41950 Federal Register / Vol. 74, No. 159 / Wednesday, August 19, 2009 / Notices 

1See Release No. 34–60107 (June 12, 2009); 74 FR 

29091 (June 18, 2009). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60497; File No. PCAOB– 

2008–04] 

Public Company Accounting Oversight 

Board; Order Approving Proposed 

Rules on Annual and Special 

Reporting by Registered Public 

Accounting Firms 

August 13, 2009. 

I. Introduction 

On June 10, 2008, the Public 

Company Accounting Oversight Board 

(the ‘‘Board’’ or the ‘‘PCAOB’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’ or 

‘‘SEC’’) proposed rules (File No. 

PCAOB–2008–04) on annual and special 

reporting by registered public 

accounting firms, pursuant to Section 

107 of the Sarbanes-Oxley Act of 2002 

(the ‘‘Act’’). Notice of the proposed rules 

was published in the Federal Register 

on June 18, 2009.1 The Commission 

received four comment letters relating to 

this rule proposal. For the reasons 

discussed below, the Commission is 

granting approval of the proposed rules. 

II. Description 

On June 10, 2008, the Board adopted 

rules and submitted to the Commission 

a rule proposal consisting of eight new 

rules (PCAOB Rules 2200–2207) 

concerning annual and special reporting 

by registered public accounting firms, 

instructions to two forms to be used for 

such reporting (Form 2 and Form 3), 

and related amendments to existing 

Board rules. The proposed rules would 

establish the foundation of a reporting 

and disclosure system for registered 

public accounting firms pursuant to 

Section 102(d) of the Act, specify the 

details of certain reporting obligations, 

and provide forms for such reporting. 

To the extent that the Board identifies 

additional reporting requirements that 

are necessary or appropriate in the 

public interest or for the protection of 

investors, the Board may propose and 

adopt them in the future. 

According to the Board, the proposed 

reporting requirements serve three 

fundamental purposes. First, firms will 

report information to keep the Board’s 

records current about such basic matters 

as the firm’s name, location, contact 

information, and licenses. Second, firms 

will report information reflecting the 

extent and nature of the firm’s audit 

practice related to issuers in order to 

facilitate analysis and planning related 

to the Board’s inspection 

responsibilities and to inform other 

Board functions, as well as for the value 

the information may have to the public. 

Third, firms will report circumstances 

or events that could merit follow-up 

through the Board’s inspection process 

or its enforcement process, and that also 

may otherwise warrant being brought to 

the public’s attention (such as a firm’s 

withdrawal of an audit report in 

circumstances where the information is 

not otherwise publicly available). 

The reporting framework includes 

two types of reporting obligations. First, 

it requires each registered firm to 

provide basic information once a year 

about the firm and the firm’s issuerrelated practice over the most recent 12- 

month period. The firm must do so by 

filing an annual report on Form 2. 

Second, upon the occurrence of 

specified events, a firm must report 

certain information by filing a special 

report on Form 3. 

Proposed Rule 2201 sets June 30 as 

the deadline for the annual filing of 

Form 2. The reporting period covered by 

the report would be April 1 to March 31, 

leaving each firm with three months to 

prepare and file a Form 2 reflecting 

information from that 12-month period. 

Any firm that was registered as of March 

31 of a particular year would be 

required to file Form 2 by June 30 of 

that year, but any firm that became 

registered in the period between and 

including April 1 and June 30 would 

not be required to file a Form 2 until 

June 30 of the following year. 

Under the proposed rules, the 

occurrence of specified events triggers 

an obligation to file a special report on 

Form 3. The proposed rules provide that 

special reports must be filed within 30 

days of the triggering event or a firm’s 

awareness of a triggering event. 

The Board expects annual and special 

reports to be complete and accurate, and 

inaccuracies or omissions could form 

the basis for disciplinary sanctions for 

failing to comply with the reporting 

requirements reflected in Rules 2200 

and 2203 and the instructions to Forms 

2 and 3. Proposed Rule 2205 provides 

for the filing of amendments to 

previously filed annual or special 

reports if the originally filed report 

included information that was incorrect 

at the time of the filing, or if the 

originally filed form omitted any 

information or affirmation that was, at 

the time of such filing, required to be 

included in that report. 

