Federal Register / Vol. 74, No. 152 / Monday, August 10, 2009 / Notices 39989 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Commission has determined to 

waive the five-day pre-filing period in this case. 

19 17 CFR 240.19b–4(f)(6). 

20 17 CFR 240.19b–4(f)(6). 

21For 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). 22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 19 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6) 20

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. NYSE requests that the 

Commission waive the 30-day operative 

delay because the Exchange believes 

that the absence of such a rule in an 

automated and fast-paced trading 

environment poses a danger to the 

integrity of the markets and the public 

interest. NYSE notes that immediate 

effectiveness of the proposed rule 

change will immediately and timely 

enable NYSE to cancel or adjust clearly 

erroneous trades that may present a risk 

to the integrity of the equities markets 

and all related markets. The 

Commission believes that waiving the 

30-day operative delay 21 is consistent 

with the protection of investors and the 

public interest because such waiver will 

permit the Exchange to continue 

operation of interim NYSE Rule 128 on 

an uninterrupted basis, and therefore 

designates the proposal operative upon 

filing. 

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–NYSE–2009–79 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–NYSE–2009–79. 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 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–NYSE–2009–79 and should 

be submitted on or before August 31, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–19033 Filed 8–7–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60420; File No. SR–CBOE– 

2009–052] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing of a 

Proposed Rule Change Related to the 

Hybrid Matching Algorithms 

August 3, 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 17, 

2009, the Chicago Board Options 

Exchange, Incorporated (the ‘‘Exchange’’ 

or ‘‘CBOE’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. 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 amend 

Rules 6.45A, Priority and Allocation of 

Equity Option Trades on the CBOE 

Hybrid System, and 6.45B, Priority and 

Allocation of Trades in Index Options 

and Options on ETFs on the CBOE 

Hybrid System, to adopt a modified 

participation entitlement priority 

overlay. The text of the proposed rule 

change is available on the Exchange’s 

Web site (http://www.cboe.org/Legal), at 

the Office of the Secretary, CBOE and at 

the Commission. 

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. 


rmajette on DSK29S0YB1PROD with NOTICES
39990 Federal Register / Vol. 74, No. 152 / Monday, August 10, 2009 / Notices 

3The menu also includes a matching algorithm 

called the Ultimate Matching Algorithm (‘‘UMA’’). 

CBOE is not proposing any changes to the UMA 

matching algorithm at this time. 

4Under the existing participation entitlement, the 

Exchange may determine to grant Market-Makers 

participation entitlements pursuant to the 

provisions of Rules 8.87, Participation Entitlement 

of DPMs and e-DPMs, 8.13, Preferred Market-Maker 

Program, or 8.15B, Participation Entitlement of 

LLMs. More than one such participation 

entitlements may be activated for an option class 

(including at different priority sequences), however 

in no case may more than one participation 

entitlement be applied on the same trade. In 

allocating the participation entitlement, all of the 

following apply: (i) To be entitled to their 

participation entitlement, the Market-Maker’s order 

and/or quote must be at the best price on the 

Exchange. (ii) The Market-Maker may not be 

allocated a total quantity greater than the quantity 

that it is quoting (including orders not part of 

quotes) at that price. If pro-rata priority is in effect, 

and Market-Maker’s allocation of an order pursuant 

to its participation entitlement is greater than its 

percentage share of quotes/orders at the best price 

at the time that the participation entitlement is 

granted, the Market-Maker shall not receive any 

further allocation of that order. (iii) In establishing 

the counterparties to a particular trade, the 

participation entitlement must first be counted 

against that Market-Maker’s highest priority bids or 

offers. (iv) The participation entitlement shall not 

be in effect unless the public customer priority is 

in effect in a priority sequence ahead of the 

participation entitlement and then the participation 

entitlement shall only apply to any remaining 

balance. See Rules 6.45A(a)(ii)(2) and 6.45B(a)(i)(2). 

5For example, assume the matching algorithm for 

an options class is established so that public 

customer orders have first priority, the modified 

participation entitlement has second priority, and 

any remaining balance is allocated using the prorata matching algorithm. If at the time of execution 

there is one or more public customer orders at the 

execution price but none is first in time sequence 

(say because a Market-Maker quote was the first 

trading interest posted at the execution price), then 

the Market-Maker participation entitlement and 

public customer priority overlays would not be 

applied and the incoming order would be allocated 

solely on a pro-rata basis. 

