Federal Register / Vol. 74, No. 145 / Thursday, July 30, 2009 / Notices 38071 

6 15 U.S.C. 78s(b)(3)(A)(ii). 

7 17 CFR 240.19b–4(f)(2). 

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Rel. No. 34–54987 

(December 20, 2006), 71 FR 78481 (December 29, 

2006) (SR–CBOE–2006–107). 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The proposed rule change is 

designated by the Exchange as 

establishing or changing a due, fee, or 

other charge, thereby qualifying for 

effectiveness on filing pursuant to 

Section 19(b)(3)(A)(ii) 6 of the Act and 

subparagraph (f)(2) of Rule 19b–4 7

thereunder. 

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: 

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–2009–044 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–CBOE–2009–044. 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 inspection and copying in 

the Commission’s Public Reference 

Room 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 

available publicly. All submissions 

should refer to File Number SR–CBOE– 

2009–044 and should be submitted on 

or before August 20, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–18167 Filed 7–29–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60375; File No. SR–CBOE– 

2009–047] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing of 

Proposed Rule Change, as Modified by 

Amendment No. 1, Regarding the 

CBSX Floor Post 

July 23, 2009. 

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 July 2, 

2009, the Chicago Board Options 

Exchange, Incorporated (‘‘CBOE’’ or 

‘‘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 

prepared by the Exchange. On July 23, 

2009, the Exchange filed Amendment 

No. 1, which replaced the original filing 

in its entirety. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change, 

as amended, from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The filing proposes to modify the 

CBOE Stock Exchange (‘‘CBSX’’) Rules 

to allow all CBSX Market-Maker types 

to operate from the Floor Post. 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 

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 

CBSX is an all electronic stock 

marketplace. One of the reasons CBOE 

created CBSX was to try to capture some 

of the sizable stock trading done by 

CBOE options traders. CBOE members 

trade stock both as a hedging vehicle for 

option trades done on CBOE and in 

connection with trading complex orders 

that contain stock and option 

components (e.g. a buy-write). Thus, it 

was always envisioned that traders on 

CBOE’s trading floor would trade stock 

on CBSX. All CBOE members are 

eligible to trade on CBSX without 

incurring any extra costs or completing 

lengthy ‘‘membership’’ applications. 

CBOE also created a limited number of 

CBSX Trading Permits to allow 

potential non-CBOE member users that 

do not want to incur the significant 

costs associated with buying or leasing 

a CBOE membership to trade on CBSX.3

These Permit Holders are not allowed to 

trade options on CBOE. 

To help generate interest in CBSX 

with the CBOE trading floor community, 

the Exchange established the CBSX 

Floor Post. The Floor Post is a location 

on the CBOE trading floor where CBSX 

Designated Primary Market-Maker 

(‘‘DPM’’) personnel can be stationed to 

respond to stock price discovery 

requests from CBOE’s trading floor 

community. As part of CBSX’s approval, 

the Exchange was asked to physically 

separate the CBSX Floor Post from the 

options trading posts (i.e. eliminate 

sightlines between the Floor Post and 


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38072 Federal Register / Vol. 74, No. 145 / Thursday, July 30, 2009 / Notices 

4Side-by-side trading concerns originated in 

connection with open outcry trading on exchange 

trading floors (i.e., they pre-date the advent of allelectronic exchanges). 

5No CBSX DPMs are situating personnel at the 

Floor Post at this time. It is empty. 

6See SR–CBOE–2009–044. 

7 15 U.S.C. 78s(b)(1). 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(5). 10 17 CFR 200.30–3(a)(12). 

any equity option trading posts). This 

request was made to avoid any potential 

issues related to ‘‘side-by-side trading’’ 

which involves a stock trading location 

situated in close and open physical 

proximity to a location where a 

derivative on that stock (e.g., an option) 

is traded.4 The Rule governing the CBSX 

Floor Post is Rule 51.12. 

The Exchange now proposes to 

modify Rule 51.12 to permit all CBSX 

Market-Makers types to utilize the Floor 

Post. Currently, the Rule provides that 

only CBSX DPMs may operate from the 

Floor Post (brokers are also permitted to 

enter the Floor Post area).5 Recently, 

however, CBSX has received requests 

from CBSX Market-Makers seeking to 

operate from the Floor Post. This filing 

would allow them to do so. The Floor 

Post continues to restrict any sightlines 

to the equity option trading posts. Also, 

the CBSX Fees Schedule has been 

amended to include a fee for CBSX 

Market-Makers using the CBSX Floor 

Post. 

The Exchange has also received 

inquiries from CBSX Trading Permit 

Holders that act in the capacity of CBSX 

Brokers to operate from CBOE’s trading 

floor. Many current CBOE members 

(including Floor Brokers) execute stock 

orders on CBSX from the trading floor. 

Trading Permit Holders on the CBOE 

trading floor would enter orders on 

CBSX just like any other user on the 

CBOE trading floor. The only difference 

is that CBSX Trading Permit holders are 

not allowed to trade options (and have 

not incurred the costs associated with 

CBOE membership). The Exchange has 

established a fee for Trading Permit 

Holders that operate on CBOE’s trading 

floor from a perimeter booth (these 

booths, which are typically occupied by 

CBOE Floor Brokers, are located around 

the perimeter of the trading floor).6

It is possible that no CBSX Trading 

Permit Holders (whether they are CBSX 

Market-Maker or CBSX Brokers) 

ultimately decide to establish a physical 

operation on the CBOE trading floor. 

However, to the extent that they do, any 

CBSX Market-Making would be limited 

to operating from the CBSX Floor Post, 

while CBSX Brokers would be allowed 

to establish operations at perimeter 

booths. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 7 and the rules and regulations 

thereunder and, in particular, the 

requirements of Section 6(b) of the Act.8

Specifically, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 9 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. Permitting CBSX Market 

Makers to use the CBSX Floor Post 

along with Floor Brokers and CBSX 

DPM personnel promotes just and 

equitable principles of trade and 

removes impediments to and perfects 

the mechanism for a free and open 

market. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE does not believe that the 

proposed rule change will impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding, or 

(ii) as to which NYSE consents, the 

Commission will: 

(A) By order approve such proposed 

rule change; or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

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

Number SR–CBOE–2009–047 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–CBOE–2009–047. 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 inspection and copying 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 offices 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–2009–047 and 

should be submitted on or before 

August 20, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–18166 Filed 7–29–09; 8:45 am] 

BILLING CODE 8010–01–P 


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