Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Expand the Short Term Option Series Program, 8794-8796 [2011-3317]

Download as PDF 8794 Federal Register / Vol. 76, No. 31 / Tuesday, February 15, 2011 / Notices Finally the Exchange submitted a report to the Commission providing an analysis of the Program (the ‘‘Report’’). The Report covered the period from the date of effectiveness of the Program through November 2010, and described the experience of the Exchange with the Program in respect of the options classes included by the Exchange in the Program.4 The Report was submitted on a confidential basis under separate cover. jdjones on DSK8KYBLC1PROD with NOTICES III. Discussion 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.5 Specifically, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act,6 which requires, among other things, that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, 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. The Commission believes that the proposal strikes a reasonable balance between the Exchange’s desire to offer a wider array of investment opportunities and the need to avoid unnecessary proliferation of options series. The Commission expects the Exchange to monitor the trading volume associated with the additional options series listed as a result of this proposal and the effect of these additional series on market fragmentation and on the capacity of the Exchange’s, OPRA’s, and vendors’ automated systems. In approving this proposal, the Commission notes that Exchange has represented that it believes the Exchange and OPRA have the necessary 4 The Report included the following: (1) Data and written analysis on the open interest and trading volume in the classes for which Short Term Option Series were opened; (2) an assessment of the appropriateness of the option classes selected for the Program; (3) an assessment of the impact of the Program on the capacity of the Exchange, OPRA, and market data vendors (to the extent data from market data vendors are available); (4) any capacity problems or other problems that arose during the operation of the Program and how the Exchange addressed such problems; (5) any complaints that the Exchange received during the operation of the Program and how the Exchange addressed them; and (6) any additional information that would assist in assessing the operation of the Program. 5 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 6 15 U.S.C. 78f(b)(5). VerDate Mar<15>2010 15:51 Feb 14, 2011 Jkt 223001 systems capacity to handle the potential additional traffic associated with trading of an expanded number of classes in the Program. the Exchange’s Web site (https:// www.cboe.org/legal), at the Exchange’s principal office, and at the Commission’s Public Reference Room. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,7 that the proposed rule change (SR–Phlx-2010– 183) be, and it hereby is, approved. 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. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–3315 Filed 2–14–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–63877; File No. SR–CBOE– 2011–012] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Expand the Short Term Option Series Program February 9, 2011. 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 January 31, 2011, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange filed the proposal as a ‘‘non-controversial’’ proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder.4 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 CBOE proposes to amend Rules 5.5 and 24.9 to expand the Exchange’s Short Term Option Series Program (‘‘Weeklys Program’’) so that the Exchange may select fifteen option classes on which Weekly options may be opened. The text of the rule proposal is available on 7 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 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)(6). 8 17 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this proposed rule change is to amend Rules 5.5 and 24.9 to expand the Weeklys Program so that the Exchange may select fifteen option classes on which Weekly options may be opened.5 The Weeklys Program is codified in Rule 5.5 and 24.9. These rules provide that after an option class has been approved for listing and trading on the Exchange, the Exchange may open for trading on any Thursday or Friday that is a business day series of options on no more than five option classes that expire on the Friday of the following business week that is a business day. In addition to the five-option class limitation, there is also a limitation that no more than twenty series for each expiration date in those classes that may be opened for trading.6 Furthermore, the strike price of 5 On July 12, 2005, the Commission approved the Weeklys Program on a pilot basis. See Securities Exchange Act Release No. 52011 (July 12, 2005), 70 FR 41451 (July 19, 2005) (SR–CBOE–2004–63). The Weeklys Program was made permanent on April 27, 2009. See Securities Exchange Act Release No. 59824 (April 27, 2009), 74 FR 20518 (May 4, 2009) (SR–CBOE–2009–018). 6 However, if the Exchange opens less than twenty (20) Weekly options for a Weekly Option Expiration Date, additional series may be opened for trading on the Exchange when the Exchange deems it necessary to maintain an orderly market, to meet customer demand or when the market price of the underlying security moves substantially from the exercise price or prices of the series already opened. Any additional strike prices listed by the Exchange shall be within thirty percent (30%) above or below the current price of the underlying security. The Exchange may also open additional strike prices of Weekly Option Series that are more than 30% above or below the current price of the underlying security provided that demonstrated customer interest exists for such series, as E:\FR\FM\15FEN1.SGM 15FEN1 jdjones on DSK8KYBLC1PROD with NOTICES Federal Register / Vol. 76, No. 31 / Tuesday, February 15, 2011 / Notices each Weekly option has to be fixed with approximately the same number of strike prices being opened above and below the value of the underlying security at about the time that the Weekly options are initially opened for trading on the Exchange, and with strike prices being within thirty percent (30%) above or below the closing price