Federal Register / Vol. 74, No. 57 / Thursday, March 26, 2009 / Notices 13281 

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

8 17 CFR 240.19b–4(f)(6). 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the Exchange to give the 

Commission written notice of the Exchange’s 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 the pre-filing requirement. 11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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 Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 7 and Rule 

19b–4(f)(6) thereunder.8 Because the 

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 

prior to 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 9 and Rule 19b–4(f)(6)(iii) 

thereunder.10

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–NYSEArca-2009–21 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–NYSEArca-2009–21. 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 self-regulatory 

organization. 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– 

NYSEArca-2009–21 and should be 

submitted on or before April 16, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–6702 Filed 3–25–09; 8:45 am] 

BILLING CODE 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59601; File No. SR–CBOE– 

2009–018] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing of a 

Proposed Rule Change Related to 

Short Term Option Series 

March 19, 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 13, 

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 make 

permanent its Short Term Option Series 

pilot program (the ‘‘Weeklys Program’’). 

In addition, the Exchange is proposing 

certain non-substantive changes to 

reorganize its rule text related to the 

Weeklys Program so that applicable 

terms are located within a single section 

of the relevant rules. Conforming, nonsubstantive changes are being proposed 

to the text of the Exchange’s Quarterly 

Option Series Pilot Program (the 

‘‘Quarterlys Program’’). 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. 

13282 Federal Register / Vol. 74, No. 57 / Thursday, March 26, 2009 / Notices 

3See Securities Exchange Act Release No. 52011 

(July 12, 2005), 70 FR 41451 (July 19, 2005) (SR– 

CBOE–2004–63) (‘‘Weeklys Program Approval 

Order’’). The Weeklys Program has since been 

extended and is currently scheduled to expire on 

July 12, 2009. See Securities Exchange Act Release 

No. 53984 (June 14, 2006), 71 FR 35718 (June 21, 

2006) (SR–CBOE–2006–48) (immediately effective 

rule change extending the Weeklys Program, which 

would have otherwise expired on July 12, 2006, 

through July 12, 2007), 56050 (July 11, 2007), 72 FR 

39472 (July 18, 2007) (SR–CBOE–2007–76) 

(immediately effective rule change extending the 

Weeklys Program through July 12, 2008); and 58094 

(July 3, 2008), 73 FR 40000 (July 11, 2008) (SR– 

CBOE–2008–70) (immediately effective rule change 

extending the Weeklys Program through July 12, 

2009); see also Securities Exchange Act Release 

Nos. 54338 (August 21, 2006), 71 FR 50952 (August 

28, 2006) (SR–CBOE–2006–49) (order approving an 

amendment to the Weeklys Program that increased 

the number of series that may be listed for a class 

selected to participate in the Weeklys Program from 

five series to seven series), and 58870 (October 28, 

2008), 73 FR 65430 (November 3, 2008) (SR–CBOE– 

2008–110) (immediately effective rule change 

increasing the number of series that may be listed 

for a classes selected to participate in the Weeklys 

Program from seven series to twenty series). 

4For example, if seven series are initially opened, 

there will be at least three strike prices above and 

three strike prices below the value of the underlying 

security or calculated index value. 

5 15 U.S.C. 78s(b)(1). 

6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

On July 12, 2005, the Commission 

approved the Weeklys Program.3 The 

Weeklys Program allows CBOE to list 

and trade Short Term Option Series, 

which would expire one week after the 

date on which a series is opened. Under 

the Weeklys Program, CBOE can select 

up to five approved option classes on 

which Short Term Option Series could 

be opened. If selected for the Weeklys 

Program, the Exchange may open up to 

twenty Short Term Option Series for 

each expiration date in that class. The 

strike price of each Short Term Option 

Series are fixed at a price per share, 

with approximately the same number of 

strike prices above and below the value 

of the underlying security or calculated 

index value at about the time that the 

Short Term Option Series is opened.4 If 

the Exchange opens less than twenty 

Short Term Option Series for a given 

expiration date, additional series may be 

opened for trading on the Exchange 

when the Exchange deems it necessary 

to maintain an orderly market, to meet 

customer demand or when the current 

value of the underlying security or 

index moves substantially from the 

exercise price or prices of the series 

already opened. In any event, the total 

number of series for a given expiration 

date will not exceed twenty series. 

