Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change Related to Stock-Option Orders, 63807-63808 [E9-28891]
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Federal Register / Vol. 74, No. 232 / Friday, December 4, 2009 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–61068; File No. SR–CBOE–
2009–089]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing of a
Proposed Rule Change Related to
Stock-Option Orders
November 27, 2009.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on
November 18, 2009, the Chicago Board
Options Exchange, Incorporated
(‘‘Exchange’’ or ‘‘CBOE’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the self-regulatory
organization. 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 is proposing to amend
its complex order RFR auction (‘‘COA’’)
as it applies to stock-option orders. The
text of the proposed rule change is
available on the Exchange’s Web site
(https://www.cboe.org/Legal), at the
Office of the Secretary, CBOE and at the
Commission.
mstockstill on DSKH9S0YB1PROD with 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
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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Prior to routing to the complex order
book (‘‘COB’’) or once on PAR, eligible
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
VerDate Nov<24>2008
17:26 Dec 03, 2009
Jkt 220001
complex orders may be subjected to an
automated COA process where orders
are exposed for price improvement.
Currently, if a market order cannot be
filled in whole or in a permissible ratio
at the conclusion of COA, then the order
(or any remaining balance) will route to
PAR for manual handling.
The Exchange is proposing to revise
the operation of COA as it relates to
market stock-option orders that contain
one or more option leg(s). The Exchange
is proposing to revise the COA process
so that, instead of routing to PAR for
manual handling, the Exchange may
determine on a class-by-class basis that
any remaining balance of the option
leg(s) will automatically route to CBOE’s
Hybrid System for processing as a
simple market order(s) consistent with
CBOE’s order execution rules and any
remaining balance of the stock leg will
automatically route to the CBOE Stock
Exchange (‘‘CBSX’’), CBOE’s stock
facility, for processing as a simple
market order consistent with CBSX
order execution rules.4 This change will
assist in the automatic execution and
processing of stock-option orders that
are market orders.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the Act 5
in general and furthers the objectives of
Section 6(b)(5) of the Act 6 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 assist in
the automatic execution and processing
of stock-option orders that are market
orders.
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.
4 Pursuant to Rule 6.53C.01, any determination by
the Exchange to route complex market orders in this
manner will be announced to the membership via
Regulatory Circular.
5 15 U.S.C. 78f(b).
6 15 U.S.C. 78f(b)(5).
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63807
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 self-regulatory
organization 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 rulecomments@sec.gov. Please include File
Number SR–CBOE–2009–089 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–2009–089. 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
Section, 100 F Street, NE., Washington,
DC 20549–1090. Copies of the filing will
E:\FR\FM\04DEN1.SGM
04DEN1
63808
Federal Register / Vol. 74, No. 232 / Friday, December 4, 2009 / Notices
also be available for inspection and
copying at the Exchange’s principal
office. 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–2009–089 and
should be submitted on or before
December 28, 2009.
II. Description of the Proposed Rule
Change
The Exchange proposes to amend
Section 303A of its Listed Company
Manual (‘‘Manual’’), which comprises
the Exchange’s corporate governance
standards for listed companies, and to
eliminate current Section 307.00,
regarding related party transactions.5
The changes, which would take effect
on January 1, 2010, include the
following:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–28891 Filed 12–3–09; 8:45 am]
A. Corporate Governance Disclosures
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–61067; File No. SR–NYSE–
2009–89]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Order
Approving a Proposed Rule Change as
Modified by Amendment No. 1 To
Amend Certain Corporate Governance
Requirements
November 25, 2009.
I. Introduction
On August 26, 2009, the New York
Stock Exchange LLC (‘‘NYSE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’),1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend certain of the Exchange’s
corporate governance requirements for
listed companies. NYSE filed
Amendment No. 1 to the proposed rule
change on September 10, 2009. The
proposal was published for comment in
the Federal Register on September 17,
2009.3 The Commission received two
comment letters on the proposal.4 This
order approves the proposed rule
change.
7 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. 60653
(September 11, 2009), 74 FR 47831 (September 17,
2009), 74 FR 48615 (September 23, 2009)
(‘‘Notice’’).
4 See letters to Elizabeth M. Murphy, Secretary,
Commission, from Dorothy M. Donohue, Senior
Associate Counsel, Investment Company Institute,
dated October 8, 2009, and from Davis Polk &
Wardwell LLP, dated October 9, 2009 (‘‘Davis Polk
Letter’’).
mstockstill on DSKH9S0YB1PROD with NOTICES
1 15
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17:26 Dec 03, 2009
Jkt 220001
1. Disclosures Required by Regulation
S–K Under the Act
Section 303A of the Manual currently
requires a listed company to disclose
the identity of its independent directors,
the basis upon which its board may
determine that a director is
independent, and—if it is a controlled
company—any exemptions from the
independence requirements upon which
it has relied. Disclosures relating to the
same aspects of a company’s corporate
governance are now required by Item
407 of the Commission’s Regulation S–
K.6 The proposal would eliminate each
of the Exchange’s requirements that is
similar to a requirement of Item 407,
and incorporate directly into Section
303A the applicable requirement of Item
407.7
2. Disclosures Regarding Required Web
site Postings
A listed company is required by the
NYSE standards to post the charters of
its audit, compensation, and
nominating/corporate governance
committees, its corporate governance
guidelines, and its code of business
conduct and ethics on the company’s
Web site, and to state in its proxy
statement or annual report that these
documents are so posted. The proposal
would add that the listed company’s
Web site address must be included,8 but
would delete the current requirement
for the company to state that the
5 The Exchange states that current Section 307 is
duplicative of Section 314. Under the proposal,
current Section 303A.14 would be re-designated as
Section 307.