of the underlying security from the preceding day. The Exchange does not propose any changes to these additional Weeklys Program limitations. The Exchange proposes only to increase from five to fifteen the number of option classes that may be opened pursuant to the Weeklys Program. The principal reason for the proposed expansion is customer demand for adding, or not removing, Weekly option classes from the Program. Since there is reciprocity in matching other exchange’s Weekly option choices, CBOE discontinues trading Weekly option classes that other exchanges change from week-to-week. CBOE believes that these class pick changes have negatively impacted investors and traders, particularly retail public customers, who have on several occasions requested the Exchange not to remove Weekly option classes or add Weekly option classes. CBOE understands that a retail investor recently requested another exchange to reinstate a Weekly option class that that exchange had removed from trading because of the five-class option limit within the Weekly Program. The investor advised that the removed class was as a powerful tool for hedging a market sector, and that various strategies that the investor put into play were disrupted and eliminated when the class was removed. CBOE feels that it is essential that such negative, potentially very costly impacts on retail investors are eliminated by modestly expanding the Program to enable additional classes to be traded. With regard to the impact of this proposal on system capacity, the Exchange has analyzed its capacity and represents that it and the Options Price Reporting Authority (‘‘OPRA’’) have the necessary systems capacity to handle the potential additional traffic associated with trading of an expanded number of classes in the Weeklys Program. The Exchange believes that the Weeklys Program has provided investors with greater trading opportunities and flexibility and the expressed by institutional, corporate or individual customers or their brokers (market-makers trading for their own account shall not be considered when determining customer interest under this provision). VerDate Mar<15>2010 15:51 Feb 14, 2011 Jkt 223001 ability to more closely tailor their investment and risk management strategies and decisions. Furthermore, the Exchange has had to eliminate option classes on numerous occasions because of the limitation imposed by the Program.7 For these reasons, the Exchange requests an expansion of the current Weeklys Program. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ‘‘Act’’) 8 and the rules and regulations thereunder and, in particular, the requirements of Section 6(b) of the Act.9 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 10 requirements that the rules of an exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, to remove impediments to and to perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest. The Exchange believes that expanding the number of classes eligible to participate in the Weeklys Program will allow the investing public and other market participants to better manage their risk exposure, and would benefit investors by giving them more flexibility to closely tailor their investment decisions in a greater number of securities. While the expansion of the Weeklys Program will generate additional quote traffic, the Exchange does not believe that this increased traffic will become unmanageable since the proposal is limited to a fixed number of classes. Further, the Exchange does not believe that the proposal will result in a material proliferation of additional series because it is limited to a fixed number of classes and the Exchange does not believe that the additional price points will result in fractured liquidity. 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. 7 As discussed above, because of the reciprocity provision of the Weeklys Program, the classes that CBOE lists to participate in the Weeklys Program change when another exchange changes its class selections for the Weeklys Program. 8 15 U.S.C. 78s(b)(1). 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 8795 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 Because the foregoing proposed rule change does not significantly affect the protection of investors or the public interest, does not impose any significant burden on competition, and, by its terms, does not become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 11 and Rule 19b– 4(f)(6) thereunder.12 The Exchange has requested that the Commission waive the 30-day operative delay. The Commission believes that waiver of the operative delay is consistent with the protection of investors and the public interest because the proposal is substantially similar to that of another exchange that has been approved by the Commission.13 Therefore, the Commission designates the proposal operative upon filing.14 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend 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: 11 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange’s 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 Exchange has satisfied this requirement. 13 See Securities Exchange Act Release No. 63875 (February 9, 2011) (SR–Phlx–2010–183) (order approving expansion of Short Term Option Program). 14 For 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). 12 17 E:\FR\FM\15FEN1.SGM 15FEN1 8796 Federal Register / Vol. 76, No. 31 / Tuesday, February 15, 2011 / 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–2011–012 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. