Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving a Proposed Rule Change Regarding Authority Over C2 Options Exchange, Incorporated, 67294-67295 [E9-30077]

Download as PDF 67294 Federal Register / Vol. 74, No. 242 / Friday, December 18, 2009 / Notices 19(b)(3)(A) of the Act 8 and Rule 19b– 4(f)(6) thereunder.9 Normally, a proposed rule change filed under 19b–4(f)(6) may not become operative prior to 30 days after the date of filing. However, Rule 19b– 4(f)(6)(iii) 10 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. Nasdaq has requested that the Commission waive the 30-day operative delay. In its filing, Nasdaq noted that the proposal would provide a means for firms to comply with regulatory requirements more easily and quickly, and that keeping such information in a centralized, electronic location would enhance Nasdaq’s and FINRA’s oversight of these members. The Commission believes that waiver of the 30-day operative period is consistent with the protection of investors and the public interest. The proposed rule change would allow contact information, utilized for regulatory communications and compliance purposes, among other things, to be more efficiently collected in a centralized location. In addition, the modification of the rule to reflect the new name of the System will add clarity to Nasdaq’s rules. Accordingly, the Commission designates the proposal to be effective upon filing with the Commission.11 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–NASDAQ–2009–109 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. Deputy Secretary. [FR Doc. E9–30062 Filed 12–17–09; 8:45 am] 8 15 sroberts on DSKD5P82C1PROD with NOTICES 9 17 VerDate Nov<24>2008 17:33 Dec 17, 2009 Jkt 220001 [Release No. 34–61140; File No. SR–CBOE– 2009–048] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Approving a All submissions should refer to File Proposed Rule Change Regarding Number SR–NASDAQ–2009–109. This Authority Over C2 Options Exchange, file number should be included on the subject line if e-mail is used. To help the Incorporated Commission process and review your December 10, 2009. comments more efficiently, please use only one method. The Commission will I. Introduction On July 2, 2009, the Chicago Board post all comments on the Commission’s Options Exchange, Incorporated (the Internet Web site (https://www.sec.gov/ ‘‘Exchange’’ or ‘‘CBOE’’) filed with the rules/sro.shtml). Copies of the Securities and Exchange Commission submission, all subsequent (‘‘Commission’’), pursuant to Section amendments, all written statements 19(b)(1) of the Securities Exchange Act with respect to the proposed rule of 1934 (‘‘Act’’) 1 and Rule 19b–4 change that are filed with the thereunder,2 a proposed rule change Commission, and all written relating to CBOE’s authority over C2 communications relating to the Options Exchange, Incorporated (‘‘C2’’), proposed rule change between the Commission and any person, other than a wholly-owned subsidiary of CBOE that has filed with the Commission to those that may be withheld from the register as a self-regulatory organization public in accordance with the (‘‘SRO’’) under Section 6 of the provisions of 5 U.S.C. 552, will be Exchange Act.3 The proposed rule available for inspection and copying in change was published for comment in the Commission’s Public Reference the Federal Register on July 22, 2009.4 Room on official business days between The Commission received no comment the hours of 10 a.m. and 3 p.m. Copies letters on the proposal. This order of the filing also will be available for approves the proposed rule change. inspection and copying at the principal office of Nasdaq. All comments received II. Description On January 21, 2009, CBOE filed an will be posted without change; the application with the Commission Commission does not edit personal seeking registration of a second national identifying information from securities exchange, referred to as C2.5 submissions. You should submit only In connection with that application, information that you wish to make CBOE proposed to adopt a policy to available publicly. All submissions codify the fact that CBOE, upon any should refer to File Number SR– Commission approval of the Form 1 NASDAQ–2009–109 and should be application seeking to establish C2 as a submitted on or before January 8, 2010. registered options exchange, will be For the Commission, by the Division of responsible for ensuring that C2 fulfills Trading & Markets, pursuant to delegated its self-regulatory obligations and will authority.12 have the resources necessary for it to do Florence E. Harmon, so.6 The proposed policy sets forth BILLING CODE 8011–01–P U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires that a self-regulatory organization submit to 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, or such shorter time as designated by the Commission. The Commission notes that Nasdaq has satisfied the five-day pre-filing notice requirement. 10 17 CFR 240.19b–4(f)(6)(iii). 11 For the purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). SECURITIES AND EXCHANGE COMMISSION 12 17 PO 00000 CFR 200.30–3(a)(12). Frm 00132 Fmt 4703 Sfmt 4703 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities and Exchange Act Release No. 59441 (February 24, 2009), 74 FR 9322 (March 3, 2009) (File No. 10–191) (‘‘C2 Notice’’). 4 See Securities Exchange Act Release No. 60307 (July 15, 2009), 74 FR 36289 (‘‘Notice’’). 5 See C2 Notice, supra note 3. 6 The first paragraph of proposed Rule 2.50 reads, in relevant part: C2 Options Exchange, Incorporated (‘‘C2’’) will be and remain a self-regulatory organization registered under Section 6 of the Exchange Act and as such will have statutory authority and responsibility concerning, among other things, the operation of its market and regulation of its members. As the parent company with 100% controlling interest in C2, the Exchange will be responsible for ensuring that C2 meets its obligations as a self-regulatory organization. 