Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 20793 

7 15 U.S.C. 78f(b)(5). 

8 15 U.S.C. 78k–1(a)(1). 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(6)(iii). 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 filing of the proposed rule change, or 

such shorter time as designated by the Commission. 

The Commission notes that the Exchange has 

satisfied this requirement. 

11For 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 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

In particular, the proposed change is 

consistent with Section 6(b)(5) of the 

Act,7 because it would promote just and 

equitable principles of trade, remove 

impediments to, and perfect the 

mechanism of, a free and open market 

and a national market system, and, in 

general, protect investors and the public 

interest. The proposed rule change is 

also designed to support the principles 

of Section 11A(a)(1) 8 of the Act in that 

it seeks to assure fair competition 

among brokers and dealers and among 

exchange markets. The Exchange 

believes that the proposed rule meets 

these requirements in that it promotes 

transparency and uniformity across 

markets concerning reviews of 

potentially clearly erroneous executions 

in various contexts, including reviews 

in the context of a Multi-Stock Event 

involving twenty or more securities and 

reviews resulting from a Trigger Trade 

and any executions occurring 

immediately after a Trigger Trade but 

before a trading pause is in effect on the 

Exchange. Further, the Exchange 

believes that the proposed changes 

enhance the objectivity of decisions 

made by the Exchange with respect to 

clearly erroneous executions. 

B. Self-Regulatory Organization’s 

Statement of Burden on Competition 

The Exchange 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. 

C. Self-Regulatory Organization’s 

Statement on Comments Regarding the 

Proposed Rule Changes Received From 

Members, Participants or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Changes and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) 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 9 and Rule 19b– 

4(f)(6)(iii) thereunder.10 The Exchange 

has asked the Commission to waive the 

30-day operative delay so that the 

proposal may become operative 

immediately upon filing. The 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest because such waiver will 

allow the pilot program to continue 

uninterrupted and help ensure 

uniformity among the national 

securities exchanges and FINRA with 

respect to the treatment of clearly 

erroneous transactions.11 Accordingly, 

the Commission waives the 30-day 

operative delay requirement and 

designates the proposed rule change as 

operative upon filing with the 

Commission. 

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: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–CHX–2011–06 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–CHX–2011–06. 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 (http://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 

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 

publicly available. All submissions 

should refer to File Number SR–CHX– 

2011–06 and should be submitted on or 

before May 4, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8792 Filed 4–12–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64217; File No. SR–CBOE– 

2011–030] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to PAR Official 

Fees 

April 6, 2011. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that, on March 

30, 2011, Chicago Board Options 

Exchange, Incorporated (‘‘CBOE’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

mstockstill on DSKH9S0YB1PROD with NOTICES

20794 Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 

3Currently, CBOE does not have a PAR Official 

available to execute orders in the OEF, OEX, SPX 

and XEO options classes. 4CBOE amended its Fees Schedule in March 

2011 to establish distinct PAR Official Fees for 

Volatility Index Options to eliminate the disparity 

between Floor Brokerage Fees and PAR Official 

Fees assessed in Volatility Index Options. CBOE 

will continue to assess the PAR Official Fees in 

Volatility Index Options established in SR–CBOE– 

2011–022. See Securities Exchange Act Release No. 

64070 (March 11, 2011), 76 FR 15025 (March 18, 

2011) (SR–CBOE–2011–022). 

5See Securities Exchange Act Release No. 67301 

(January 11, 2011), 76 FR 2934 (January 18, 2011) 

(SR–CBOE–2010–116). 

6A PAR Official is an Exchange employee or 

independent contractor whom the Exchange may 

designate as being responsible for (i) operating the 

PAR workstation in a Designated Primary MarketMaker trading crowd with respect to the classes of 

options assigned to him/her; (ii) when applicable, 

maintaining the book with respect to the classes of 

options assigned to him/her; and (iii) effecting 

proper executions of orders placed with him/her. 

