in
Statement of the Terms of Substance of
the Commission’s Public Reference
the Proposed Rule Change
Room, 100 F Street, NE., Washington,
DC 20549, on official business days
The Exchange proposes to extend the
between the hours of 10 a.m. and 3 p.m. operation of its New Market Model Pilot
Copies of such filing also will be
and Supplemental Liquidity Providers
Pilot, until the earlier of Securities and
available for inspection and copying at
Exchange Commission approval to make
the principal office of the CBOE. All
such pilots permanent or November 30,
comments received will be posted
2009. The text of the proposed rule
without change; the Commission does
change is available at the Exchange, the
not edit personal identifying
Commission’s Public Reference Room,
information from submissions. You
and https://www.nyse.com.
should submit only information that
you wish to make available publicly. All II. Self-Regulatory Organization’s
submissions should refer to File
Statement of the Purpose of, and
Number SR–CBOE–2009–070 and
Statutory Basis for, the Proposed Rule
should be submitted on or before
Change
October 28, 2009.
In its filing with the Commission, the
For the Commission, by the Division of
self-regulatory organization included
Trading and Markets, pursuant to delegated
statements concerning the purpose of,
authority.8
and basis for, the proposed rule change
Florence E. Harmon,
and discussed any comments it received
on the proposed rule change. The text
Deputy Secretary.
of those statements may be examined at
[FR Doc. E9–24078 Filed 10–6–09; 8:45 am]
the places specified in Item IV below.
BILLING CODE 8011–01–P
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
1 15
U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
6 15
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15:25 Oct 06, 2009
2 15
8 17
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CFR 200.30–3(a)(12).
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]]>Agencies
[Federal Register Volume 74, Number 193 (Wednesday, October 7, 2009)]
[Notices]
[Pages 51626-51628]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-24078]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-60746; File No. SR-CBOE-2009-070]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing of Proposed Rule Change Related to
Preferred Market Makers
September 30, 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 September 28, 2009, the Chicago Board Options Exchange, Incorporated
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the CBOE.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The CBOE is proposing to amend its Preferred Market-Maker program
to allow for the preferencing of complex orders entered into the
complex order book (``COB'') and the complex order RFR auction
(``COA''). In addition, CBOE is proposing to make a clarification
regarding the existing operation of the Preferred Market-Maker program
for simple orders. The text of the proposed rule change is available on
the Exchange's Web site at (https://www.cboe.org/Legal), at the Office
of the Secretary, CBOE, and at the Commission's Public Reference Room.
[[Page 51627]]
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 Exchange 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. The Exchange 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 is proposing to adopt a Preferred Market-Maker program
for complex orders that is modeled after its existing Preferred Market-
Maker program for simple orders, Rule 8.13. Under the proposal, the
Exchange may allow, on a class-by-class basis, for the receipt of
Preferred Market-Maker complex orders through the COB and/or COA
systems, and a qualifying recipient of a Preferred Market-Maker complex
order shall be afforded a participation entitlement.
Under the proposal, any Exchange Market-Maker type could be
designated as a Preferred Market-Maker (e.g., Lead Market-Maker,
Designated Primary Market-Maker, Market-Makers), however, the Hybrid
System is programmed so that a recipient of a Preferred Market-Maker
complex order would only receive a participation entitlement for such
complex order if the following provisions are met: First, whether the
participation entitlement is applied to COB and/or COA, the Preferred
Market-Maker has an appointment/allocation in the relevant option
class. Second, with respect to classes where there is a participation
entitlement for COB, the Preferred Market-Maker is quoting in COB at
the best net priced bid/offer when the order is received. With respect
to classes where there is a participation entitlement for COA, (i) at
the beginning of the auction, the Preferred Market-Maker is quoting at
either (a) the best bid/offer on the Exchange in at least one of the
component series of the complex order or (b) the best net priced bid/
offer in COB for the complex order; and (ii) at the conclusion of the
auction, the Preferred Market-Maker is quoting at the best net priced
bid/offer in COA.\3\
---------------------------------------------------------------------------
\3\ In this regard, CBOE's proposal prohibits an order flow
provider from notifying a Preferred Market-Maker regarding its
intention to submit a preferenced complex order so that such
Preferred Market-Maker could change its quotation to match the NBBO
immediately prior to submission of the preferenced order, and then
fade its quote. CBOE states that Rule 4.18, Prevention of the Misuse
of Material, Nonpublic Information, prohibits this sort of misuse of
material, non-public information. Further, CBOE represents that it
will conduct surveillance for, and enforce against, such violations.
