Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Suspension of Seat Market, 28086-28088 [2010-11944]
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28086
Federal Register / Vol. 75, No. 96 / Wednesday, May 19, 2010 / Notices
Gold Shares and ETFS Physical Silver
Shares.5
In its capacity as a ‘‘derivatives
clearing organization’’ registered as such
with the CFTC, OCC is filing this
proposed rule change for prior approval
by the CFTC pursuant to provisions of
the Commodity Exchange Act (‘‘CEA’’)
in order to foreclose any potential
liability under the CEA based on an
argument that the clearing by OCC of
such options as securities options
constitutes a violation of the CEA.
OCC states that the proposed
interpretation of OCC’s By-Laws is
consistent with the purposes and
requirements of Section 17A of the Act 6
because it is designed to promote the
prompt and accurate clearance and
settlement of transactions in securities
options, to foster cooperation and
coordination with persons engaged in
the clearance and settlement of such
transactions, to remove impediments to
and perfect the mechanism of a national
system for the prompt and accurate
clearance and settlement of such
transactions, and, in general, to protect
investors and the public interest. It does
so by reducing the likelihood of a
dispute as to OCC’s treatment of options
based on the CBOE Gold ETF Volatility
Index. The proposed rule change is not
inconsistent with the By-Laws and
Rules of OCC.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
OCC does not believe that the
proposed rule change would impose any
burden on competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
OCC has not solicited or received
written comments relating to the
proposed rule change. OCC will notify
the Commission of any written
comments it receives.
jlentini on DSKJ8SOYB1PROD with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within thirty-five 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
ninety 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:
5 Securities Exchange Act Release No. 61591, 75
FR 9979 (Mar. 4, 2010).
6 15 U.S.C. 78q–1.
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16:07 May 18, 2010
Jkt 220001
(A) By order approve the 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
No. SR–OCC–2010–07 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File No.
SR–OCC–2010–07. 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 Web site viewing and
printing 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 OCC’s principal office and on
OCC’s Web site at https://
www.theocc.com/publications/rules/
proposed_changes/
proposed_changes.jspU. 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 submission
PO 00000
Frm 00108
Fmt 4703
Sfmt 4703
should refer to File No. SR–OCC–2010–
07 and should be submitted on or before
June 9, 2010.
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.7
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010–11940 Filed 5–18–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62095; File No. SR–CBOE–
2010–042]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to Suspension
of Seat Market
May 13, 2010.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (‘‘Act’’
or ‘‘Exchange Act’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that
on May 6, 2010, the Chicago Board
Options Exchange, Incorporated
(‘‘CBOE’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’ or ‘‘SEC’’) the proposed
rule change as described in Items I, II
and III below, which Items have been
prepared by the CBOE. CBOE has filed
the proposal pursuant to Section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b–4(f)(3) thereunder,4 which renders
the proposal effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested parties.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
CBOE proposes to amend its rules
governing the sale and transfer of
Exchange memberships by adding new
Interpretation and Policy .02 to Rule
3.14. The rule proposal is available on
the Exchange’s Web site (https://
www.cboe.org/legal), at the Exchange’s
Office of the Secretary, at the
Commission’s Public Reference Room,
and on the Commission’s Web site at
https://www.sec.gov.
7 17
CFR 200.30–3(a)(12).
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)(3).
1 15
E:\FR\FM\19MYN1.SGM
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Federal Register / Vol. 75, No. 96 / Wednesday, May 19, 2010 / 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,
CBOE 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.
jlentini on DSKJ8SOYB1PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to provide for a fair and
orderly market in shares of common
stock of CBOE Holdings, Inc. (‘‘CBOE
Holdings Common Stock’’) in the unique
circumstances presented during the
brief period, anticipated to be three
business days, between the
commencement of the initial public
offering of such shares and the
effectiveness of the demutualization of
the Exchange. The timetable for the
demutualization of the Exchange and
the public offering of CBOE Holdings
Common Stock is such that, although
the demutualization transaction will
have been approved in a vote of the
Exchange membership prior to the
commencement of the public offering,
the demutualization will not become
effective until just prior to the closing of
the public offering, which is expected to
occur three business days after the
commencement of the offering. This
timetable avoids having to address
difficult administrative issues that
would otherwise arise on account of the
need to issue special ‘‘Class A’’ and
‘‘Class B’’ shares of CBOE Holdings
Common Stock to Exchange
membership owners and to participants
in the settlement of the ‘‘Exercise Right’’
litigation, respectively, upon the
effectiveness of the demutualization.