The PAR Official may not be affiliated with any 

Trading Permit Holder that is approved to act as a 

Market-Maker. See CBOE Rule 7.12. 

prepared by CBOE. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Chicago Board Options Exchange, 

Incorporated (‘‘CBOE’’ or ‘‘Exchange’’) 

proposes to amend its Fees Schedule to 

establish volume threshold tiers for the 

assessment of PAR Official Fees based 

on the percentage of volume that is 

effected by a PAR Official on behalf of 

an order originating firm or, as 

applicable, an executing firm. The 

proposed volume thresholds will apply 

in all options classes that have a PAR 

Official available to execute orders 

(‘‘PAR Official Classes’’), except 

Volatility Index Options. The text of the 

proposed rule change is available on the 

Exchange’s Web site (http:// 

www.cboe.org/legal), at the Exchange’s 

Office of the Secretary 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, 

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 these statements 

may be examined at the places specified 

in Item IV below. CBOE 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 

CBOE is proposing to amend its Fees 

Schedule effective April 1, 2011 to 

establish volume threshold tiers for the 

assessment of PAR Official Fees in all 

PAR Official Classes 3 other than 

Volatility Index Options.4 CBOE 

amended its Fees Schedule to establish 

PAR Official Fees in January 2011.5

These fees apply to all orders executed 

by a PAR Official,6 except for customer 

orders (‘‘C’’ origin code) that are not 

directly routed to the trading floor (an 

order that is directly routed to the 

trading floor is directed to a PAR 

Official for manual handling by use of 

a field on the order ticket). In classes 

other than Volatility Index Options, 

such orders are currently charged $.02 

per contract and, like floor brokerage 

fees, a discounted rate of $.01 per 

contract applies for crossed orders. 

These fees help to offset the Exchange’s 

costs of providing PAR Official services 

(e.g., salaries, etc). CBOE believes that 

the proposed tier structure will more 

equitably and appropriately assess the 

PAR Official Fees to those Trading 

Permit Holders that rely more heavily 

on PAR Officials to conduct their floor 

brokerage business. Reliance on PAR 

Officials as the primary means of 

execution is inconsistent with the 

Exchange’s intent to provide PAR 

Official services as a supplementary 

means of execution for incidental 

orders. CBOE believes that, after further 

consideration, the existing fee structure 

does not allocate these fees currently to 

take into consideration the amount that 

Trading Permit Holders rely on PAR 

Officials such that those Trading Permit 

Holders that incidentally use PAR 

Officials are assessed the same fee as 

Trading Permit Holders that routinely 

conduct their business through PAR 

Officials and rely heavily on PAR 

Officials for the execution of orders. 

CBOE is proposing to amend the Fees 

Schedule to establish volume threshold 

tiers for the assessment of the PAR 

Official Fees in all PAR Official Classes 

except Volatility Index Options. 

Specifically, CBOE is proposing to 

assess PAR Official Fees based on the 

percentage of an order originating firm’s 

or, as applicable, an executing firm’s 

total monthly volume that is effected by 

a PAR Official during a calendar month. 

The percentage will be calculated on a 

monthly basis by dividing the number 

of contracts executed by PAR Officials 

on behalf of an order originating firm or 

executing firm (as applicable) by the 

total number of contracts executed in 

open outcry (by or on behalf of an order 

originating firm or, as applicable, an 

executing firm) in PAR Official Classes. 

Contracts in Volatility Index Options 

shall be excluded from this calculation. 

The following sets forth the tier levels 

and specific fees that would be assessed 

to orders that are subject to PAR Official 

Fees: 

Tier level 

% Monthly 

volume 

executed 

through 

PAR official 

Standard 

orders 

Crossed 

orders 

(per side) 

1 ............................................................................................................................................................... 0–24.99 N/A N/A 

2 ............................................................................................................................................................... 25–49.99 $.02 $.01 

3 ............................................................................................................................................................... 50–74.99 .03 .015 

4 ............................................................................................................................................................... 75–100 .04 .02 

For example, a Floor Broker Trading 

Permit Holder would be assessed $.02 

for all standard (non-cross) orders and 

$.01 for all crossed orders executed by 

a PAR Official on behalf of the Floor 

Broker during a calendar month if 

25.5% of the Floor Broker Trading 

Permit Holder’s total monthly (open 

outcry) volume in PAR Official Classes 

is executed by a PAR Official (Tier 2). 

The PAR Official Fees compensate 

CBOE for providing overflow services to 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 20795 

7CBOE Rule 6.70 provides: ‘‘A Floor Broker is an 

individual (either a Trading Permit Holder or a 

nominee of a TPH organization) who is registered 

with the Exchange for the purpose, while on the 

Exchange floor, of accepting and executing orders 

received from Trading Permit Holders or from 

registered broker-dealers. A Floor Broker shall not 

accept an order from any other source unless he is 

the nominee of a TPH organization approved to 

transact business with the public in accordance 

with Rule 9.1. In the event the organization is 

approved pursuant to Rule 9.1, a Floor Broker who 

is the nominee of such organization may then 

accept orders directly from public customers where 

(i) the organization clears and carries the customer 

account or (ii) the organization has entered into an 

agreement with the public customer to execute 

orders on its behalf. Among the requirements a 

Floor Broker must meet in order to register pursuant 

to Rule 9.1 is the successful completion of an 

examination for the purpose of demonstrating an 

adequate knowledge of the securities business.’’ 