---------------------------------------------------------------------------
Provided the eligibility requirements have been met, the Preferred
Market-Maker participation entitlement would be 40% when there are two
or more Market-Makers also quoting at the best net priced bid/offer
execution price (which is the price at the time a complex order is
received in the case of a COB participation entitlement or the price at
the conclusion of the auction in the case of a COA participation
entitlement), and 50% when there is only one other Market-Maker quoting
at the best net priced bid/offer execution price.\4\ In addition, the
following would apply: First, the Preferred Market-Maker would not be
allocated a total quantity greater than the quantity that the Preferred
Market-Maker is quoting at the best net priced bid/offer execution
price. Second, the entitlement would be based on the number of
contracts remaining after the incoming complex order has traded against
equivalent derived net priced orders and quotes in the individual
series of the EBook and equivalent net priced public customer complex
orders resting in COB that have priority over the Preferred Maker-Maker
in accordance with Rule 6.53C, Complex Orders on the Hybrid System.
Third, if a Preferred Market-Maker receives a participation entitlement
for its complex order resting in COB or its response to COA, then no
other participation entitlements for complex orders set forth in
Exchange Rules (e.g., Rule 8.87, Participation Entitlement of DPMs and
e-DPMs, and Rule 8.15B, Participation Entitlement of LMMs) shall apply
to complex orders resting in COB or entered in response to COA.\5\
---------------------------------------------------------------------------
\4\ The Exchange notes that, if a Market-Maker is also eligible
for an allocation pursuant to the operation of the applicable
algorithm in effect for a class (for example, an allocation based on
price-time or a pro rata percentage), the Market-Maker would be
entitled to receive an allocation (not to exceed the size of the
Market-Maker's quote) of the greater of the amount the Market-Maker
would be entitled to pursuant to the participation entitlement or
the amount it would otherwise receive pursuant to the operation of
the algorithm in accordance with Rule 6.45A or 6.45B, as applicable.
\5\ The Exchange notes that, to the extent a complex order
trades with the equivalent derived net priced orders and quotes in
the individual series of the EBook, there may also be a
participation entitlement applied to those individual series legs in
accordance with Rule 6.45A or 6.45B, as applicable. For example, if
a complex order executes against the individual series legs, then
the remainder executes against COB resting orders or COA responses,
a Preferred Market-Maker entitlement may apply both on the
individual series legs execution and on the COB or COA execution.
Also, if a complex order automatically exercises against the
individual series legs upon receipt or at the conclusion of a COA, a
Preferred Market-Maker entitlement may apply to the individual
series legs. Similarly, if a resting complex order becomes
marketable against the individual series legs, a Preferred Market-
Maker entitlement may apply to the individual series legs.
---------------------------------------------------------------------------
Lastly, the proposed rule text notes that a Preferred Market-Maker
must comply with the quoting obligations applicable to its Market-Maker
type under Exchange rules and must provide continuous electronic quotes
(as defined in Rule 1.1(ccc)) in at least 90% of the series of each
class for which it receives Preferred Market-Maker orders in accordance
with the requirements for the preferencing of simple orders (the ``90%
quoting obligation'').
In this regard, the Exchange is proposing to revise the existing
text of Rule 8.13 regarding the current operation of its preferencing
program for simple orders to more specifically reflect the way the
Hybrid System operates. Substantively, the requirements of the rule are
not changing. The existing rule text indicates that a recipient of a
Preferred Market-Maker order will only receive a participation
entitlement for such order if the following provisions are met: (i) The
Preferred Market-Maker must have an appointment/allocation in the
relevant option class; (ii) the Preferred Market-Maker must be quoting
at the best bid/offer on the Exchange; and (iii) the Preferred Market-
Maker must comply with the quoting obligations applicable to its
Market-Maker type under Exchange rules and must provide continuous
electronic quotes (as defined in Rule 1.1(ccc)) in at least 90% of the
series of each class for which it receives Preferred Market-Maker
orders. The Exchange is amending the text to clarify that the Hybrid
System is programmed so that the recipient of a Preferred Market-Maker
order will only receive a participation entitlement for such order if
provisions (i) and (ii) above are met. Separately, a Preferred Market-
Maker must also comply with the quoting obligations applicable to its
Market-Maker type under Exchange rules and the 90% quoting obligation.
The 90% quoting obligation, as with the various other Market-Making
quoting obligations, are subject to Exchange market performance,
surveillance, and/or disciplinary programs to assess and enforce
compliance.
[[Page 51628]]
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the Act
\6\ in general and furthers the objectives of Section 6(b)(5) of the
Act \7\ in particular in that it should 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. The proposed rule change
will help generate greater complex order flow for the Exchange and
provide additional incentives for Market-Makers to trade with that
order flow, which in turn adds depth and liquidity to CBOE's markets.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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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
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
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
(A) By order approve such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-CBOE-2009-070 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-2009-070. 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 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-2009-070 and should be
submitted on or before October 28, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-24078 Filed 10-6-09; 8:45 am]
BILLING CODE 8011-01-P