Upon the closing of the public offering,
both of these special share Classes will
be converted into the same classes of
shares of CBOE Holding Common Stock.
By essentially eliminating the time
interval between the effectiveness of the
demutualization and the closing of the
public offering, the Exchange is able to
avoid difficult issues that would
otherwise have to be addressed as a
result of having both Class A and Class
B shares of CBOE Holdings Common
VerDate Mar<15>2010
16:07 May 18, 2010
Jkt 220001
Stock outstanding prior to just before
the closing of the public offering.
As is customary in underwritten
public offerings, immediately upon the
commencement of the public offering of
shares of CBOE Holdings common stock
the shares will begin to be traded on a
when-issued basis on the exchange
where the shares are listed. However,
because the effectiveness of the
demutualization will not occur until
just before the closing of the public
offering for the reason explained above,
Exchange memberships will continue to
be outstanding concurrently with the
when-issued trading of the same class of
shares into which they will ultimately
be converted. It is essential to the
orderliness of the public offering of
shares of CBOE Holdings Common
Stock and consistent with the ability of
the underwriters to engage in
stabilization transactions in those shares
under Rule 104 of Regulation M under
the Securities Exchange Act of 1934,5
that while there is when-issued trading
in shares of CBOE Holdings Common
Stock in the listed market for these
shares, there must not be an alternative
market in the same class of shares or in
interests that are equivalent to those
shares. If there were to continue to be
a market for Exchange memberships
during this brief period, it would
amount to an alternative market for the
class of shares being offered, since upon
the effectiveness of the demutualization
all outstanding Exchange memberships
will be converted into shares of CBOE
Holdings Common Stock. The Exchange
believes that such a seat market would
be outside of the scope of Regulation
M 6 and the underwriters’ ability to
stabilize the price of the shares being
offered. Accordingly, the existence of
such an alternative market would
jeopardize the orderliness of the public
offering. For this reason, the Exchange
believes that it is necessary to suspend
the operation of the Exchange’s seat
market during this brief period. A rule
change is needed to accomplish this
suspension, since it is for a longer
period than the Board of Directors is
authorized to declare under existing
Interpretation and Policy .01 under
Exchange Rule 3.14.
There should be no adverse
consequences to Exchange members as
a result of suspending the CBOE seat
market for a brief, three-day period.
Before the public offering commences,
and as a condition of the offering, the
demutualization of the Exchange will
have been approved by a vote of the
Exchange membership, although as
5 17
6 17
PO 00000
Frm 00109
Fmt 4703
explained above the demutualization
will not become effective until after the
public offering has been completed and
just prior to its closing. During this
period, the ownership interests in the
Exchange will, for all practical
purposes, be represented by the shares
of CBOE Holdings common stock into
which memberships will be converted
in accordance with the terms and upon
the effectiveness of the demutualization,
which will have been approved by
CBOE’s membership. Once this
happens, Exchange memberships will
cease to exist and the purchase and sale
of Exchange memberships will no
longer be possible. Thus the effect of the
proposed rule change is simply to
accelerate the termination of the seat
market by three days prior to the time
it would have ended in any event.
In the unlikely event that the
demutualization, having been approved
by the membership, does not become
effective as anticipated, the public
offering will not close and Exchange
memberships will remain outstanding.
In that event, the seat market will once
again resume operation, subject only to
the authority of the Board to delay its
resumption for no more than one
business day under existing
Interpretation and Policy .01 of Rule
3.14, if the Board determines that under
the circumstances such a delay is
needed in the interest of a fair and
orderly market in memberships.
2. Statutory Basis
By providing for a fair and orderly
public offering of shares of CBOE
Holdings Common Stock and
eliminating any possibility that the
market in Exchange memberships could
be used to manipulate the when-issued
market in such shares, the proposed rule
change is consistent with Section 6(b) of
the Act 7 in general, and furthers the
objectives of Section 6(b)(5) 8 in
particular, in that it would prevent
fraudulent and manipulative acts and
practices, would promote just and
equitable principles of trade and would
protect investors and the public interest.
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 that is not
necessary or appropriate in furtherance
of the purposes of the Act.
7 15
CFR 242.104.
CFR 242.104.
8 15
Sfmt 4703
28087
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
E:\FR\FM\19MYN1.SGM
19MYN1
28088
Federal Register / Vol. 75, No. 96 / Wednesday, May 19, 2010 / Notices
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
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(iii) of the Act 9 and
subparagraph (f)(3) of Rule 19b–4
thereunder.10 At any time within 60
days of the filing of the 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:
jlentini on DSKJ8SOYB1PROD with NOTICES
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–2010–042 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–2010–042. 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
9 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(3).
