11144 Federal Register / Vol. 74, No. 49 / Monday, March 16, 2009 / Notices 

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). In addition, Rule 19b– 

4(f)(6)(iii) requires the self-regulatory organization 

to submit to the Commission 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. 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

CBOE determined to utilize a pro-rata 

algorithm, instead of UMA, as the 

applicable matching algorithm in all 

Hybrid classes. As a result, these pilot 

programs are no longer being utilized 

and CBOE proposes to delete reference 

to them in its rules in connection with 

their expiration on March 14, 2009. 

As amended, Rule 8.3(c)(vi) states that 

a Market-Maker may not hold an 

appointment and submit electronic 

quotations in any class in which an 

affiliated DPM, LMM or e-DPM is 

appointed, or in which an affiliated 

Market-Maker holds an appointment 

and submits electronic quotations, if 

CBOE uses in that class an allocation 

algorithm that allocates electronic 

trades, in whole or in part, in an equal 

percentage based on the number of 

market participants quoting at the best 

bid or offer. However, Rule 8.3(c)(vi) 

also notes that: (i) The foregoing 

restriction does not apply if CBOE uses 

in a particular options class an 

allocation algorithm that does not 

allocate electronic trades, in whole or in 

part, in an equal percentage based on 

the number of market participants 

quoting at the best bid or offer; and (ii) 

there is no restriction on affiliated 

Market-Makers holding an appointment 

in the same class for purposes of trading 

in open outcry. These exceptions are 

currently contained in Rule 8.3(c)(vi)(3). 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (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. Specifically, the Exchange believes 

the proposed rule change is consistent 

with the Section 6(b)(5) Act 6

requirements 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, in that deleting 

reference to two existing pilot programs 

in CBOE’s rules that CBOE no longer 

utilizes and which are scheduled to 

expire on March 14, 2009 clarifies the 

rules that members are obligated to 

comply with. 

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 

The Exchange neither solicited nor 

received comments on the proposal. 

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, if consistent with the 

protection of investors and the public 

interest, 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–CBOE–2009–015 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–2009–015. 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 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–CBOE– 

2009–015 and should be submitted on 

or before April 6, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–5566 Filed 3–13–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59546; File No. SR–CBOE– 

2009–016] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Modify the Hybrid 

Rule Pertaining to Orders Represented 

in Open Outcry 

March 10, 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 March 6, 

2009, the Chicago Board Options 

Exchange, Incorporated (‘‘Exchange’’ or 

‘‘CBOE’’) filed with the Securities and 

Federal Register / Vol. 74, No. 49 / Monday, March 16, 2009 / Notices 11145 

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

4 17 CFR 240.19b–4(f)(6). 

5See Securities Exchange Act Release No. 51366 

(March 14, 2005), 70 FR 13217 (March 18, 2005) 

(SR–CBOE–2004–75). 

6See Securities Exchange Act Release Nos. 52423 

(September 14, 2005), 70 FR 55194 (September 20, 

2005) (extension through December 14, 2005), 

52957 (December 15, 2005), 70 FR 76085 (December 

22, 2005) (extension through March 14, 2006), 

53524 (March 21, 2006), 71 FR 15235 (March 27, 

2006) (SR–CBOE–2006–22) (extension through July 

14, 2006), 54164 (July 17, 2006), 71 FR 42143 (July 

25, 2006) (SR–CBOE–2006–60) (extension through 

October 31, 2006), 54680 (November 1, 2006), 71 FR 

65554 (November 8, 2006) (SR–CBOE–2006–86) 

(extension through January 31, 2007), 55219 

(February 1, 2007), 72 FR 6305 (February 9, 2007) 

(SR–CBOE–2007–10) (extension through April 30, 

2007), 55676 (April 27, 2007), 72 FR 25348 (May 

4, 2007) (SR–CBOE–2007–40) (extension through 

July 31, 2007), 56177 (August 1, 2007), 72 FR 44194 

(August 7, 2007) (SR–CBOE–2007–89) (extension 

through December 31, 2007), 57054 (December 27, 

2007), 73 FR 899 (January 4, 2008) (SR–CBOE– 

2007–149) (extension through June 30, 2008) and 

58048 (June 27, 2008) 73 FR 39355 (July 9, 2008) 

(SR–CBOE–2008–65) (extension through December 

31, 2008), 73 FR 79956 (December 30, 2008) (SR– 

CBOE–2008–126) (extension through March 31, 

2009). 

