48112 Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Notices 

5 15 U.S.C. 78f. 

6 15 U.S.C. 78f(b)(5). 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f)(6). 9 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4 15 U.S.C. 78s(b)(3)(A)(iii). 

5 17 CFR 240.19b–4(f)(6). 

the provisions of Section 6 of the Act,5

in general, and with Sections 6(b)(5) of 

the Act,6 in particular, in that the 

proposal is designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, 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. The 

proposed changes will conform 

NASDAQ IM–2110–04 to recent changes 

made to a corresponding FINRA rule, to 

promote application of consistent 

regulatory standards. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change 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 7 and Rule 19b– 

4(f)(6) thereunder.8

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–NASDAQ–2009–083 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2009–083. 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–NASDAQ–2009–083 and 

should be submitted on or before 

October 13,2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–22681 Filed 9–18–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60666; File No. SR–CBOE– 

2009–062] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to Dissemination 

of Certain Index Data 

September 14, 2009. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on August 

28, 2009, the 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 and II 

below, which Items have been prepared 

by CBOE. The Exchange filed the 

proposal as ‘‘non-controversial’’ 

pursuant to Section 19(b)(3)(A)(iii) of 

the Act 4 and Rule 19b–4(f)(6) 

thereunder, which renders it effective 

upon filing.5 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’’) 

is not proposing any textual changes to 

the Constitution or Rules of CBOE in 

this filing. The Exchange is proposing to 

update statements that it made in Item 

3 of previous filings made by the 

Exchange pursuant to Rule 19b–4, as 

described in subsection (a)(1) of Item 3 

of this filing. 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. 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Notices 48113 

6For example, in its filing with respect to the 

options on the RVX, CBOE stated that ‘‘Volatility 

index levels [of the RVX] will be calculated by 

CBOE and disseminated at 15-second intervals to 

market information vendors via the Options Price 

Reporting Authority (‘‘OPRA’’),’’ and the 

Commission noted this statement in its approval 

order for these options. See Securities Exchange Act 

Release No. 54643 (October 23, 2006), 71 FR 63367 

(October 30, 2006) (notice of filing of File No. SR– 

CBOE–2006–73) and Securities Exchange Act 

Release No. 55425 (March 8, 2007), 72 FR 12238 

(March 15, 2007) (approval of File No. SR–CBOE– 

2006–73). Similar statements were made in CBOE 

filings with respect to options on the following 

indexes: See Securities Exchange Act Release Nos. 

32893 (September 14, 1993), 58 FR 49070 

(September 21, 1993) (XSP); 58207 (July 22, 2008), 

73 FR 43963 (July 29, 2008) (BXM); 32244 (April 

29, 1993), 58 FR 27005 (May 6, 1993) (CEX); 48807 

(November 19, 2003), 68 FR 66516 (November 26, 

2003) (VIX, VXD, VXN); 49698 (May 13, 2004), 69 

FR 29152 (May 20, 2004) (VXB); 39011 (September 

3, 1997), 62 FR 47840 (September 11, 1997) (DJX, 

DXL, WDX); 39012 (September 3, 1997), 62 FR 

47850 (September 11, 1997) (DTX); 39013 

(September 3, 1997), 62 FR 47845 (September 11, 

1997) (DUX, LDU); 41112 (February 25, 1999), 64 

FR 10517 (March 4, 1999) (ECM, ZJ); 41009 

(February 1, 1999), 64 FR 6410 (February 9, 1999) 

(DJR); 38353 (February 28, 1997), 62 FR 10888 

(March 10, 1997) (NFT); 31382 (October 30, 1992), 

57 FR 52802 (November 5, 1992) (RUT); 48591 

(October 2, 2003), 68 FR 58728 (October 10, 2003) 

(RUI, RUA); 51220 (February 17, 2005), 70 FR 

09398 (February 25, 2005) (RMN); 32238 (April 29, 

1993), 58 FR 27020 (May 6, 1993) (BIX); 32241 

(April 29, 1993), 58 FR 27012 (May 6, 1993) (HCX); 

32239 (April 29, 1993), 58 FR 27024 (May 6, 1993) 

(IUX); 32240 (April 29, 1993), 58 FR 27016 (May 

6, 1993) (RLX); and 34124 (May 27 1994), 59 FR 

29310 (June 6 1994) (SGX, SVX). 

7See CBOE Rules 24.2(b)(10) (values of narrowbased index options must be ‘‘reported at least once 

every fifteen seconds during the time the index 

options are traded on the Exchange’’), 24.2(d)(8) 

(values of micro narrow-based index options must 

be ‘‘reported at least once every fifteen seconds 

during the time the index options are traded on the 

Exchange’’), and 24.2(f)(11) (the Exchange may 

trade options on a broad-based index pursuant to 

Rule 19b-4(c) of the Exchange act if ‘‘ * * * (11) 

The current index value is widely disseminated at 

least once every fifteen (15) seconds by the Options 

Price Reporting Authority, CTA/CQ, NIDS or one or 

more major market data vendors during the time 

options on the index are traded on the Exchange’’). 

It has been pointed out to CBOE that the language 

of 24.2(f)(11) is not parallel to the language of 

24.2(b)(10) and 24.2(d)(8), particularly in the use of 

the word ‘‘disseminated’’ in the first of these 

provisions and the word ‘‘reported’’ in the second 

and third of them. CBOE believes that the three 

provisions are intended to be substantively parallel, 

and CBOE intends to amend these Rules in a 

separate filing to conform their language by using 

the word ‘‘disseminate’’ in all three provisions. 

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

9 15 U.S.C. 78f(b)(5). 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

provide the Commission with 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 date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. The 

Exchange has satisfied this requirement. 