Annual and special reports will be 

made public on the Board’s Web site 

promptly upon being filed by a firm, 

subject to exceptions for information for 

which a firm requests confidential 

treatment. The Board intends that as 

much reported information as possible 

be publicly available as soon as possible 

after filing. 

The proposed forms identify certain 

categories of information for which a 

firm may request confidential treatment. 

The proposed rules include new 

requirements effected through 

amendments to PCAOB Rule 2300 

concerning the support that a firm must 

supply to support a confidential 

treatment request. The proposed 

amendments require that a firm support 

a request with both a representation that 

the information has not otherwise been 

publicly disclosed and either (1) a 

detailed explanation of the grounds on 

which the information is considered 

proprietary, or (2) a detailed explanation 

of the basis for asserting that the 

information is protected by law from 

public disclosure and a copy of the 

specific provision of law. The proposed 

amendments also provide that the firm’s 

failure to supply the required support 

constitutes sufficient grounds for denial 

of the request. 

Under proposed Rule 2207, a nonU.S. firm may withhold required 

information from Form 2 or Form 3 if 

the firm cannot provide the information 

without violating non-U.S. law. If the 

firm withholds information on that 

ground, it must have certain supporting 

materials, including (1) a copy of the 

relevant provisions of non-U.S. law, (2) 

a legal opinion concluding that the firm 

would violate non-U.S. law by 

submitting the information to the Board, 

and (3) a written explanation of the 

firm’s efforts to seek consents or waivers 

that would be sufficient to overcome the 

conflict with respect to the information. 

The firm must certify on the form that 

it has the supporting materials in its 

possession. The rule reserves to the 

Board, and to the Director of the 

Division of Registration and Inspections, 

the discretion to require that a firm 

submit any of those supporting 

materials in a particular case. The rule 

also reserves to the Board the discretion 

to require that the firm provide any of 

the withheld information in a particular 

case. 

The proposed rules include an 

amendment to the Board’s inspection 

rules that makes clear that the Board 

may require a firm to provide additional 

information. Specifically, existing Rule 

4000 provides that registered firms shall 

be subject to such regular and special 

inspections as the Board chooses to 

conduct. The proposed amendment 

adds a paragraph providing that the 

Board, in the exercise of its inspection 

authority, may at any time request that 

a registered firm provide additional 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 74, No. 159 / Wednesday, August 19, 2009 / Notices 41951 

2See comments of Deloitte and Touche LLP 

(‘‘Deloitte’’), Ernst & Young LLP (‘‘E&Y’’), KPMG 

International (‘‘KPMG’’), and 

PricewaterhouseCoopers LLP (‘‘PwC’’). 

3See comments of Deloitte, E&Y, and KPMG. 

information or documents relating to 

information provided on Form 2 or 

Form 3, or relating to information that 

has otherwise come to the Board’s 

attention. The amendment provides that 

the request and response are considered 

to be in connection with the firm’s next 

regular or special inspection. 

Accordingly, the cooperation 

requirements of Rule 4006 apply, and 

the request and response are subject to 

the confidentiality restrictions of 

Section 105(b)(5) of the Act. 

The proposed amendments to Rule 

2300(b)–(c), concerning the required 

support, would also apply prospectively 

to confidential treatment requests on 

applications for registration on Form 1. 

Existing Rule 2107 governs the 

process by which a firm may seek to 

withdraw from registration with the 

Board. Under Rule 2107, a firm cannot 

withdraw at will, but must request the 

Board’s permission to withdraw, and 

the Board may withhold that permission 

under certain conditions. The proposed 

rules include an amendment to Rule 

2107 to change the way it addresses the 

reporting obligations of a firm that has 

filed Form 1–WD seeking leave to 

withdraw. Existing Rule 2107(c)(2)(i) 