6CBOE has various electronic auctions that are 

described under Rules 6.13A, Simple Auction 

Liaison (‘‘SAL’’), 6.14, Hybrid Agency Liaison 

(HAL), 6.53C(d), Process for Complex Order RFR 

Auction (‘‘COA’’), 6.74A, Automated Improvement 

Mechanism (‘‘AIM’’), and 6.74B, Solicitation 

Auction Mechanism (‘‘AIM SAM’’). Each of these 

auctions generally allocates executions pursuant to 

the matching algorithm in effect for the options 

class with certain exceptions noted in the 

respective rules. For example, no participation 

entitlement is applied to orders executed through 

HAL or AIM. 

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

8 15 U.S.C. 78f(b)(5). 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

CBOE Rules 6.45A and 6.45B set 

forth, among other things, the manner in 

which electronic Hybrid System trades 

in options are allocated. Paragraph (a) of 

each rule essentially governs how 

incoming orders received electronically 

by the Exchange are electronically 

executed against interest in the CBOE 

quote. Paragraph (a) of each rule 

currently provides a ‘‘menu’’ of 

matching algorithms to choose from 

when executing incoming electronic 

orders. The menu format allows the 

Exchange to utilize different matching 

algorithms on a class-by-class basis. The 

menu includes, among other choices, 

price-time and pro-rata priority 

matching algorithms with additional 

priority overlays.3 The priority overlays 

currently include: Public customer 

priority for public customer orders 

resting on the Hybrid System, 

participation entitlements for certain 

qualifying market-makers, and a market 

turner priority for participants that are 

first to improve CBOE’s disseminated 

quote. These overlays are optional. 

The purpose of this rule filing is to 

adopt an additional priority overlay for 

the price-time and pro-rata matching 

algorithms, which the Exchange will 

refer to as the ‘‘modified participation 

entitlement.’’ The modified 

participation entitlement will operate in 

the same manner as the existing 

participation entitlement with a few 

exceptions described below.4 In 

particular, if the modified participation 

entitlement is in effect for an option 

class, then the following would apply: 

• If at the time of execution there are 

no public customer orders resting at the 

execution price, then the Market-Maker 

participation entitlement would be 

applied. This outcome is no change 

from how the existing participation 

entitlement works today. 

• If at the time of execution there is 

a public customer order that was 

entered first in time sequence among all 

other resting trading interest at the 

execution price, then the Market-Maker 

participation entitlement would be 

applied after public customer orders are 

satisfied. This outcome is no change 

from how the existing participation 

entitlement works today. 

• In all other cases involving the 

allocation of an incoming electronic 

order, i.e., if at the time of execution 

there is one or more public customer 

orders resting at the execution price but 

none was entered first in time sequence, 

then the Market-Maker participation 

entitlement and public customer 

priority overlays would not be applied 

to the allocation. This outcome is a 

change from how the existing 

participation entitlement works today.5

• The modified participation 

entitlement would not be used for any 

electronic auctions; instead, the existing 

participation entitlement parameters 

would be applied.6 Thus, the outcome 

would be no change from how the 

existing participation entitlement works 

today for electronic auctions. 

Lastly, it should be noted that, like 

the existing priority overlays, the 

modified participation entitlement is 

optional. As with the existing 

procedures, the Exchange will continue 

to determine whether one or more of the 

priority overlays shall apply to an 

option class and if more than one is 

selected, the sequence in which they 

shall apply (consistent with applicable 

rules). All determinations would be set 

forth in a regulatory circular. 

2. Statutory Basis 

This change will allow the Exchange 

another method to reward aggressive 

pricing in options trading on the Hybrid 

System. Accordingly, CBOE believes 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) 

of the Act 8 in particular in that it is 

designed to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, 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. 

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 the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve such proposed 

rule change, or 


rmajette on DSK29S0YB1PROD with NOTICES
Federal Register / Vol. 74, No. 152 / Monday, August 10, 2009 / Notices 39991 

9 17 CFR 200.30–3(a)(12). 