6 17 CFR 229.407.
7 Section 303A also revises the requirements
relating to reports by a company’s audit and
compensation committees that are required by the
Commission and are to be included in the
company’s annual proxy statement or annual
report. The proposed rule change would amend
these requirements to reference the disclosures
required by Item 407.
8 The proposal also would reorganize the website
posting requirements in the rule text. Further,
Section 303A.07 would state expressly that closedend funds are not subject to the requirement to post
their audit committee charters, consistent with
current practice.
PO 00000
Frm 00093
Fmt 4703
Sfmt 4703
documents are available in print to any
shareholder who requests them.
3. Other Required Disclosures
Section 303A currently also requires
various other disclosures to be made in
the company’s proxy statement or
annual report.9 The Exchange proposes
to allow a company alternatively to
make these disclosures on its website.10
If a company chooses to do so, it would
be required to disclose this in its proxy
statement or annual report and provide
the website address.
Section 303A.11 of the Manual
currently requires a foreign private
issuer to disclose any significant ways
in which its corporate governance
practices differ from those required of
domestic companies under NYSE listing
standards. Under the proposal, a foreign
private issuer that is required to file an
annual report on Form 20–F with the
Commission would be required to
include the statement of significant
differences in that annual report.
The proposal also would eliminate
the requirement in Section 303A.12(a)
that a listed company disclose in its
annual report (or on Form 10–K if the
company does not prepare an annual
report to shareholders) that its chief
executive officer (‘‘CEO’’) filed the
certification regarding corporate
governance required by the Exchange,
and that the company complied with
Commission certification requirements
regarding public disclosure. The
Exchange proposes to revise Section
303A.12(b) to provide that the CEO of a
listed company must notify the
Exchange in writing after any executive
officer of the company becomes aware
of any non-compliance with Section
303A, as opposed to requiring
notification in the event of material noncompliance as provided by the current
rule.
B. Transition Periods for Newly-Listed
Companies
By way of background, NYSE’s rules
incorporate by reference Rule 10A–3
under the Act,11 which requires a listed
9 These disclosures concern contributions by the
listed company to tax exempt organizations;
executive sessions of non-management or
independent directors; communication with the
presiding director or the non-management or
independent directors; and simultaneous service of
an audit committee member on the audit
committees of more than three public companies.
10 The proposed rule change would further
provide that, if a listed company makes a required
Section 303A disclosure in its proxy statement or
annual report filed with the Commission, it may
incorporate such disclosure by reference from
another document that is filed with the Commission
to the extent permitted by applicable Commission
rules.
11 17 CFR 240.10A–3.
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Agencies
[Federal Register Volume 74, Number 232 (Friday, December 4, 2009)]
[Notices]
[Pages 63807-63808]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-28891]
[[Page 63807]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61068; File No. SR-CBOE-2009-089]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing of a Proposed Rule Change Related to
Stock-Option Orders
November 27, 2009.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on November 18, 2009, the Chicago Board Options Exchange,
Incorporated (``Exchange'' or ``CBOE'') filed with the Securities and
Exchange Commission (the ``Commission'') the proposed rule change as
described in Items I, II, and III below, which Items have been prepared
by the self-regulatory organization. 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\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to amend its complex order RFR auction
(``COA'') as it applies to stock-option orders. The text of the
proposed rule change is available on the Exchange's Web site (https://www.cboe.org/Legal), at the Office of the Secretary, CBOE 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
Prior to routing to the complex order book (``COB'') or once on
PAR, eligible complex orders may be subjected to an automated COA
process where orders are exposed for price improvement. Currently, if a
market order cannot be filled in whole or in a permissible ratio at the
conclusion of COA, then the order (or any remaining balance) will route
to PAR for manual handling.
The Exchange is proposing to revise the operation of COA as it
relates to market stock-option orders that contain one or more option
leg(s). The Exchange is proposing to revise the COA process so that,
instead of routing to PAR for manual handling, the Exchange may
determine on a class-by-class basis that any remaining balance of the
option leg(s) will automatically route to CBOE's Hybrid System for
processing as a simple market order(s) consistent with CBOE's order
execution rules and any remaining balance of the stock leg will
automatically route to the CBOE Stock Exchange (``CBSX''), CBOE's stock
facility, for processing as a simple market order consistent with CBSX
order execution rules.\4\ This change will assist in the automatic
execution and processing of stock-option orders that are market orders.
---------------------------------------------------------------------------
\4\ Pursuant to Rule 6.53C.01, any determination by the Exchange
to route complex market orders in this manner will be announced to
the membership via Regulatory Circular.
---------------------------------------------------------------------------
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the Act
\5\ in general and furthers the objectives of Section 6(b)(5) of the
Act \6\ 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 assist in the automatic execution and processing of stock-option
orders that are market orders.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\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
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 self-regulatory organization 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-2009-089 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-2009-089. 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 Section, 100 F Street,
NE., Washington, DC 20549-1090. Copies of the filing will
[[Page 63808]]
also be available for inspection and copying at the Exchange's
principal office. 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-2009-089 and should be submitted on or before December 28, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
---------------------------------------------------------------------------
\7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-28891 Filed 12-3-09; 8:45 am]
BILLING CODE 8011-01-P