Federal Register / Vol. 73, No. 89 / Wednesday, May 7, 2008 / Notices 25809 

32 In approving this rule change, as amended, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

33 15 U.S.C. 78f(b)(5). 

34 15 U.S.C. 78s(b)(2). 

35 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3As that term is defined in Article I, Section 3(h), 

and Article IX of the BSE Constitution. 

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change, as 

amended, is consistent with the 

requirements of the Act and the rules 

and regulations thereunder.32 In 

particular, the Commission finds the 

proposed rule change, as amended, 

would integrate the supervision and 

compliance functions relating to 

member organizations’ public customer 

options activities into the overall 

supervisory structure of a member 

organization, thereby eliminating any 

uncertainty over where supervisory 

responsibility lies. In addition, the 

proposed rule change would foster the 

strengthening of members’ and member 

organizations’ internal controls and 

supervisory systems. As such, the 

Commission finds the proposal to be 

consistent with the objectives of Section 

6(b)(5) of the Act,33 in that it is designed 

to promote just and equitable principles 

of trade, to prevent fraudulent and 

manipulative acts and practices, and in 

general, to protect investors and the 

public interest. 

The Commission also finds good 

cause for approving Amendment No.1 to 

the proposed rule change prior to the 

30th day after its publication in the 

Federal Register. Amendment No. 1 

corrects an internal cross-reference and 

does not contain any substantive 

modifications to the rule text. The 

Commission finds that it is in the public 

interest to approve the proposed rule 

change as soon as possible to expedite 

its implementation. Accordingly, the 

Commission believes good cause exists, 

consistent with Sections 6(b)(5) and 

19(b) of the Act to approve Amendment 

No. 1 to the proposed rule change on an 

accelerated basis. 

IV. Solicitation of Comments 

Concerning Amendment No. 1 

Interested persons are invited to 

submit written data, views, and 

arguments concerning Amendment No. 

1, including whether Amendment No. 1 

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–Amex–2007–129 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–Amex–2007–129. 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 available publicly. All 

submissions should refer to File 

Number SR–Amex–2007–129 and 

should be submitted on or before May 

28, 2008. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,34 that the 

proposed rule change (SR–Amex–2007–

129), as amended by Amendment No. 1, 

be, and hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.35

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E8–10019 Filed 5–6–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–57760; File No. SR–BSE–

2008–02] 

Self-Regulatory Organizations; Boston 

Stock Exchange, Incorporated; Notice 

of Filing of Proposed Rule Change 

Amending the Certificate of 

Incorporation of Boston Stock 

Exchange, Incorporated 

May 1, 2008. 

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 April 23, 

2008, the Boston Stock Exchange, 

Incorporated (‘‘BSE’’ 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 substantially prepared by 

BSE. 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 BSE proposes to amend its 

Certificate of Incorporation in order to 

make distributions to Exchange 

membership 3 owners under certain 

circumstances. Specifically, the 

amended Certificate of Incorporation 

will permit the Exchange to distribute 

the net proceeds from the Exchange’s 

intended sale of its equity interests in 

the Boston Options Exchange Group 

LLC (‘‘BOX’’) to the Bourse de Montre ́al 

(‘‘MX’’) by means of a pro rata 

redemption of a portion of each 

Exchange membership. The text of the 

proposed rule change is available on the 

Exchange’s Web site (http:// 

www.bostonstock.com), at the principal 

offices of the Exchange, 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, BSE 

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. BSE has prepared 


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25810 Federal Register / Vol. 73, No. 89 / Wednesday, May 7, 2008 / Notices 

4See Securities Exchange Act Release No. 57757 

(May 1, 2008) (SR–BSE–2008–23). 

5See Securities Exchange Act Release No. 57714 

(April 25, 2008) (SR–BSE–2008–25). 

6All holders of outstanding BSE memberships, 

including lessors but not lessees, and excluding 

electronic access members (‘‘EAMs’’), will be 

entitled to receive their pro rata share of the equity 

interest in BOX based on the outstanding number 

of such BSE memberships. 

7See Restated Certificate, Article Fourth. 

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

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 

On October 2, 2007, the Exchange 

announced that it had entered into an 

agreement to be acquired by The Nasdaq 

Stock Market, Inc., (n/k/a The NASDAQ 

OMX Group, Inc.) (‘‘NASDAQ OMX’’) in 

a transaction that is subject to approval 

by the Exchange’s members and by the 

Commission. The Exchange is being 

sold in its entirety to NASDAQ OMX, 

including all of its subsidiaries, with the 

exception of BOX. The sale will be 

structured as a merger of the Exchange 

with and into a wholly- owned 

subsidiary of NASDAQ OMX. The 

Exchange will be the surviving 

corporation and will become a whollyowned subsidiary of NASDAQ OMX. 