12See supra note 2. 

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, Proposed Rule 

Change 

1. Purpose 

CBOE currently disseminates values 

of its proprietary indexes and many of 

the indexes licensed by CBOE to 

underlie options traded on CBOE 

through the Options Price Reporting 

Authority (‘‘OPRA’’). Some of these 

indexes underlie options approved for 

listing and trading on CBOE by the 

Commission pursuant to filings 

submitted by CBOE pursuant to Rule 

19b-4. In some of these filings, CBOE 

stated that the values of the respective 

indexes would be disseminated through 

OPRA.6

Since 2006, CBOE has also 

disseminated values of its proprietary 

indexes and certain licensed indexes to 

major market data vendors outside of 

OPRA. For its proprietary and other 

indexes subject to a requirement that 

dissemination of the index values occur 

through OPRA pursuant to the filings 

noted above, the Exchange proposes to 

amend such requirement to permit 

dissemination of these values to major 

market data vendors solely outside of 

OPRA. 

CBOE believes that its proposal to 

permit dissemination of its proprietary 

and certain other index values to major 

market data vendors solely outside of 

OPRA will continue to be in full 

compliance with the Commission’s 

requirements with respect to the 

dissemination of values of indexes 

underlying options and CBOE’s own 

applicable rules. CBOE Rule 24.2 

requires that values of an underlying 

index be widely disseminated at least 

once every fifteen seconds if the listing 

of a class of options on the index is not 

the subject of a separate filing, and this 

will continue to be the case for index 

values that cease to be disseminated on 

OPRA.7 CBOE Rule 24.3(a) requires that 

‘‘The Exchange shall disseminate or 

shall assure that the current index value 

is disseminated after the close of 

business and from time-to-time on days 

on which transactions in index options 

are made on the Exchange,’’ and this 

also will continue to be the case for 

index values that cease to be 

disseminated on OPRA. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with Section 

6(b) of the Act 8 in general, and Section 

6(b)(5) of the Act 9 in particular, in that 

it updates statements made by the 

Exchange in previous filings that would 

either become inaccurate or impede the 

Exchange from modifying its 

dissemination of index values in a 

manner that is consistent with the 

objectives of the Act. 

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 

Because the forgoing 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 10 and Rule 19b– 

4(f)(6) thereunder.11

The long standing policy of the 

Commission with respect to the 

dissemination of values of indexes 

underlying index options has been to 

ensure the wide dissemination and wide 

availability of index values to market 

participants. This policy is reflected in 

CBOE Rule 24.2, which requires that 

values of an underlying index be widely 

disseminated at least once every fifteen 

seconds if the listing of a class of 

options on the index is not the subject 

of a separate filing.12 The Exchange 

believes the proposed rule change is 

consistent both with CBOE Rule 24.2 

and this Commission policy. Based on 

the foregoing, the Exchange designates 

this proposed rule change as 

mstockstill on DSKH9S0YB1PROD with NOTICES

48114 Federal Register / Vol. 74, No. 181 / Monday, September 21, 2009 / Notices 

13 17 CFR 240.19b–4(f)(6). 

14 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 Release No. 60420 

(August 3, 2009), 74 FR 39989. 

4Rules 6.45A and 6.45B also include the Ultimate 

Matching Algorithm (‘‘UMA’’). CBOE did not 

propose any changes to the UMA in this filing. 

5Under the existing participation entitlements, 

the Exchange may determine to grant marketmakers 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 

entitlement 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 its 

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 the 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; and (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). 

immediately effective under Rule 19b– 

4(f)(6) 13 of the Act. 

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–2009–062 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–2009–062. 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 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 

Number SR–CBOE–2009–062 and 

should be submitted on or before 

October 13, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–22684 Filed 9–18–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60665; File No. SR–CBOE– 

2009–052] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Order Approving a 

Proposed Rule Change Related to the 

Hybrid Matching Algorithms 

September 14, 2009. 

On July 17, 2009, the Chicago Board 

Options Exchange, Incorporated (the 

‘‘Exchange’’ or ‘‘CBOE’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’), pursuant to 

Section 19(b)(1) of the Securities 

Exchange Act of 1934 (the ‘‘Act’’),1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change to amend CBOE Rules 6.45A and 

6.45B to adopt a modified participation 

entitlement overlay to orders executed 

electronically on the CBOE Hybrid 

System (‘‘Hybrid System’’). The 

proposed rule change was published for 

comment in the Federal Register on 

August 10, 2009.3 The Commission 

received no comments on the proposed 

rule change. This order approves the 

proposed rule change. 

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 both rules 

currently provides for several different 

matching algorithms, including pricetime and pro-rata priority matching 

algorithms with additional priority 

overlays.4 The priority overlays 

currently include: public customer 

priority, market turner priority, and 

participation entitlements for certain 

qualifying market-makers.5 These 

overlays are optional. 

The purpose of the rule filing is to 

adopt the ‘‘modified participation 

entitlement,’’ an additional optional 

priority overlay for the price-time and 

pro-rata matching algorithms. The 

modified participation entitlement will 

operate in the same manner as the 

existing participation entitlement for 

certain qualifying market-makers; 

however, 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—i.e. the allocation 

would revert back to the price-time or 

pro-rata methods. The participation 

entitlement for certain qualifying 

market-makers would therefore only be 

applied to the execution of an inbound 

order if there are no public customer 

orders resting on the Hybrid System at 

the best price or if a public customer 

was the first to rest interest at the best 

price, in which case the public customer 

order would have priority over the order 

of the market maker. This outcome is a 

mstockstill on DSKH9S0YB1PROD with NOTICES