provides that, beginning on the fifth day 

after the Board receives a completed 

Form 1–WD, the firm can satisfy any 

annual reporting requirement by 

submitting a report stating that a 

completed Form 1–WD has been filed 

and is pending. Under the proposed 

amendment, the firm’s reporting 

obligation, including both annual and 

special reporting, would simply be 

suspended while Form 1–WD was 

pending. If a firm withdraws its Form 1– 

WD and continues as a registered firm, 

however, Rule 2107 would require the 

filing of any annual or special reports, 

and the payment of any annual fee, that 

otherwise would have been required 

while the Form 1–WD was pending. The 

Board is also eliminating from Rule 

2107 the five-day delay between receipt 

of a completed Form 1–WD and the 

effect of that filing on a firm’s reporting 

obligation. Suspension of that obligation 

would occur immediately upon the 

Board’s receipt of the completed Form 

1–WD. 

The Board also proposed to delete 

from definitions in PCAOB Rule 1001 

certain provisions that ceased to apply 

after December 15, 2003. Specifically, 

the Board proposes to amend Rules 

1001(a)(vii) (definition of ‘‘audit 

services’’), 1001(o)(i) (definition of 

‘‘other accounting services’’), and 

1001(n)(ii) (definition of ‘‘tax services’’) 

by deleting the paragraph denominated 

‘‘(1)’’ from each rule. 

The proposed rules would take effect 

60 days after Securities and Exchange 

Commission approval. 

III. Discussion 

A. Comments Received 

The Commission received four 

comment letters relating to the rule 

proposal. All four of the comment 

letters came from registered public 

accounting firms.2

Each of the commenters expressed 

support for the overall purpose of the 

Board’s rules. However, similar to the 

comments made to the PCAOB during 

its comment period, the commenters 

raised several main concerns related to: 

(1) Provisions of proposed PCAOB Rule 

2107 that relate to assertions of conflicts 

with non-U.S. laws; (2) Form 3 

triggering events that depend on the 

firm’s awareness; (3) the requirement 

that registered public accounting firms 

file with the PCAOB a Form 3 for 

withdrawn audit reports; (4) the 

reporting on Form 3 of the dates of 

registered public accounting firms’ 

consents to the use of previously issued 

audit reports; and (5) the Board’s 

differing approach in Forms 2 and 3 for 

reporting the engagement of consultants 

or professionals subject to PCAOB/SEC 

discipline. 

1. Assertions of Conflicts With Non-U.S. 

Laws 

Some commenters expressed concerns 

about the proposed requirement for nonU.S. firms to gather and maintain 

certain information. Proposed Rule 

2207(c)(1) would require non-U.S. firms 

to gather and maintain, for a period of 

seven years, the information required by 

Forms 2 and 3 that the non-U.S. firm 

asserts is unable to submit because of a 

conflicting local law. Some commenters 

observed that this requirement may 

cause problems for non-U.S. firms 

because in some jurisdictions there may 

be privacy or other laws that would 

preclude registered firms from gathering 

the information necessary to complete 

Form 3.3

All of the commenters expressed 

concerns about the discretion afforded 

the Board in proposed Rule 2207(e) that 

would allow the Board to request a nonU.S. firm to file information withheld 

under proposed Rule 2207(c)(1) based 

on an asserted conflict with non-U.S. 

law. Each commenter recognized that 

although the Board stated in its 

adopting release that it does not foresee 

invoking proposed Rule 2207(e) with 

any regularity, the commenters believe 

that where applied, it could be of 

significant concern to non-U.S. firms. 

According to the commenters, the 

concern rests on the fact that if the 

Board invoked Rule 2207(e), a non-U.S. 

firm could be put in an untenable 

situation where it would have to choose 

between breaching its reporting 

obligations under the PCAOB’s rules 

and violating its home jurisdiction’s 

laws. 

The Board addressed these concerns 

in its adopting release. In that release, 

the Board asserted that the requirement 

for a firm to have in its possession a 

version of Form 2 or Form 3 that 

includes the information that the firm 

would be required to report in absence 

of a legal conflict imposes no greater 

burden on a non-U.S. firm than on a 

U.S. firm that actually reports the 

information. The Board further stated 

that the opportunity to assert a legal 

conflict is an accommodation in light of 

the possibility that a firm may believe 

it is caught stuck between competing 

legal requirements. 