8See CBOE Fees Schedule, Section 10. 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(4). 

11 15 U.S.C. 78s(b)(3)(A). 

order originating firms or, as applicable, 

executing firms, particularly Floor 

Brokers,7 when they do not have 

personnel available to act as agent. 

Some Trading Permit Holders or TPH 

organizations obtain only one or two 

Floor Broker Trading Permits, making it 

unlikely that, regardless of business 

level, they could cover all locations on 

the Exchange and thus rely on CBOE 

personnel as part of the Floor Broker’s 

daily, ongoing business operations. 

CBOE is proposing to establish volume 

threshold tiers to reduce or eliminate 

PAR Official Fees for those order 

originating firms or executing firms that 

maintain sufficient staff to manage their 

floor brokerage operations and thus, do 

not rely heavily on CBOE personnel to 

execute their orders. CBOE believes that 

those firms that rely heavily on PAR 

Officials to conduct their floor brokerage 

business, such that PAR Officials 

execute more than an incidental number 

of orders on their behalf, may obtain a 

minimum number of Trading Permits to 

access the floor. Thus, these firms 

subsidize their floor brokerage 

operations at CBOE’s expense in that 

PAR Officials are either contractors paid 

by CBOE or CBOE employees. Under the 

current proposal, Trading Permit 

Holders that routinely rely on PAR 

Officials to execute their orders will be 

subject to higher PAR Official Fees as 

CBOE is, in effect, subsidizing their 

floor brokerage operations and going 

beyond the Exchange’s intent to provide 

PAR Official services as a 

supplementary means of execution for 

overflow orders. 

An additional consideration when 

evaluating the equitability of the 

proposed tier structure is the cost of 

each Trading Permit. For example, Floor 

Broker Trading Permit Holders are 

subject to a $6,000 per month Trading 

Permit Fee.8 A Floor Broker Trading 

Permit Holder that requires ten Floor 

Broker Trading Permits to adequately 

staff its business is subject to a cost of 

$60,000 per month for Trading Permit 

Fees (totaling $720,000 per year). By 

comparison, a Trading Permit Holder 

that routes the majority of its orders to 

PAR Officials for execution and 

maintains one Trading Permit is subject 

to a $6,000 per month Trading Permit 

Fee ($72,000 annually). The existing 

PAR Official Fee structure that imposes 

a flat per contract fee does not provide 

an incentive for firms to adequately staff 

their business as each Trading Permit 

Holder is currently assessed the same 

PAR Official Fees. 

As provided above, PAR Officials are 

intended to provide overflow services to 

Trading Permit Holders. CBOE never 

intended PAR Officials to serve as the 

primary means of execution for order 

originating firms or executing firms. 

Heavy reliance on PAR Officials 

subjects the Exchange to the additional 

expense and undue strain of providing 

the additional staffing of PAR Officials. 

CBOE believes that this proposal will 

‘‘level the playing field’’ between those 

Trading Permit Holders that rely 

incidentally on PAR Officials and those 

Trading Permit Holders that rely heavily 

on PAR Officials by basing the PAR 

Official Fees on an order originating 

firm’s or, as applicable, an executing 

firm’s overall reliance on a PAR Official 

to conduct their business. Trading 

Permit Holders that adequately staff 

their business operations and rely 

incidentally on PAR Officials are 

incurring higher costs to retain a 

sufficient number of Trading Permits 

and should not be subject to the same 

amount for PAR Official Fees incurred 

by a Trading Permit Holder that relies 

disproportionately on PAR Officials to 

conduct its floor brokerage business 

because it does not maintain an 

adequate number of Trading Permits to 

conduct its floor brokerage business and 

further, is not subject to the cost of the 

additional Trading Permits required to 

adequately staff its business. 

