Federal Register / Vol. 72, No. 45 / Thursday, March 8, 2007 / Notices 10571 

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). 

5CBOE Rule 1.1(aaa) defines Hybrid Trading 

System and Hybrid 2.0 Platform. 

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

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

8 15 U.S.C. 78s(b)(3)(A)(iii). 

9 17 CFR 240.19b–4(f)(6). 

10 Id. 

Institution and settlement of 

injunctive actions; 

Institution and settlement of 

administrative proceedings of an 

enforcement nature; 

An adjudicatory matter; and 

Other matters relating to enforcement 

proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 

added, deleted or postponed, please 

contact: 

The Office of the Secretary at (202) 

551–5400. 

Dated: March 5, 2007, 

Nancy M. Morris, 

Secretary. 

[FR Doc. 07–1105 Filed 3–6–07; 11:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55377; File No. SR–CBOE–

2007–17] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change to Amend CBOE Rules 

Relating to CBOE’s Determination to 

Trade Options on the S&P 100 (XEO) 

on the Hybrid 2.0 Platform 

March 1, 2007. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on February 

22, 2007, the Chicago Board Options 

Exchange, Incorporated (‘‘Exchange’’ or 

‘‘CBOE’’) 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 the Exchange. 

The Exchange filed the proposal as a 

‘‘non-controversial’’ 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 

CBOE proposes to amend its rules 

relating to CBOE’s determination to 

trade options on the S&P 100 (XEO) on 

the Hybrid 2.0 Platform. The text of the 

proposed rule change is available on 

CBOE’s Web site (www.cboe.org/Legal), 

at the CBOE’s Office of the Secretary, 

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 

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 these 

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 aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this rule change is to 

amend CBOE Rule 8.3 and Rule 8.4 in 

connection with CBOE’s determination 

to trade options on the S&P 100 (XEO) 

on the Hybrid 2.0 Platform.5 Presently, 

XEO and options on the S&P 100 (OEX) 

collectively have an appointment cost of 

1.0. CBOE intends to ‘‘decouple’’ XEO 

from OEX for purposes of assigning an 

appointment cost when XEO trades on 

the Hybrid 2.0 Platform. On Hybrid 2.0, 

XEO’s appointment cost will be .25 and 

XEO will be classified in Tier A+. In 

connection with this change, CBOE also 

proposes to amend OEX’s appointment 

cost and assign it a cost of .75. OEX will 

continue to be classified as a NonHybrid option class. CBOE intends to 

trade XEO on the Hybrid 2.0 Platform 

beginning on March 1, 2007. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 

and the rules and regulations under the 

Act applicable to a national securities 

exchange and, in particular, the 

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

Specifically, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) of the Act,7 which 

requires that the rules of an exchange be 

designed to promote just and equitable 

principles of trade, to prevent 

fraudulent and manipulative acts 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 that is 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 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(iii) of the Act 8 and 

subparagraph (f)(6) of Rule 19b–4 9

thereunder because it does not: (i) 

Significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; (iii) become operative for 

30 days from the date on which it was 

filed, or such shorter time as the 

Commission may designate; and the 

Exchange has given the Commission 

written notice of its intention to file the 

proposed rule change at least five 

business days prior to filing. At any 

time within 60 days of the filing of such 

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. 

Under Rule 19b–4(f)(6) of the Act,10

the proposal does not become operative 

for 30 days after the date of its filing, or 

such shorter time as the Commission 

may designate if consistent with the 

protection of investors and the public 

interest. The Exchange has requested 

that the Commission waive the 30-day 

operative date, so that XEO options may 

begin trading on the Hybrid 2.0 platform 

on March 1, 2007. The Commission 

believes that the proposed rule change 

does not raise any new regulatory issues 

and, consistent with the protection of 

investors and the public interest, has 

determined to waive the 30-day 

operative date, so that XEO options may 


sroberts on PROD1PC70 with NOTICES
10572 Federal Register / Vol. 72, No. 45 / Thursday, March 8, 2007 / Notices 

11For purposes only of waiving the operative date 

of this proposal, the Commission has considered 

the proposed rule’s impact on efficiency, 

competition and capital formation. 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. 

3See Securities Exchange Act Release No. 55034 

(December 29, 2006), 72 FR 1350 (the ‘‘Notice’’). 

4Amendment No. 1 amended the proposal: (i) To 

set forth restrictions on the use of hand signals 

between the CBSX Floor Post and the option trading 

posts; (ii) to limit the types of proprietary orders 

that may be submitted by non-DPM members at the 

CBSX Floor Post; and (iii) to allow CBSX traders to 

avail themselves of any exemptions from Rule 611 

of Regulation NMS that are granted by the 

Commission. 