2 17 E:\FR\FM\18DEN1.SGM 18DEN1 Federal Register / Vol. 74, No. 242 / Friday, December 18, 2009 / Notices certain principles that will guide CBOE in fulfilling its responsibilities as the parent company of C2 should the Commission grant C2’s application for registration.7 sroberts on DSKD5P82C1PROD with NOTICES III. Discussion and Commission’s Findings After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.8 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,9 which requires, among other things, that that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest, and not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Commission believes that the proposal addresses the role of CBOE in the operation of C2 and sets forth certain important governing principles relating to this responsibility.10 The proposed policy reflects CBOE’s commitment and responsibility to ensure that C2 meets its obligations as an SRO. Specifically, CBOE’s proposed policy represents that it will bear ultimate responsibility for ensuring that C2 meets its statutory obligations. Further, CBOE will ensure that C2 has and appropriately allocates the necessary resources so that C2 can meet those obligations. The Commission believes it is consistent with the Act for CBOE, as parent company and 7 The proposed principles set forth in proposed Rule 2.50 are as follows: 1. The Exchange will exercise its powers and its managerial influence to ensure that C2 fulfills its self-regulatory obligations by: Directing C2 to take action necessary to effectuate its purposes and functions as a national securities exchange operating pursuant to the Exchange Act; and ensuring that C2 has and appropriately allocates such financial, technological, technical, and personnel resources as may be necessary or appropriate to meet its obligations under the Exchange Act. 2. The Exchange will refrain from taking any action with respect to C2 that, to the best of its knowledge, would impede, delay, obstruct, or conflict with efforts by C2 to carry out its selfregulatory obligations under the Exchange Act and the rules and regulations thereunder. 8 In approving this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 9 15 U.S.C. 78f(b)(5). 10 See note 7, supra (setting forth the proposed principles). VerDate Nov<24>2008 17:33 Dec 17, 2009 Jkt 220001 controlling owner of C2, to make these commitments. Further, the Commission notes that the proposed policy is similar to a policy that was formerly adopted by the National Association of Securities Dealers, Inc. in connection with its combination with the American Stock Exchange, Inc.11 IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,12 that the proposed rule change (SR–CBOE–2009– 048) be, and hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–30077 Filed 12–17–09; 8:45 am] BILLING CODE P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61138; File No. SR– NYSEArca–2009–112] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Arca, Inc. To Add Commentary .01 to Rule 6.47 December 10, 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 December 7, 2009, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II 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 proposes to add Commentary .01 to Rule 6.47 to allow hedging stock, security future or futures contract positions to be represented currently with option facilitations or solicitations in the Trading Crowd (‘‘tied hedge’’ orders) based on a 11 See Securities and Exchange Act Release No. 40622 (October 30, 1998), 63 FR 59819 at 59827 (November 5, 1998) (SR–Amex–98–32; SR–NASD– 98–56; SR–NASD–98–67). 12 15 U.S.C. 78s(b)(2). 13 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. PO 00000 Frm 00133 Fmt 4703 Sfmt 4703 67295 recently approved rule change of the Chicago Board Options Exchange (‘‘CBOE’’).4 The text of the proposed rule change is attached as Exhibit 5 to the 19b–4 form. The text of the proposed rule change is available on the Exchange’s Web site at https:// www.nyse.com, on the Commission’s Web site at https://www.sec.gov, at the Exchange’s principal office and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, 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 The Exchange is proposing to add Commentary .01 to Rule 6.47 to allow hedging stock, security future or futures contract positions to be represented currently with option facilitations or solicitations in the Trading Crowd (‘‘tied hedge’’ orders), based on a recently approved rule change of the CBOE. Rule 6.47 generally sets forth the procedures by which a floor broker may cross an order with a contra-side order. Currently, transactions executed pursuant to Rule 6.47 are subject to the restrictions of paragraph (b) of Rule 6.49, Solicited Transactions, which prohibits trading based on knowledge of imminent undisclosed solicited transactions (commonly referred to as ‘‘anticipatory hedging’’). Existing Anticipatory Hedge Rule By way of background, when Rule 6.49 was adopted in 2001, the Exchange noted its belief that it is appropriate to permit solicitation between potential buyers and sellers of options in advance of the time they send actual orders to the trading crowd on the Exchange. The Exchange also noted that, if the orders that comprise a solicited transaction are not suitably exposed to the order 4 See Securities Exchange Act Release No. 60499 (August 13, 2009), 74 FR 42350 (August 21, 2009) (order approving SR–CBOE–2009–007). E:\FR\FM\18DEN1.SGM 18DEN1

Agencies

[Federal Register Volume 74, Number 242 (Friday, December 18, 2009)]
[Notices]
[Pages 67294-67295]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-30077]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61140; File No. SR-CBOE-2009-048]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Order Approving a Proposed Rule Change Regarding 
Authority Over C2 Options Exchange, Incorporated

December 10, 2009.