The Exchange has selected the 

following four options classes to 

participate in the Weeklys Program: S&P 

500 Index options (SPX), S&P 100 Index 

American-style options (OEX), MiniS&P 500 Index options (XSP), and S&P 

100 Index European-style options 

(XEO). CBOE believes the Weeklys 

Program has been successful and well 

received by its members and the 

investing public for the nearly four 

years that it has been in operation as a 

pilot. 

CBOE is now proposing to make the 

Weeklys Program permanent. In support 

of approving the Weeklys Program on a 

permanent basis, and as required by the 

Weeklys Program Approval Order, the 

Exchange has submitted to the 

Commission a Weeklys Program report 

(the ‘‘Report’’) detailing the Exchange’s 

experience with the Weeklys Program. 

Specifically, the Report contains data 

and written analysis regarding the four 

options classes included in the Weeklys 

Program. The Report was submitted 

under separate cover and seeks 

confidential treatment under the 

Freedom of Information Act. 

The Exchange believes there is 

sufficient investor interest and demand 

in the Weeklys Program to warrant its 

permanent approval. The Exchange 

believes that, for the nearly four years 

that it has been in operation, the 

Weeklys Program has provided 

investors with additional means of 

managing their risk exposures and 

carrying out their investment objectives. 

Furthermore, the Exchange has not 

experienced any capacity-related 

problems with respect to Short Term 

Option Series. The Exchange also 

represents that is has the necessary 

system capacity to continue to support 

the option series listed under the 

Weeklys Program. 

In seeking permanent approval, the 

Exchange is taking this opportunity to 

propose certain non-substantive changes 

to reorganize the rule text related to the 

Weeklys Program so that applicable 

terms are located within a single section 

of Rules 5.5, and 24.9. Conforming, nonsubstantive changes are being proposed 

to the text of the Exchange’s Quarterlys 

Program. The revisions do not change 

the substance of either the Weeklys 

Program or the Quarterlys Program. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 5

and the rules and regulations 

thereunder 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) 7 requirements that 

the rules of an exchange be designed to 

promote just and equitable principles of 

trade, to prevent fraudulent and 

manipulative acts, to remove 

impediments to and to perfect the 

mechanism for a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. The Exchange believes 

that permanent approval of the Weeklys 

Program will result in an ongoing 

benefit to investors, and will continue to 

allow them additional means to manage 

their risk exposures and carry out their 

investment objectives. 

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 

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 

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 

Federal Register / Vol. 74, No. 57 / Thursday, March 26, 2009 / Notices 13283 

8 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. 59075 

(December 10, 2008), 73 FR 76429 (December 16, 

2008) (SR–FINRA–2008–055) (‘‘Rulemaking 

Notice’’). 

4See Ronald C. Long, Director of Regulatory 

Affairs, Wachovia Securities LLC, dated December 

9, 2008 (‘‘Wachovia Letter’’); Dale E. Brown, CAE, 

President and CEO, Financial Services Institute, 

dated January 6, 2009 (‘‘FSI Letter’’); and Amal Aly, 

Esq., Managing Director and Associate General 

Counsel, Securities Industry and Financial Markets 

Association, dated January 6, 2009 (‘‘SIFMA 

Letter’’). 

5Amendment No. 1 permits a General Securities 

Sales Supervisor (i.e., a Series 8 or Series 9/10 

qualified supervisor) to perform certain reviews the 

proposed rule would otherwise have required a 

Series 24 principal to perform or supervise. 