The Board also stated that a firm 

should not assume that its mere 

assertion of a conflict resolves the 

matter, and that there is no reason for 

the Board to provide that a firm need 

not even have assembled the 

information, in the form in which any 

other firm would have to assemble it, 

before asserting that non-U.S. law 

precludes it from disclosing the 

particular information it is withholding. 

Lastly, and as one of the commenters 

pointed out, the Board specifically 

addressed this issue by adding a note to 

Rule 2207(c)(1) to provide that the 

materials maintained by the firm do not 

need to include any information (1) that 

the firm does not possess, and (2) as to 

which the firm asserts that the firm 

would violate non-U.S. law by requiring 

another person to provide the 

information to the firm. 

As the commenters noted, the Board 

explained at length its purpose and 

intended administration of Rule 2207(e). 

The Board noted that its position is not 

dissimilar from the same situation it 

faces in the registration context. The 

Commission is not aware of any 

instances or concerns in the registration 

context in which the PCAOB has acted 

unreasonably with regard to conflicts 

with non-U.S. laws that were raised by 

non-U.S. firms. 

The Commission believes the Board’s 

responses to these comments are not 

unreasonable. The Commission 

presumes that the Board will continue 

to exercise reasonable judgment and 

discretion in considering conflicts with 


jlentini on DSKJ8SOYB1PROD with NOTICES
41952 Federal Register / Vol. 74, No. 159 / Wednesday, August 19, 2009 / Notices 

4The Commission also notes that the Board has 

been willing to provide further implementation 

guidance where necessary to explain its 

administration of similar requirements. See http:// 

www.pcaob.org/Registration/2004-03-11_FAQ.pdf. 

5See comments of E&Y, KPMG, and PwC. 

6See comments of PwC. 

7See comments of Deloitte and PwC. 

8See comments of KPMG and Deloitte. 

non-U.S. laws that are raised in 

connection with the completion of a 

Form 2 or Form 3 as it has for the past 

six years with respect to similar issues 

in the registration context.4

2. Firm Awareness of Form 3 Triggering 

Events 

Certain items reported in Form 3 

describe events that a firm must report 

to the Board within 30 days after the 

firm has become aware of certain facts. 

The Form provides that the firm is 

deemed to have become aware of the 

relevant facts on the date that any 

partner, shareholder, principal, owner, 

or member of the firm first becomes 

aware of the facts. 

All commenters expressed concern 

that triggering the reporting requirement 

based on the awareness of any one of 

the large number of people who fall into 

the definition provided by the Board, 

especially if they are not part of senior 

management, would be burdensome. 

Several of these commenters observed 

that, in response to the proposed rules, 

firms would put in place policies and 

procedures requiring reportable 

information be reported to the persons 

in the organization responsible for 

compliance with the rules. Because of 

their view that firms would put the 

necessary policies and procedures in 

place, these commenters recommended 

that the Commission encourage the 

PCAOB to consider issuing guidance 

providing that a registered firm will not 

be considered out of compliance with a 

reporting obligation if there is an 

inadvertent failure to follow internal 

procedures that are designed in good 

faith to effectuate reporting. 

Similar comments were originally 

raised to the Board in connection with 

the Board’s original proposal of the 

annual and special reporting rules. After 

consideration of the comments received, 

the Board narrowed the Form 3 

reporting requirements as to the 

reportable events and clarified the 

‘‘deemed aware’’ standard as to which 

persons are covered. In addition, the 

Board stated it believes it is reasonable 

to expect a firm to have controls 

designed to ensure that any such person 

who becomes aware of relevant facts 

understands the firm’s reporting 

obligation and brings the matter to the 

attention of persons responsible for 

compliance with the obligation. 