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–63878; File No. SR–ISE– 2011–08] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Expand the Short Term Option Series Program February 9, 2011. jdjones on DSK8KYBLC1PROD with NOTICES 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 February 1, 2011, the International Securities All submissions should refer to File Exchange, LLC (‘‘ISE’’ or the ‘‘Exchange’’) Number SR–CBOE–2011–012. This file filed with the Securities and Exchange number should be included on the Commission (‘‘Commission’’) the subject line if e-mail is used. To help the proposed rule change as described in Commission process and review your Items I and II below, which Items have comments more efficiently, please use been prepared by the Exchange. The only one method. The Commission will Commission is publishing this notice to post all comments on the Commission’s solicit comments on the proposed rule Internet Web site (https://www.sec.gov/ change from interested persons. rules/sro.shtml). Copies of the I. Self-Regulatory Organization’s submission, all subsequent Statement of the Terms of Substance of amendments, all written statements the Proposed Rule Change with respect to the proposed rule The Exchange proposes to amend its change that are filed with the rules to expand the Short Term Option Commission, and all written Series Program. The text of the proposed communications relating to the rule change is available on the proposed rule change between the Exchange’s Web site https:// Commission and any person, other than www.ise.com, at the principal office of those that may be withheld from the the Exchange, on the Commission’s Web public in accordance with the site at https://www.sec.gov, and at the provisions of 5 U.S.C. 552, will be Commission’s Public Reference Room. available for Web site viewing and II. Self-Regulatory Organization’s printing in the Commission’s Public Statement of the Purpose of, and Reference Room, 100 F Street, NE., Statutory Basis for, the Proposed Rule Washington, DC 20549, on official Change business days between the hours of 10 In its filing with the Commission, the a.m. and 3 p.m. Copies of the filing also Exchange included statements will be available for inspection and concerning the purpose of, and basis for, copying at the principal office of the the proposed rule change and discussed Exchange. All comments received will any comments it received on the be posted without change; the proposed rule change. The text of these Commission does not edit personal statements may be examined at the identifying information from places specified in Item IV below. The submissions. You should submit only self-regulatory organization has information that you wish to make prepared summaries, set forth in available publicly. All submissions Sections A, B and C below, of the most should refer to File Number SR–CBOE– significant aspects of such statements. 2011–012 and should be submitted on A. Self-Regulatory Organization’s or before March 8, 2011. Statement of the Purpose of, and For the Commission, by the Division of Statutory Basis for, the Proposed Rule Trading and Markets, pursuant to delegated Change 15 authority. Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–3317 Filed 2–14–11; 8:45 am] BILLING CODE 8011–01–P 1. Purpose The purpose of this proposed rule change is to amend ISE Rules 504 and 2009 to expand the Short Term Option 1 15 15 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 15:51 Feb 14, 2011 2 17 Jkt 223001 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00090 Fmt 4703 Sfmt 4703 Series Program (‘‘STOS Program’’) 3 so that the Exchange may select fifteen option classes on which Short Term Option Series may be opened. The STOS Program is codified in Supplementary Material .02 to ISE Rule 504 and Supplementary Material .01 to ISE Rule 2009. These rules state that after an option class has been approved for listing and trading on the Exchange, the Exchange may open for trading on any Thursday or Friday that is a business day series of options on no more than five option classes that expire on the Friday of the following business week that is a business day. In addition to the five-option class limitation, there is also a limitation that no more than twenty series for each expiration date in those classes that may be opened for trading.4 Furthermore, the strike price of each short term option has to be fixed with approximately the same number of strike prices being opened above and below the value of the underlying security at about the time that the short term options are initially opened for trading on the Exchange, and with strike prices being within thirty percent (30%) above or below the closing price of the underlying security from the preceding day. The Exchange does not propose any changes to these additional STOS Program limitations. The Exchange proposes only to increase from five to fifteen the number of option classes that may be opened pursuant to the STOS Program. The principal reason for the proposed expansion is customer demand for 3 Short Term Option Series are series in an option class that is approved for listing and trading on the Exchange in which the series is opened for trading on any Thursday or Friday that is a business day and that expires on the Friday of the next business week. If a Thursday or Friday is not a business day, the series may be opened (or shall expire) on the first business day immediately prior to that Thursday or Friday, respectively. Rules 100(a)(47), 2001(n), Supplementary Material .02 to Rule 504 and Supplementary Material .01 to Rule 2009. 4 However, if the Exchange opens less than twenty (20) short term options for a Short Term Option Expiration Date, additional series may be opened for trading on the Exchange when the Exchange deems it necessary to maintain an orderly market, to meet customer demand or when the market price of the underlying security moves substantially from the exercise price or prices of the series already opened. Any additional strike prices listed by the Exchange shall be within thirty percent (30%) above or below the current price of the underlying security. The Exchange may also open additional strike prices of Short Term Option Series that are more than 30% above or below the current price of the underlying security provided that demonstrated customer interest exists for such series, as expressed by institutional, corporate or individual customers or their brokers (marketmakers trading for their own account shall not be considered when determining customer interest under this provision). Supplementary Material .02(d) to Rule 504 and Supplementary Material .01(d) to Rule 2009. E:\FR\FM\15FEN1.SGM 15FEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 76, Number 31 (Tuesday, February 15, 2011)]
[Notices]
[Pages 8794-8796]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-3317]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63877; File No. SR-CBOE-2011-012]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change to Expand the Short Term Option Series Program