6Among the other exemptions, the Rule’s 

requirements also do not apply to transactions that 

meet the requirements of Rule 504 of Regulation D 

of the Securities Act; those involving a security of 

an issuer with at least $50 million in total assets 

and $10 million in shareholder’s equity; and those 

involving a security with worldwide average daily 

trading volume value of at least $100,000 during 

each of the six months preceding the 

recommendation. 

Number SR–CBOE–018 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–2009–018. 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 business days between the 

hours of 10 a.m. and 3 p.m., located at 

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 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–2009–018 and 

should be submitted on or before April 

16, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–6703 Filed 3–25–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59605; File No. SR–FINRA– 

2008–055] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Amendment No. 1 and Order Granting 

Accelerated Approval to a Proposed 

Rule Change, as Modified by 

Amendment No. 1, To Adopt FINRA 

Rule 2114 (Recommendations to 

Customers in OTC Equity Securities) in 

the Consolidated FINRA Rulebook 

March 19, 2009. 

I. Introduction 

On November 4, 2008, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) (f/k/a National Association 

of Securities Dealers, Inc. (‘‘NASD’’)) 

filed with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’), 

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

Securities Exchange Act of 1934 

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

proposed rule change to adopt FINRA 

Rule 2114 (Recommendations to 

Customers in OTC Equity Securities) in 

the consolidated FINRA Rulebook. The 

proposed rule change was published for 

comment in the Federal Register on 

December 10, 2008.3 The Commission 

received three comments in response to 

the proposed rule change.4 On February 

13, 2009, FINRA filed Amendment No. 

1 to amend the proposed rule change 

and respond to the comment letters.5

This order provides notice of the 

proposed rule change, as modified by 

Amendment No. 1, and approves the 

proposed rule change as amended on an 

accelerated basis. 

II. Description of the Proposed Rule 

Change 

FINRA proposed to adopt NASD Rule 

2315 (Recommendations to Customers 

in OTC Equity Securities) as FINRA 

Rule 2114 in the Consolidated FINRA 

Rulebook, subject to certain 

amendments including those contained 

in Amendment No. 1 discussed further 

below. 

1. The Current Rule 

NASD Rule 2315 is intended to 

address potential fraud and abuse in 

transactions involving securities not 

listed on an exchange and certain other 

higher risk securities. The rule 

mandates that a member conduct a due 

diligence review of an issuer’s current 

financial and business information 

before recommending a covered 

security. The rule supplements existing 

FINRA rules and the Federal securities 

law, including suitability obligations 

and the requirement that any 

recommendation to a customer have a 

reasonable basis. The rule requirements 

go beyond the basic suitability 

obligations to ensure that a registered 

representative has, at a minimum, 

confirmed the existence of and reviewed 

essential information that reveals the 

financial condition and business 

prospects of these riskier issuers. 

Specifically, the rule requires a 

member to review ‘‘current financial 

statements’’ and ‘‘current material 

business information’’ before it 

recommends the purchase or short sale 

of those securities that are published or 

quoted in a ‘‘quotation medium’’ and 

are either (1) not listed on Nasdaq or a 

national securities exchange or (2) are 

listed on a regional securities exchange 

and do not qualify for dissemination of 

transaction reports via the Consolidated 

Tape. Such securities may be more 

susceptible to fraud and abuse because 

they often are thinly capitalized or lack 

the profitability, liquidity or available 

business and financial information that 

listing standards require. The rule does 

not apply to recommendations to sell 

long positions and also exempts certain 

other transactions, including those with 

an ‘‘institutional account’’ under NASD 

Rule 3110(c)(4), a ‘‘qualified 

institutional buyer’’ under Rule 144A of 

the Securities Act of 1933 (‘‘Securities 

Act’’), or a ‘‘qualified purchaser’’ under 

Section 2(a)(51) of the Investment 

Company Act of 1940.6

The rule defines ‘‘current financial 

statements’’ to include balance sheets, 

statements of profit and loss and