We agree. This matter is not 

dissimilar to the need for issuers to 

maintain appropriate disclosure and 

controls and procedures to meet their 

reporting obligations, including for 

current reporting on Form 8–K that is on 

a much shorter timeframe than Form 3 

reporting. Those procedures include 

those to ensure that information is 

accumulated and communicated to the 

appropriate personnel to allow timely 

disclosure. This matter also is not 

dissimilar to a registered public 

accounting firm’s existing obligations 

under the Commission’s and the 

PCAOB’s auditor independence 

requirements, which in many instances 

reaches down to obligations involving 

members of an engagement team below 

a partner level. Lastly, as to when it 

would be appropriate for the Board to 

take disciplinary action for reporting 

violations, the Commission assumes the 

Board will continue to exercise its 

discretion as to whether disciplinary 

action is warranted under the particular 

facts and circumstances. 

3. Disclosure of the Dates of Consents of 

Audit Reports 

Under the proposed rules, firms 

would be required to report on Form 2 

the dates of any consent to an issuer’s 

use of an audit report the firm 

previously issued to that issuer, if such 

consent constitutes the only instance of 

the firm issuing an audit report for that 

issuer during the reporting period. 

Three commenters expressed opposition 

to this proposed requirement on the 

basis that it would not be sufficiently 

meaningful to warrant the potential 

burden of gathering and reporting it,5

with one noting that this information 

would in most, if not all, cases have 

already been listed in the previous 

year’s public report on Form 2.6

We are not persuaded by the 

arguments raised by commenters that 

this requirement would be an undue 

burden, and we believe that it is not 

unreasonable for the Board to request 

firms to provide the dates of consents 

when such consent constitutes the only 

instance of the firm issuing an audit 

report for that issuer during the 

reporting period. We acknowledge that 

for the larger firms, they will likely need 

to institute additional controls to 

compile the information, but we do not 

believe the burden to be unreasonable. 

4. Reporting of Withdrawn Audit 

Reports 

The rules proposed by the Board 

include a requirement that a firm file a 

Form 3 when it withdraws an audit 

report and the related issuer has failed 

to comply with its requirement to file a 

Form 8–K regarding the event. Some 

commenters opposed this proposal and 

expressed the view that this matter 

fundamentally is about issuer conduct 

and, therefore, is more appropriately left 

to the Commission in the context of its 

disclosure framework and that such 

monitoring and reporting would create 

an unnecessary and duplicative burden 

on registered firms.7

Commenters expressed these same 

concerns during the Board’s comment 

period and the Board responded to these 

comments by noting the following: (1) 

The point of this item is not have the 

firm draw the Board’s attention to 

potential problems with an issuer’s 

financial statements, but that a 

withdrawn audit report is a risk 

indicator concerning the auditor’s 

conduct preceding the withdrawal, not 

merely a risk indicator concerning the 

issuer’s financial statements; and (2) the 

Board has a regulatory interest in being 

aware of this information and possibly 

following up on that information for 

reasons directly related to its oversight 

of auditors. 

The Commission agrees with the 

responses made by the PCAOB and 

believes that a requirement for 

registered firms to report this 

information is not unreasonable. In 

addition, we note the response of one 

commenter who indicated that 

registered firms already routinely track 

such instances. 

5. Differing Approach in Forms 2 and 3 

to the Reporting of the Engagement of 

Consultants or Professionals Subject to 

PCAOB/SEC Discipline 

Form 2 requires registered firms to 

report information about certain types of 

relationships with individuals and 

entities who have specified disciplinary 

and other histories. One such reporting 

requirement under Part VII of Form 2 

requires firms to report arrangements for 

services related to the firm’s audit 

practice or related to services the firm 

provides to issuer audit clients. Section 

II of Form 3 includes a similar reporting 

trigger, however that trigger is not 

limited to individuals who provide 

audit services. Two commenters raised 

concerns about these requirements.8

Both commenters acknowledged a 

statement made by the Board in its 

adopting release where the Board 

expressed its view that limiting the 

scope of the Form 3 reporting 

requirement would negate the purpose 

of the reporting requirement, ‘‘which is 

generally intended to gather information 

about new relationships with persons or 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 74, No. 159 / Wednesday, August 19, 2009 / Notices 41953 

9See PCAOB Release No. 2008–004, June 10, 

2008 [page 22]. 

10See, e.g., http://www.pcaob.org/Registration/ 

Registration_FAQ.pdf; and http://www.pcaob.org/ 

Registration/2004-03-11_FAQ.pdf. 