Based on the data generated for 

January 2011, approximately 40% of 

CBOE Floor Broker Trading Permit 

Holders would fall under Tier 1 and 

would no longer be subject to PAR 

Official Fees. In addition, approximately 

one-third of the Floor Broker Trading 

Permit Holders fall under Tier 4, having 

a PAR Official execute more than 75% 

of the Trading Permit Holder’s total 

monthly volume executed in open 

outcry in PAR Official Classes. The 

proposed volume threshold tiers 

apportion the higher cost to those Floor 

Broker Trading Permit Holders that rely 

heavily on PAR Officials to conduct 

their daily business. For these reasons, 

CBOE believes that the proposed 

implementation of volume threshold 

tiers is appropriate and establishes an 

objective standard for the equitable 

assessment of the PAR Official Fees. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with Section 

6(b) of the Securities Exchange Act of 

1934 (‘‘Act’’), 9 in general, and furthers 

the objectives of Section 6(b)(4) 10 of the 

Act in particular, in that it is designed 

to provide for the equitable allocation of 

reasonable dues, fees, and other charges 

among its trading permit holders and 

other persons using its facilities. The 

Exchange believes the proposed change 

is equitable, reasonable and not unfairly 

discriminatory, in that, in general, PAR 

Official Fees are intended to help the 

Exchange recover its costs of providing 

PAR Official services to Trading Permit 

Holders and the proposed change is 

intended to reasonably allocate such 

costs to order originating firms and 

executing firms based on the amount of 

business they conduct through PAR 

Officials. Specifically, the proposed fee 

tier structure is equitable in that all 

order originating firms or, as applicable, 

executing firms, are assessed the same 

fees at each tier level for orders 

executed by a PAR Official. Further, the 

proposed fee structure is not unfairly 

discriminatory because the tiers are 

based on the percentage of activity 

executed by a PAR Official. Each firm 

has the ability to route fewer orders to 

a PAR Official, such that they are not 

subject to higher PAR Official Fees. 

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 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 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 11 and subparagraph (f)(2) of 

mstockstill on DSKH9S0YB1PROD with NOTICES

20796 Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 

12 17 CFR 240.19b–4(f)(2). 

13 17 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). 

5Securities Exchange Act Release Nos. 62886 

(September 10, 2010), 75 FR 56613 (September 16, 

2010) (SR–CBOE–2010–056) (approval order 

establishing pilot through December 10, 2010) and 

63485 (December 9, 2010), 75 FR 78278 (December 

15, 2010) (SR–CBOE–2010–113) (extension of pilot 

through April 11, 2011). 

6 ‘‘Circuit Breaker Stocks’’ means the stocks 

included in the S&P 500 Index, the Russell 1000 

Index, as well as a pilot list of Exchange Traded 

Rule 19b–4 12 thereunder. 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: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–CBOE–2011–030 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–2011–030. 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 (http://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– 

2011–030 and should be submitted on 

or before May 4, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8791 Filed 4–12–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64227; File No. SR–CBOE– 

2011–032] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Related to the Extension 

of a CBSX Clearly Erroneous Policy 

Pilot Program 

April 7, 2011. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on March 31, 

2011, the Chicago Board Options 

Exchange, Incorporated (‘‘Exchange’’ or 

‘‘CBOE’’) filed with the Securities and 

Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange has 

designated the proposal as a ‘‘noncontroversial’’ 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 

The Exchange proposes to extend a 

clearly erroneous policy pilot program 

pertaining to the CBOE Stock Exchange 

(‘‘CBSX’’, the CBOE’s stock trading 

facility). This rule change simply seeks 

to extend the pilot. No other changes to 

the pilot are being proposed. The text of 

the proposed rule change is available on 

the Exchange’s Web site (http:// 

www.cboe.org/Legal), at the Exchange’s 

Office of the Secretary 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 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of 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 

Certain amendments to Rule 52.4, 

Clearly Erroneous Policy, were approved 

by the Commission on September 10, 

2010 on a pilot basis. The pilot is 

currently set to expire on April 11, 

2011.5 The clearly erroneous policy 

changes were developed in consultation 

with other markets and the Commission 

staff to provide for uniform treatment: 

(i) Of clearly erroneous execution 

reviews in Multi-Stock Events involving 

twenty or more securities; and (ii) in the 

event transactions occur that result in 

the issuance of an individual stock 

trading pause by the primary market 

and subsequent transactions that occur 

before the trading pause is in effect on 

the Exchange. Additional changes were 

also made to Rule 52.4 that reduce the 

ability of the Exchange to deviate from 

the objective standards set forth in the 

Rule. As the duration of the pilot 

expires on April 11, 2011, the Exchange 

is proposing to extend the effectiveness 

of the clearly erroneous policy changes 

to Rule 52.4 through the earlier of 

August 11, 2011 or the date on which 

a limit up-limit down mechanism to 

address extraordinary market volatility, 

if adopted, applies to the Circuit Breaker 

Stocks as defined in Rule 6.3C, 

Individual Stock Trading Pause Due to 

Extraordinary Market Volatility.6

mstockstill on DSKH9S0YB1PROD with NOTICES