(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 

No. SR–CBOE–2009–052 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 No. 

SR–CBOE–2009–052. 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 changes 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 office of 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 No. 

SR–CBOE–2009–052 and should be 

submitted on or before August 31, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–19018 Filed 8–7–09; 8:45 am] 

BILLING CODE 8010–01–P 

SMALL BUSINESS ADMINISTRATION 

Reporting and Recordkeeping 

Requirements Under OMB Review 

AGENCY: Small Business Administration. 

ACTION: Notice of Reporting 

Requirements Submitted for OMB 

Review. 

SUMMARY: Under the provisions of the 

Paperwork Reduction Act (44 U.S.C. 

Chapter 35), agencies are required to 

submit proposed reporting and 

recordkeeping requirements to OMB for 

review and approval, and to publish a 

notice in the Federal Register notifying 

the public that the agency has made 

such a submission. 

DATES: Submit comments on or before 

September 9, 2009. If you intend to 

comment but cannot prepare comments 

promptly, please advise the OMB 

Reviewer and the Agency Clearance 

Officer before the deadline. 

Copies: Request for clearance (OMB 

83–1), supporting statement, and other 

documents submitted to OMB for 

review may be obtained from the 

Agency Clearance Officer. 

ADDRESSES: Address all comments 

concerning this notice to: Agency 

Clearance Officer, Jacqueline White, 

Small Business Administration, 409 3rd 

Street, SW., 5th Floor, Washington, DC 

20416; and OMB Reviewer, Office of 

Information and Regulatory Affairs, 

Office of Management and Budget, New 

Executive Office Building, Washington, 

DC 20503. 

FOR FURTHER INFORMATION CONTACT: 

Jacqueline White, Agency Clearance 

Officer, (202) 205–7044. 

SUPPLEMENTARY INFORMATION: 

Title: Application for Small Business 

Size Determination. 

SBA Form Number: 355. 

Frequency: On Occasion. 

Description of Respondents: Small 

Businesses. 

Responses: 600. 

Annual Burden Hours: 2,400. 

Jacqueline White, 

Chief, Administrative Information Branch. 

[FR Doc. E9–19013 Filed 8–7–09; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF TRANSPORTATION 

National Highway Traffic Safety 

Administration 

[U.S. DOT Docket No. NHTSA–2009–0142] 

Reports, Forms, and Recordkeeping 

Requirements 

AGENCY: National Highway Traffic 

Safety Administration (NHTSA), DOT. 

ACTION: Request for public comment on 

proposed collection of information. 

SUMMARY: Before a Federal agency can 

collect certain information from the 

public, it must receive approval from 

the Office of Management and Budget 

(OMB). Under procedures established 

by the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), before seeking 

OMB approval, Federal agencies must 

solicit public comment on proposed 

collections of information, including 

extensions and reinstatements of 

previously approved collections. 

This document describes one 

collection of information for which 

NHTSA intends to seek OMB approval. 

DATES: Comments must be submitted on 

or before October 9, 2009. 

ADDRESSES: Direct all written comments 

to the U.S. Department of 

Transportation Dockets, 1200 New 

Jersey Ave, SE., W46–474, Washington, 

DC 20590. Docket No. NHTSA–2009– 

0142. 

FOR FURTHER INFORMATION CONTACT: 

Scott Roberts, PhD, Contracting Officer’s 

Technical Representative, Office of 

Behavioral Safety Research (NTI–132), 

National Highway Traffic Safety 

Administration, 1200 New Jersey Ave, 

SE., W46–495, Washington, DC 20590. 

Dr. Roberts’ phone number is 202–366– 

5594 and his e-mail address is 

Scott.Roberts@dot.gov. 

SUPPLEMENTARY INFORMATION: 

Under the Paperwork Reduction Act 

of 1995, before an agency submits a 

proposed collection of information to 

OMB for approval, it must publish a 

document in the Federal Register 

providing a 60-day comment period and 

otherwise consult with members of the 

public and affected agencies concerning 

each proposed collection of information. 

The OMB has promulgated regulations 

describing what must be included in 

such a document. Under OMB’s 

regulations (at 5 CFR 1320.8(d)), an 

agency must ask for public comment on 

the following: 

(i) Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 


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