Proposed rule changes, filed pursuant to 

Section 19 of the Act, relating to 

NASDAQ OMX’s planned acquisition of 

the Exchange must be approved by the 

Commission in order for the transaction 

to close and are the subject of a separate 

filing.4 The sale of the Exchange’s 

equity interest in BOX to a third party 

is a condition precedent to completing 

the sale of the Exchange to NASDAQ 

OMX. 

Currently, BOX is owned by the 

Exchange, MX, and several other 

investors. On December 21, 2007, the 

Exchange announced that it had reached 

an agreement with MX to sell the 

Exchange’s remaining equity interest in 

BOX to MX. Upon closing of this 

transaction, which is also subject to 

approval by the Commission, the 

Exchange will no longer have an equity 

interest in BOX, and MX will have 

increased its ownership interest in BOX 

from 31.4% to 53.24%.5 Exchange 

membership owners 6 will be 

compensated for their equity interest in 

BOX as would be provided in Article 

Fourth of the Restated Certificate of 

Incorporation of Boston Stock Exchange, 

Incorporated (‘‘Restated Certificate’’). 

After completing the sale of all of its 

equity interests in BOX, the Exchange 

will continue to act as the selfregulatory organization for the BOX 

facility, and the Exchange’s whollyowned subsidiary Boston Options 

Exchange Regulation, LLC (‘‘BOXR’’) 

will provide the regulatory framework 

for the BOX facility. BOXR, together 

with BOX, will continue to have 

regulatory responsibility for the 

activities of the BOX facility. 

In order for the Exchange to distribute 

the net proceeds from the BOX sale to 

the Exchange’s membership owners, the 

Exchange’s Certificate of Incorporation 

must be amended in order to remove the 

existing provision that prevents the 

Exchange from making distributions to 

Exchange membership owners, and to 

add a provision that allows the 

Exchange to redeem a portion of each 

membership for a pro rata share of the 

net proceeds of the BOX sale.7 The 

Exchange has been advised that the use 

of the redemption as a means to 

distribute proceeds from the sale of its 

equity interest in BOX may provide 

beneficial tax treatment. Therefore, the 

Restated Certificate would permit the 

Exchange to make distributions to 

membership owners, and also would 

permit the use of such pro rata 

redemption. The Restated Certificate 

also would delete obsolete text 

regarding the incorporators of the 

Exchange. 

If approved by the Commission, the 

Restated Certificate would be effective 

immediately prior to the closing of the 

BOX distribution upon the filing of the 

Restated Certificate with the Secretary 

of State of the State of Delaware. It is 

anticipated that the Restated Certificate 

would be amended again upon the 

closing of NASDAQ OMX’s planned 

acquisition of the Exchange. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the requirements under section 6(b)(5) 

of the Act,8 that an exchange have rules 

that are designed to promote just and 

equitable principles of trade, to remove 

impediments to and to perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest in that, if approved, the 

proposed rule change will provide a 

means for the Exchange to distribute the 

proceeds from the sale of the Exchange’s 

equity interest in BOX to all of the 

Exchange’s owners of memberships. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

BSE 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 

Written comments were neither 

solicited nor received. 

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 

(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–BSE–2008–02 on the 

subject line. 

Paper comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. All 

submissions should refer to File 

Number SR–BSE–2008–02. 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 


sroberts on PROD1PC70 with NOTICES
Federal Register / Vol. 73, No. 89 / Wednesday, May 7, 2008 / Notices 25811 

9 17 CFR 200.30–3(a)(12). 

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). 

5See Securities Exchange Act Release No. 55531 

(March 26, 2007), 72 FR 15736 (April 2, 2007) (SR–

CBOE–2006–94). See also Securities Exchange Act 

Release No. 57568 (March 26, 2008), 73 FR 18016 

(April 2, 2008) (SR–CBOE–2008–32) (immediately 

effective rule change expanding the Off-Floor DPM 

program, which had originally been limited to 

equity option classes to include all option classes 

traded on the Hybrid Trading System and Hybrid 

2.0 Platform (collectively ‘‘Hybrid’’)). 

6CBOE Rule 8.15A(a)(i) provides that the factors 

to be considered in selecting LMMs include: 

Adequacy of capital; experience in trading index 

options or options on ETFs; presence in the trading 

crowd; adherence to CBOE Rules; and ability to 

meet the obligations specified in the Rule. An 

individual may be appointed as an LMM for one 

expiration month at a time. When individual 

members are associated with one or more other 

members, only one member may receive an LMM 

appointment. 