11 15 U.S.C. 7212(f). 

12See Release No. 34–56986 (December 18, 2007). 

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

2 17 CFR 240.19b–4. 

entities that are effectively restricted 

from providing auditing services.’’ 9

Both commenters disagreed with the 

Board’s response. 

The Commission believes the Board 

appropriately explained its rationale for 

the difference in the Form 2 and Form 

3 reporting requirements and believes 

that it is not unreasonable for the Board 

to request this information in the 

current manner in which it is requested. 

6. Requests for Additional 

Implementation Guidance 

As noted in the above discussion, the 

Commission has considered the 

concerns and issues raised by 

commenters and appreciates the 

feedback. While the Commission 

believes the aforementioned matters are 

not unreasonable requirements, the 

Commission does encourage the Board 

to monitor implementation of its annual 

and special reporting rules and to be 

open to issuing timely implementation 

guidance as necessary as to these and 

the other comments raised, as was done 

with the Board’s implementation of its 

registration rules.10

B. Recommendation as to the Annual 

Fee 

Section 102(f) of the Act requires the 

Board to ‘‘assess and collect a 

registration fee and an annual fee from 

each registered firm in amounts that are 

sufficient to recover the Board’s costs of 

processing and reviewing applications 

and annual reports.’’ 11 The PCAOB has 

collected registration fees from every 

firm that has registered with the Board 

since 2003. However, the Board has not 

assessed or collected annual fees from 

any registered firms. 

In our order approving the PCAOB’s 

budget and accounting support fee for 

2008, the Commission directed the 

PCAOB to, among other things, analyze 

historical and planned expenditures 

related to the review and processing of 

registrations and annual reports of 

public accounting firms.12 We 

understand from this analysis that there 

are unrecovered historical costs that 

need to be collected from registered 

firms. In addition, the Board needs to 

determine the amount of current and 

future costs of reviewing and processing 

registrations and annual reports and 

how and over what period to recover 

those costs. These matters also are 

impacted due to changes to the Board’s 

registration profile that may occur as a 

result of the requirement for auditors of 

non-public broker dealers to be 

registered with the Board for fiscal 

periods ending on or after January 1, 

2009. 

The Commission recommends that, in 

setting its annual fee under PCAOB Rule 

2202, Annual Fee, the Board recover all 

of the unrecovered historical costs 

associated with the Board’s review and 

processing of registration applications 

in the first annual fee billed to 

registered public accounting firms and 

that these costs be recovered only from 

registered public accounting firms that 

were registered prior to January 1, 2009, 

and that such bill be separately 

itemized. In addition, for consistency 

and to aid transparency, the 

Commission recommends that future 

costs associated with reviewing and 

processing registration applications, 

processing annual and special reporting, 

and related system maintenance and 

development costs be recovered over a 

time period that is consistent with the 

time period the PCAOB uses for its 

financial statement purposes to 

depreciate long-lived assets similar to 

that used by the PCAOB in processing 

registration applications and annual and 

special reports. 

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposed 

PCAOB rules on annual and special 

reporting by registered public 

accounting firms are consistent with the 

requirements of the Act and the 

securities laws and are necessary or 

appropriate in the public interest or for 

the protection of investors. 

It is therefore ordered, pursuant to 

Section 107 of the Act and Section 

19(b)(2) of the Exchange Act, that 

proposed PCAOB Rules on Annual and 

Special Reporting by Registered Public 

Accounting Firms (File No. PCAOB– 

2008–04) be and hereby are approved. 

By the Commission. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–19838 Filed 8–18–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60491; File No. SR–CBOE– 

2009–057] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing of a 

Proposed Rule Change Related to 

Market-Maker Orders 

August 12, 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 August 

10, 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 is proposing to 

eliminate an order identification rule for 

Market-Maker and Specialist orders. 

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. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Rule 6.73(d) currently provides that a 

Floor Broker holding an order for the 

account of a Market-Maker or Specialist 

shall verbally identify the order as such 


jlentini on DSKJ8SOYB1PROD with NOTICES