10 17
VerDate Mar<15>2010
16:07 May 18, 2010
Jkt 220001
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 Web site viewing and
printing 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–2010–042 and
should be submitted on or before June
9, 2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010–11944 Filed 5–18–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62103; File No. SR–BX–
2010–036]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change To Reduce the
Required Number of Market Makers
Appointed in a Particular Class for the
Opening of Trading
May 13, 2010.
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 May 4,
2010, NASDAQ OMX BX, Inc. (the
‘‘Exchange’’) 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 self-regulatory organization. The
Exchange filed the proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act,3 and Rule 19b–4(f)(6) thereunder,4
which renders the proposal effective
upon filing with the Commission. The
Commission is publishing this notice to
11 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
1 15
PO 00000
Frm 00110
Fmt 4703
Sfmt 4703
solicit comments on the proposed rule
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASDAQ OMX BX, Inc. (the
‘‘Exchange’’) proposes to amend Chapter
IV, Section 5 (Minimum Participation
Requirement for Opening Trading of
Option Classes) of the Rules of the
Boston Options Exchange Group, LLC
(‘‘BOX’’) to reduce the required number
of Market Makers appointed in a
particular class for the opening of
trading in series of an options class from
at least two (2) Market Makers to at least
one (1) Market Maker. The text of the
proposed rule change is attached as
Exhibit 5.5 The text of the proposed rule
change is available from the principal
office of the Exchange, at the
Commission’s Public Reference Room
and also on the Exchange’s Internet Web
site at https://
nasdaqomxbx.cchwallstreet.com/
NASDAQOMXBX/Filings/.
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 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
Chapter IV, Section 5(a) of the BOX
Rules currently provides, in relevant
part, that after a particular class of
options has been approved for listing on
BOX, BOXR 6 will open trading in series
of options in that class only if there are
at least two (2) Market Makers 7
5 The Commission notes that the text of the
proposed rule change is attached as Exhibit 5 to the
Form 19b–4, but is not attached to this Notice.
6 The term ‘‘BOXR’’ or ‘‘BOX Regulation’’ means
Boston Options Exchange Regulation LLC, a
wholly-owned subsidiary of the Exchange. See
Chapter I, Section 1(a)(9) of the BOX Rules.
7 The term ‘‘Market Maker’’ means an Options
Participant registered with the Exchange for the
purpose of making markets in options contracts
traded on the Exchange and that is vested with the
rights and responsibilities specified in Chapter VI
of the BOX Rules. All Market Makers are designated
E:\FR\FM\19MYN1.SGM
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]]>Agencies
[Federal Register Volume 75, Number 96 (Wednesday, May 19, 2010)]
[Notices]
[Pages 28086-28088]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-11944]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62095; File No. SR-CBOE-2010-042]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Relating to Suspension of Seat Market
May 13, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on May 6, 2010, the Chicago Board Options
Exchange, Incorporated (``CBOE'' or ``Exchange'') filed with the
Securities and Exchange Commission (``Commission'' or ``SEC'') the
proposed rule change as described in Items I, II and III below, which
Items have been prepared by the CBOE. CBOE has filed the proposal
pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(3) thereunder,\4\ which renders the proposal effective upon filing
with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested parties.
---------------------------------------------------------------------------
\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)(3).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
CBOE proposes to amend its rules governing the sale and transfer of
Exchange memberships by adding new Interpretation and Policy .02 to
Rule 3.14. The rule proposal is available on the Exchange's Web site
(https://www.cboe.org/legal), at the Exchange's Office of the Secretary,
at the Commission's Public Reference Room, and on the Commission's Web
site at https://www.sec.gov.
[[Page 28087]]
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, CBOE 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
The purpose of the proposed rule change is to provide for a fair
and orderly market in shares of common stock of CBOE Holdings, Inc.
(``CBOE Holdings Common Stock'') in the unique circumstances presented
during the brief period, anticipated to be three business days, between
the commencement of the initial public offering of such shares and the
effectiveness of the demutualization of the Exchange. The timetable for
the demutualization of the Exchange and the public offering of CBOE
Holdings Common Stock is such that, although the demutualization
transaction will have been approved in a vote of the Exchange
membership prior to the commencement of the public offering, the
demutualization will not become effective until just prior to the
closing of the public offering, which is expected to occur three
business days after the commencement of the offering. This timetable
avoids having to address difficult administrative issues that would
otherwise arise on account of the need to issue special ``Class A'' and
``Class B'' shares of CBOE Holdings Common Stock to Exchange membership
owners and to participants in the settlement of the ``Exercise Right''
litigation, respectively, upon the effectiveness of the
demutualization. Upon the closing of the public offering, both of these
special share Classes will be converted into the same classes of shares
of CBOE Holding Common Stock. By essentially eliminating the time
interval between the effectiveness of the demutualization and the
closing of the public offering, the Exchange is able to avoid difficult
issues that would otherwise have to be addressed as a result of having
both Class A and Class B shares of CBOE Holdings Common Stock
outstanding prior to just before the closing of the public offering.