February 9, 2011.
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 January 31, 2011, the Chicago Board Options Exchange,
Incorporated (``CBOE''or the ``Exchange'') filed with the Securities
and Exchange Commission (``SEC'' or ``Commission'') the proposed rule
change as described in Items I and II below, which Items have been
prepared by the Exchange. The Exchange filed the proposal as a ``non-
controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

CBOE proposes to amend Rules 5.5 and 24.9 to expand the Exchange's
Short Term Option Series Program (``Weeklys Program'') so that the
Exchange may select fifteen option classes on which Weekly options may
be opened. The text of the rule proposal is available on the Exchange's
Web site (https://www.cboe.org/legal), 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 purpose of this proposed rule change is to amend Rules 5.5 and
24.9 to expand the Weeklys Program so that the Exchange may select
fifteen option classes on which Weekly options may be opened.\5\
---------------------------------------------------------------------------

\5\ On July 12, 2005, the Commission approved the Weeklys
Program on a pilot basis. See Securities Exchange Act Release No.
52011 (July 12, 2005), 70 FR 41451 (July 19, 2005) (SR-CBOE-2004-
63). The Weeklys Program was made permanent on April 27, 2009. See
Securities Exchange Act Release No. 59824 (April 27, 2009), 74 FR
20518 (May 4, 2009) (SR-CBOE-2009-018).
---------------------------------------------------------------------------

The Weeklys Program is codified in Rule 5.5 and 24.9. These rules
provide that after an option class has been approved for listing and
trading on the Exchange, the Exchange may open for trading on any
Thursday or Friday that is a business day series of options on no more
than five option classes that expire on the Friday of the following
business week that is a business day. In addition to the five-option
class limitation, there is also a limitation that no more than twenty
series for each expiration date in those classes that may be opened for
trading.\6\ Furthermore, the strike price of

[[Page 8795]]

each Weekly option has to be fixed with approximately the same number
of strike prices being opened above and below the value of the
underlying security at about the time that the Weekly options are
initially opened for trading on the Exchange, and with strike prices
being within thirty percent (30%) above or below the closing price of
the underlying security from the preceding day. The Exchange does not
propose any changes to these additional Weeklys Program limitations.
The Exchange proposes only to increase from five to fifteen the number
of option classes that may be opened pursuant to the Weeklys Program.
---------------------------------------------------------------------------

\6\ However, if the Exchange opens less than twenty (20) Weekly
options for a Weekly Option Expiration Date, additional series may
be opened for trading on the Exchange when the Exchange deems it
necessary to maintain an orderly market, to meet customer demand or
when the market price of the underlying security moves substantially
from the exercise price or prices of the series already opened. Any
additional strike prices listed by the Exchange shall be within
thirty percent (30%) above or below the current price of the
underlying security. The Exchange may also open additional strike
prices of Weekly Option Series that are more than 30% above or below
the current price of the underlying security provided that
demonstrated customer interest exists for such series, as expressed
by institutional, corporate or individual customers or their brokers
(market-makers trading for their own account shall not be considered
when determining customer interest under this provision).
---------------------------------------------------------------------------