5See Securities Exchange Act Release No. 54422 

(September 11, 2006), 71 FR 54537 (September 15, 

2006) (approving SR–CBOE–2004–21). 

6Securities Exchange Act Release No. 54526 

(September 27, 2006), 71 FR 58646 (October 4, 

2006) (approving SR-CBOE–2006–70). 

7 17 CFR 242.600 et seq. 

8The Exchange separately filed with the 

Commission a proposal to establish a new corporate 

structure for CBSX (the ‘‘CBSX Facility Filing’’). See 

Securities Exchange Act Release No. 55172 (January 

25, 2007), 72 FR 4745 (February 1, 2007) (notice of 

filing of SR-CBOE–2006–110). The Commission also 

approves the CBSX Facility Filing today. See 

Securities Exchange Act Release No. 55389 (March 

2, 2007). 

9 IOC orders would be cancelled if a better-priced 

protected quotation existed on another exchange. 

See CBOE Rule 51.8(g)(4). In addition, the 

Commission notes that an Intermarket Sweep Order 

(‘‘ISO’’) received by CBSX will be executed or 

cancelled immediately and not ‘‘flashed’’ to CBSX 

traders for possible matching of the NBBO. See 

CBOE Rule 51.8(n). 

begin trading on the Hybrid 2.0 platform 

without delay.11

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–2007–17 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–CBOE–2007–17. 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 

Section, 100 F Street, NE., Washington, 

DC 20549. Copies of such filing also will 

be available for inspection and copying 

at the principal office of the 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–2007–17 and should 

be submitted on or before March 29, 

2007.12

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–4053 Filed 3–7–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55392; File No. SR–CBOE–

2006–112] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing of 

Amendment No. 1 and Order Granting 

Accelerated Approval to a Proposed 

Rule Change as Modified by 

Amendment No. 1 Relating to Its Nonoption Security Trading Rules 

March 2, 2007. 

I. Introduction 

On December 29, 2006, the Chicago 

Board Options Exchange, Incorporated 

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

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and 

Rule 19b–4 thereunder,2 a proposal to 

modify its trading rules for non-option 

securities. The proposal was published 

for comment in the Federal Register on 

January 11, 2007.3 The Commission 

received no comments on the proposal. 

The Exchange filed Amendment No. 1 

with the Commission on March 2, 

2007.4 This order provides notice of and 

solicits comment on the proposed rule 

change as modified by Amendment No. 

1 and approves the proposal on an 

accelerated basis. 

II. Description of the Proposal 

In September 2006, the Commission 

approved Exchange Chapters 50–55 

governing the trading of non-option 

securities on the Exchange through a 

new electronic trading platform known 

as Stock Trading on CBOEdirect 

(‘‘STOC’’). Also in September 2006, the 

Commission approved 5modifications 6

to the STOC rules to conform them to 

aspects of Regulation NMS.7 In this 

filing, the Exchange proposes to further 

modify its trading rules for equity 

securities and rename its equity trading 

facility the CBOE Stock Exchange 

(‘‘CBSX’’).8 CBOE anticipates launching 

CBSX as of the compliance date for 

Regulation NMS. A full discussion of 

the proposed rule change is set forth in 

the Notice; significant aspects of the 

proposal are discussed below. 

First, the Exchange has proposed to 

further automate order handling and 

trade-through prevention. Under the 

current rules, if CBOE receives an order 

in an equity security when it is not at 

the national best bid or offer (‘‘NBBO’’), 

the designated primary market-maker 

(‘‘DPM’’) for that security must route the 

order to the NBBO market for execution 

if no STOC trader steps up to match the 

NBBO. The Exchange now proposes to 

program CBSX to automatically route, 

via an unaffiliated routing broker, a 

marketable order in such circumstances 

(except if the order is labeled 

immediate-or-cancel (‘‘IOC’’)).8 9

Second, the Exchange has proposed to 

move the CBSX opening from 8:30 a.m. 

Central Time (‘‘CT’’) to 8:15 a.m. CT and 

eliminate a DPM’s obligation to open its 

assigned securities at a single price that 

matches the primary market or at a price 

that does not trade-through another 

exchange’s quote. At the opening, the 

CBSX system would automatically 

execute pre-opening orders at a price 

that allows the greatest number of 

shares to trade. 

Third, the Exchange is proposing to 

add a floor component to its electronic 

trading system. CBSX would dedicate a 

space on the Exchange’s trading floor 

(the ‘‘CBSX Floor Post’’) that CBSX 

DPMs will be required to staff for the 

purpose of responding to price 


sroberts on PROD1PC70 with NOTICES