As is customary in underwritten public offerings, immediately upon
the commencement of the public offering of shares of CBOE Holdings
common stock the shares will begin to be traded on a when-issued basis
on the exchange where the shares are listed. However, because the
effectiveness of the demutualization will not occur until just before
the closing of the public offering for the reason explained above,
Exchange memberships will continue to be outstanding concurrently with
the when-issued trading of the same class of shares into which they
will ultimately be converted. It is essential to the orderliness of the
public offering of shares of CBOE Holdings Common Stock and consistent
with the ability of the underwriters to engage in stabilization
transactions in those shares under Rule 104 of Regulation M under the
Securities Exchange Act of 1934,\5\ that while there is when-issued
trading in shares of CBOE Holdings Common Stock in the listed market
for these shares, there must not be an alternative market in the same
class of shares or in interests that are equivalent to those shares. If
there were to continue to be a market for Exchange memberships during
this brief period, it would amount to an alternative market for the
class of shares being offered, since upon the effectiveness of the
demutualization all outstanding Exchange memberships will be converted
into shares of CBOE Holdings Common Stock. The Exchange believes that
such a seat market would be outside of the scope of Regulation M \6\
and the underwriters' ability to stabilize the price of the shares
being offered. Accordingly, the existence of such an alternative market
would jeopardize the orderliness of the public offering. For this
reason, the Exchange believes that it is necessary to suspend the
operation of the Exchange's seat market during this brief period. A
rule change is needed to accomplish this suspension, since it is for a
longer period than the Board of Directors is authorized to declare
under existing Interpretation and Policy .01 under Exchange Rule 3.14.
---------------------------------------------------------------------------
\5\ 17 CFR 242.104.
\6\ 17 CFR 242.104.
---------------------------------------------------------------------------
There should be no adverse consequences to Exchange members as a
result of suspending the CBOE seat market for a brief, three-day
period. Before the public offering commences, and as a condition of the
offering, the demutualization of the Exchange will have been approved
by a vote of the Exchange membership, although as explained above the
demutualization will not become effective until after the public
offering has been completed and just prior to its closing. During this
period, the ownership interests in the Exchange will, for all practical
purposes, be represented by the shares of CBOE Holdings common stock
into which memberships will be converted in accordance with the terms
and upon the effectiveness of the demutualization, which will have been
approved by CBOE's membership. Once this happens, Exchange memberships
will cease to exist and the purchase and sale of Exchange memberships
will no longer be possible. Thus the effect of the proposed rule change
is simply to accelerate the termination of the seat market by three
days prior to the time it would have ended in any event.
In the unlikely event that the demutualization, having been
approved by the membership, does not become effective as anticipated,
the public offering will not close and Exchange memberships will remain
outstanding. In that event, the seat market will once again resume
operation, subject only to the authority of the Board to delay its
resumption for no more than one business day under existing
Interpretation and Policy .01 of Rule 3.14, if the Board determines
that under the circumstances such a delay is needed in the interest of
a fair and orderly market in memberships.
2. Statutory Basis
By providing for a fair and orderly public offering of shares of
CBOE Holdings Common Stock and eliminating any possibility that the
market in Exchange memberships could be used to manipulate the when-
issued market in such shares, the proposed rule change is consistent
with Section 6(b) of the Act \7\ in general, and furthers the
objectives of Section 6(b)(5) \8\ in particular, in that it would
prevent fraudulent and manipulative acts and practices, would promote
just and equitable principles of trade and would protect investors and
the public interest.
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\7\ 15 U.S.C. 78f(b).
\8\ 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 that is not necessary or appropriate in
furtherance of the purposes of the Act.
[[Page 28088]]
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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(iii) of the Act \9\ and subparagraph (f)(3) of Rule 19b-4
thereunder.\10\ At any time within 60 days of the filing of the
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.
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 17 CFR 240.19b-4(f)(3).
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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-2010-042 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-2010-042. 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 Web site viewing and
printing 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-2010-042 and should be
submitted on or before June 9, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010-11944 Filed 5-18-10; 8:45 am]
BILLING CODE 8010-01-P