7 In order to effect proprietary transactions on the 

floor of the Exchange, in addition to complying 

with the requirements of CBOE Rule 6.45A(b), 

members are also required to comply with the 

requirements of Section 11(a)(1) of the Securities 

Exchange Act of 1934 (the ‘‘Act’’), 15 U.S.C. 

78k(a)(1), or qualify for an exemption. Section 

11(a)(1) of the Act restricts any member of a 

national securities exchange from effecting any 

transaction on such exchange for (i) the member’s 

own account, (ii) the account of a person associated 

with the member, or (iii) an account over which the 

member or a person associated with the member 

exercises discretion, unless a specific exemption is 

available. The Exchange has issued regulatory 

circulars to members informing them of the 

applicability of these Section 11(a)(1) requirements 

each time the duration of the Rule was extended. 

See CBOE Regulatory Circulars RG05–103 

(November 2, 2005), RG06–001 (January 3, 2006), 

RG06–34 (April 7, 2006), RG06–79 (July 31, 2006), 

RG06–115 (November 8, 2006), RG07–21 (February 

8, 2007), RG07–53 (May 17, 2007), RG07–88 

(August 15, 2007), RG08–08 (January 9, 2008) and 

RG08–83 (July 10, 2008). 

8 15 U.S.C. 78a et seq. 

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

10 15 U.S.C. 78(f)(b)(5). 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires that a self-regulatory 

organization submit to the Commission 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. 

Exchange Commission (the 

‘‘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 

The Exchange proposes to make 

permanent the pilot program in Rule 

6.45A(b) relating to the allocation of 

orders represented in open outcry in 

equity option classes designated by the 

Exchange to be traded on the CBOE 

Hybrid Trading System (‘‘Hybrid’’). 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 

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 

In March 2005 the Commission 

approved revisions to CBOE Rule 6.45A 

related to the introduction of Remote 

Market-Makers.5 Among other things, 

Rule 6.45A(b), pertaining to the 

allocation of orders represented in open 

outcry in equity options classes traded 

on Hybrid, was amended to clarify that 

only in-crowd market participants 

would be eligible to participate in open 

outcry trade allocations. In addition, 

Rule 6.45A(b) was amended to limit the 

duration of paragraph (b) of Rule 6.45A 

until September 14, 2005 to allow for an 

analysis of the application of Section 

11(a)(1) of the Securities Exchange Act 

of 1934 to trading conducted pursuant 

to paragraph 6.45A(b). The duration of 

this paragraph was thereafter extended 

through March 31, 2009.6 The Exchange 

now proposes to make paragraph (b) of 

Rule 6.45A permanent. 

In connection with the elimination of 

subparagraph (iii) of Rule 6.45A(b) 

(elimination of the language providing 

that the effectiveness of 6.45A(b) is 

temporary), the Exchange will issue a 

regulatory circular providing members 

guidance on the application of Section 

11(a)(1) to trading on the Hybrid 

System.7 The regulatory circular is 

attached as Exhibit 5 to the 19b–4 filing. 

The circular describes Section 11(a)(1) 

and certain of the exemptions to Section 

11(a)(1) as well as the application of the 

‘‘(G) Order’’ exemption and the ‘‘Effect 

vs. Execute’’ exemption (Rule 11a2– 

2(T)) to trading on the Hybrid System. 