I. Introduction

    On July 2, 2009, the Chicago Board Options Exchange, Incorporated 
(the ``Exchange'' or ``CBOE'') 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 relating to CBOE's authority over 
C2 Options Exchange, Incorporated (``C2''), a wholly-owned subsidiary 
of CBOE that has filed with the Commission to register as a self-
regulatory organization (``SRO'') under Section 6 of the Exchange 
Act.\3\ The proposed rule change was published for comment in the 
Federal Register on July 22, 2009.\4\ The Commission received no 
comment letters on the proposal. This order approves the proposed rule 
change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities and Exchange Act Release No. 59441 (February 
24, 2009), 74 FR 9322 (March 3, 2009) (File No. 10-191) (``C2 
Notice'').
    \4\ See Securities Exchange Act Release No. 60307 (July 15, 
2009), 74 FR 36289 (``Notice'').
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II. Description

    On January 21, 2009, CBOE filed an application with the Commission 
seeking registration of a second national securities exchange, referred 
to as C2.\5\ In connection with that application, CBOE proposed to 
adopt a policy to codify the fact that CBOE, upon any Commission 
approval of the Form 1 application seeking to establish C2 as a 
registered options exchange, will be responsible for ensuring that C2 
fulfills its self-regulatory obligations and will have the resources 
necessary for it to do so.\6\ The proposed policy sets forth

[[Page 67295]]

certain principles that will guide CBOE in fulfilling its 
responsibilities as the parent company of C2 should the Commission 
grant C2's application for registration.\7\
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    \5\ See C2 Notice, supra note 3.
    \6\ The first paragraph of proposed Rule 2.50 reads, in relevant 
part:
     C2 Options Exchange, Incorporated (``C2'') will be and remain a 
self-regulatory organization registered under Section 6 of the 
Exchange Act and as such will have statutory authority and 
responsibility concerning, among other things, the operation of its 
market and regulation of its members. As the parent company with 
100% controlling interest in C2, the Exchange will be responsible 
for ensuring that C2 meets its obligations as a self-regulatory 
organization.
    \7\ The proposed principles set forth in proposed Rule 2.50 are 
as follows:
     1. The Exchange will exercise its powers and its managerial 
influence to ensure that C2 fulfills its self-regulatory obligations 
by:
     Directing C2 to take action necessary to effectuate its 
purposes and functions as a national securities exchange operating 
pursuant to the Exchange Act; and ensuring that C2 has and 
appropriately allocates such financial, technological, technical, 
and personnel resources as may be necessary or appropriate to meet 
its obligations under the Exchange Act.
     2. The Exchange will refrain from taking any action with 
respect to C2 that, to the best of its knowledge, would impede, 
delay, obstruct, or conflict with efforts by C2 to carry out its 
self-regulatory obligations under the Exchange Act and the rules and 
regulations thereunder.
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III. Discussion and Commission's Findings

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange.\8\ 
In particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act,\9\ which requires, among 
other things, that that the rules of a national securities exchange be 
designed to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system and, in general, to protect investors and the 
public interest, and not be designed to permit unfair discrimination 
between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \8\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that the proposal addresses the role of 
CBOE in the operation of C2 and sets forth certain important governing 
principles relating to this responsibility.\10\ The proposed policy 
reflects CBOE's commitment and responsibility to ensure that C2 meets 
its obligations as an SRO. Specifically, CBOE's proposed policy 
represents that it will bear ultimate responsibility for ensuring that 
C2 meets its statutory obligations. Further, CBOE will ensure that C2 
has and appropriately allocates the necessary resources so that C2 can 
meet those obligations. The Commission believes it is consistent with 
the Act for CBOE, as parent company and controlling owner of C2, to 
make these commitments. Further, the Commission notes that the proposed 
policy is similar to a policy that was formerly adopted by the National 
Association of Securities Dealers, Inc. in connection with its 
combination with the American Stock Exchange, Inc.\11\
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    \10\ See note 7, supra (setting forth the proposed principles).
    \11\ See Securities and Exchange Act Release No. 40622 (October 
30, 1998), 63 FR 59819 at 59827 (November 5, 1998) (SR-Amex-98-32; 
SR-NASD-98-56; SR-NASD-98-67).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\12\ that the proposed rule change (SR-CBOE-2009-048) be, and 
hereby is, approved.
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    \12\ 15 U.S.C. 78s(b)(2).
    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-30077 Filed 12-17-09; 8:45 am]
BILLING CODE P
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