The principal reason for the proposed expansion is customer demand
for adding, or not removing, Weekly option classes from the Program.
Since there is reciprocity in matching other exchange's Weekly option
choices, CBOE discontinues trading Weekly option classes that other
exchanges change from week-to-week. CBOE believes that these class pick
changes have negatively impacted investors and traders, particularly
retail public customers, who have on several occasions requested the
Exchange not to remove Weekly option classes or add Weekly option
classes.
CBOE understands that a retail investor recently requested another
exchange to reinstate a Weekly option class that that exchange had
removed from trading because of the five-class option limit within the
Weekly Program. The investor advised that the removed class was as a
powerful tool for hedging a market sector, and that various strategies
that the investor put into play were disrupted and eliminated when the
class was removed. CBOE feels that it is essential that such negative,
potentially very costly impacts on retail investors are eliminated by
modestly expanding the Program to enable additional classes to be
traded.
With regard to the impact of this proposal on system capacity, the
Exchange has analyzed its capacity and represents that it and the
Options Price Reporting Authority (``OPRA'') have the necessary systems
capacity to handle the potential additional traffic associated with
trading of an expanded number of classes in the Weeklys Program.
The Exchange believes that the Weeklys Program has provided
investors with greater trading opportunities and flexibility and the
ability to more closely tailor their investment and risk management
strategies and decisions. Furthermore, the Exchange has had to
eliminate option classes on numerous occasions because of the
limitation imposed by the Program.\7\ For these reasons, the Exchange
requests an expansion of the current Weeklys Program.
---------------------------------------------------------------------------

\7\ As discussed above, because of the reciprocity provision of
the Weeklys Program, the classes that CBOE lists to participate in
the Weeklys Program change when another exchange changes its class
selections for the Weeklys Program.
---------------------------------------------------------------------------

2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') \8\ and the rules and
regulations thereunder and, in particular, the requirements of Section
6(b) of the Act.\9\ Specifically, the Exchange believes the proposed
rule change is consistent with the Section 6(b)(5) \10\ requirements
that the rules of an exchange be designed to promote just and equitable
principles of trade, to prevent fraudulent and manipulative acts, to
remove impediments to and to perfect the mechanism for a free and open
market and a national market system, and, in general, to protect
investors and the public interest. The Exchange believes that expanding
the number of classes eligible to participate in the Weeklys Program
will allow the investing public and other market participants to better
manage their risk exposure, and would benefit investors by giving them
more flexibility to closely tailor their investment decisions in a
greater number of securities. While the expansion of the Weeklys
Program will generate additional quote traffic, the Exchange does not
believe that this increased traffic will become unmanageable since the
proposal is limited to a fixed number of classes. Further, the Exchange
does not believe that the proposal will result in a material
proliferation of additional series because it is limited to a fixed
number of classes and the Exchange does not believe that the additional
price points will result in fractured liquidity.
---------------------------------------------------------------------------

\8\ 15 U.S.C. 78s(b)(1).
\9\ 15 U.S.C. 78f(b).
\10\ 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

Because the foregoing proposed rule change does not significantly
affect the protection of investors or the public interest, does not
impose any significant burden on competition, and, by its terms, does
not become operative for 30 days from the date on which it was filed,
or such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6) thereunder.\12\
---------------------------------------------------------------------------

\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's 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
Exchange has satisfied this requirement.
---------------------------------------------------------------------------

The Exchange has requested that the Commission waive the 30-day
operative delay. The Commission believes that waiver of the operative
delay is consistent with the protection of investors and the public
interest because the proposal is substantially similar to that of
another exchange that has been approved by the Commission.\13\
Therefore, the Commission designates the proposal operative upon
filing.\14\
---------------------------------------------------------------------------

\13\ See Securities Exchange Act Release No. 63875 (February 9,
2011) (SR-Phlx-2010-183) (order approving expansion of Short Term
Option Program).
\14\ For 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).
---------------------------------------------------------------------------

At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend 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:

[[Page 8796]]

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-2011-012 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-2011-012. 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 the filing also will be available for
inspection and copying at the principal office of the Exchange. 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-2011-012 and should be
submitted on or before March 8, 2011.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-3317 Filed 2-14-11; 8:45 am]
BILLING CODE 8011-01-P

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