2. Statutory Basis 

Making the rule permanent will allow 

the Exchange to operate under the 

existing allocation parameters for orders 

represented in open outcry in Hybrid on 

an uninterrupted basis. Accordingly, 

CBOE believes the proposed rule change 

is consistent with the Act 8 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.9

Specifically, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 10 requirements 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 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 

The Exchange neither solicited nor 

received comments on the proposal. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing rule 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 if consistent 

with the protection of investors and the 

public interest, the proposed rule 

change has become effective pursuant to 

Section 19(b)(3)(A) of the Act 11 and 

Rule 19b–4(f)(6) thereunder.12

The Exchange has asked the 

Commission to waive the 30-day 

operative delay to the extent necessary. 

The Commission believes that waiver of 

11146 Federal Register / Vol. 74, No. 49 / Monday, March 16, 2009 / Notices 

13See infra notes 5 and 6. 

14For purposes only of waiving the operative date 

of this proposal, the Commission has considered 

the rule’s impact on efficiency, competition, and 

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

15 17 CFR 200.30–3(a)(12). 

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

2Securities Exchange Release Act No. 53970 

(June 12, 2006), 71 FR 34974 (June 16, 2006) (File 

No. SR–DTC–2006–08). 

3See Securities Exchange Release Act No. 55306 

(Feb. 15, 2007) 72 FR 8217 (Feb. 23, 2007) (File No. 

SR–DTC–2006–21) (modifying the fees from the 

original filing). 

4 Dividend fees will continue to be collected 

through the current rate adjustment process. The 

dividend fee is incorporated into the final rate paid 

on the dividend by the agent on payment date and 

covers their cost for servicing the dividend 

payment. 

5ADR agreements are filed with the Commission 

and are usually posted on the depositary bank’s 

Web site. All fees discussed herein are collectively 

termed ‘‘ADR agent fees.’’ 

the operative delay is consistent with 

the protection of investors and the 

public interest because such waiver will 

enable CBOE Rule 6.45A(b) to continue 

without interruption. The Commission 

notes that the rule has been in effect on 

a pilot basis since March 14, 2005 13 and 

therefore does not raise any novel or 

significant regulatory issues. Therefore, 

the Commission designates the 

proposed rule change as operative upon 

filing.14

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. 

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–2009–016 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–2009–016. 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 the 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–2009–016 and 

should be submitted on or before April 

6, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–5572 Filed 3–13–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59540; File No. SR–DTC– 

2009–05] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing of a Proposed Rule Change 

Relating To Expanding the Scope and 

Timing To Collect and Pass-Through 

Fees Owed by Participants to 

American Depositary Receipt Agents 

March 9, 2009. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

February 25, 2009, The Depository Trust 

Company (‘‘DTC’’) 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 

prepared primarily by DTC. 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 

DTC proposes to expand the scope 

and timing that DTC can collect and 

pass-through fees owed by participants 

to American Depositary Receipt 

(‘‘ADR’’) agents. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

DTC 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. DTC 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 

On June 12, 2006, the Commission 

approved a rule filing for DTC to 

establish a mechanism for DTC to 

collect and pass through custody fees 

owed by DTC participants to ADR 

agents for issues that do not pay 

periodic dividends.2 Currently, DTC 

collects custody fees, called Depository 

Service Fees (‘‘DSF’’), from participants 

once a year per CUSIP. DTC collects 

DSFs at the request of the depositary 

bank and only for issues that have not 

paid a dividend in the last 12 months. 

In addition to collecting the DSF, DTC 

charges its participants three percent 

(3%) of the ADR agent fee up to a 

maximum of $10,000 per CUSIP 

(‘‘collection charge’’) in order to cover 

costs incurred in collecting and passing 

through DSFs.3

Based on the experience to date and 

with increased challenges due to the 

rapid growth of unsponsored ADRs, the 

depositary banks and DTC have 

discussed expanding and refining the 

current DSF collection process. With 

this rule filing, DTC proposes to collect 

all allowable DSFs, dividend fees,4 passthrough expenses, or other special fees 

as governed by the ADR agreement.5

Additionally, DTC is proposing to 

increase the maximum collection charge 

to $20,000 per CUSIP. In order to collect