7CBOE Rule 8.83(g) provides that the factors to 

be considered in determining whether to permit a 

DPM to operate as an Off-Floor DPM include, but 

are not limited to, any one or more of the following: 

(i) Adequacy of capital; (ii) operational capacity; 

(iii) trading experience of and observance of 

generally accepted standards of conduct by the 

applicant, its associated persons, and the DPM 

Designees who will represent the applicant in its 

capacity as a DPM; (iv) number and experience of 

support personnel of the applicant who will be 

performing functions related to the applicant’s DPM 

business; (v) regulatory history of and history of 

adherence to CBOE Rules by the applicant, its 

associated persons, and the DPM Designees who 

will represent the applicant in its capacity as a 

DPM; (vi) willingness and ability of the applicant 

to promote the Exchange as a marketplace; (vii) 

performance evaluations conducted pursuant to 

CBOE Rule 8.60, Evaluation of Trading Crowd 

Performance; and (viii) in the event that one or 

more shareholders, directors, officers, partners, 

managers, members, DPM Designees, or other 

principals of an applicant is or has previously been 

a shareholder, director, officer, partner, manager, 

member, DPM Designee, or other principal in 

another DPM, adherence by such DPM to the 

requirements set forth in Section C of Chapter VIII 

of the CBOE Rules respecting DPM responsibilities 

and obligations during the time period in which 

such person(s) held such position(s) with the DPM. 

8 In addition to the changes to CBOE Rule 8.15A, 

CBOE is proposing related updates to paragraph (b) 

of CBOE Rule 8.15B, Participation Entitlement of 

LMMs, and subparagraphs (d)(v) and (vii) of CBOE 

Rule 6.74, Crossing Orders. 

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 the 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–BSE–2008–02 and should 

be submitted on or before May 28, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E8–10072 Filed 5–6–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–57747; File No. SR–CBOE–

2008–49] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Related to Off-Floor 

LMMs 

April 30, 2008. 

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 April 24, 

2008, 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, II, and III below, which Items 

have been substantially 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 

The Exchange proposes to amend 

CBOE rules relating to Lead MarketMakers (‘‘LMMs’’). 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. 

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 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 

Last year, CBOE amended its rules to 

provide Designated Primary MarketMakers (‘‘DPMs’’) with the flexibility to 

operate remotely away from CBOE’s 

trading floor as a so-called ‘‘Off-Floor 

DPM.’’ 5 CBOE is now proposing to 

provide LMMs with the same flexibility 

to operate remotely away from CBOE’s 

trading floor. Specifically, CBOE 

proposes to amend Rule 8.15A, Lead 

Market-Makers in Hybrid Classes, to 

provide the following: 

• An LMM generally will operate on 

CBOE’s trading floor (‘‘On-Floor 

LMM’’). However, an LMM can request 

that the Exchange authorize the LMM to 

function remotely away from CBOE’s 

trading floor (‘‘Off-Floor LMM’’) on a 

class-by-class basis. 

• An LMM can request that the 

Exchange authorize it to operate as an 

Off-Floor LMM in one or more Hybrid 

classes. The Exchange will consider the 

factors specified in Rule 8.15A(a)(i)(A),6

as well as the factors applicable to OffFloor DPMs specified in paragraph (g) of 

Rule 8.83, Approval to Act as a DPM,7

in determining whether to permit an 

LMM to operate as an Off-Floor LMM. 

If an LMM is approved to operate as an 

Off-Floor LMM in one or more Hybrid 

classes, the Off-Floor LMM can have an 

LMM designee trade in open outcry in 

the option classes allocated to the OffFloor LMM, but the Off-Floor LMM 

shall not receive a participation 

entitlement under Rule 8.15B, 

Participation Entitlement of LMMs, with 

respect to orders represented in open 

outcry.8

• An LMM that is approved to 

operate as an Off-Floor LMM in one or 

more Hybrid classes can request that the 

Exchange authorize it to operate as an 

On-Floor LMM in those option classes. 

In making a determination pursuant to 

this paragraph, the Exchange should 

evaluate whether the change is in the 

best interests of the Exchange, and may 


sroberts on PROD1PC70 with NOTICES