16246 Federal Register / Vol. 74, No. 67 / Thursday, April 9, 2009 / Notices 

6See Securities Exchange Act Release No. 57293 

(February 8, 2008), 73 FR 8729 (February 14, 2008) 

(SR–CBOE–2008–12), which established the 

original Temporary Member access fee, for detail 

regarding the rationale in support of the original 

Temporary Member access fee and the process used 

to set that fee, which is also applicable to this 

proposed change to the Temporary Member access 

fee as well. 

7See Securities Exchange Act Release No. 58200 

(July 21, 2008), 73 FR 43805 (July 28, 2008) (SR– 

CBOE–2008–77), which established the original ITP 

access fee, for detail regarding the rationale in 

support of the original ITP access fee and the 

process used to set that fee, which is also applicable 

to this proposed change to the ITP access fee as 

well. 

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

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

10 15 U.S.C. 78f(b)(4). 

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

12 17 CFR 240.19b–4(f)(2). 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

floating monthly rates for the month of 

April 2009. 

The Exchange believes that the 

process used to set the proposed 

Temporary Member access fee and the 

proposed Temporary Member access fee 

itself are appropriate for the same 

reasons set forth in CBOE rule filing SR– 

CBOE–2008–12 with respect to the 

original Temporary Member access fee.6

Similarly, the Exchange believes that 

the process used to set the proposed ITP 

access fee and the proposed ITP access 

fee itself are appropriate for the same 

reasons set forth in CBOE rule filing SR– 

CBOE–2008–77 with respect to the 

original ITP access fee.7

Each of the proposed access fees will 

remain in effect until such time either 

that the Exchange submits a further rule 

filing pursuant to Section 19(b)(3)(A)(ii) 

of the Act 8 to modify the applicable 

access fee or the applicable status (i.e., 

the Temporary Membership status or 

the ITP status) is terminated. 

Accordingly, the Exchange may, and 

likely will, further adjust the proposed 

access fees in the future if the Exchange 

determines that it would be appropriate 

to do so taking into consideration lease 

rates for transferable CBOE 

memberships prevailing at that time. 

The procedural provisions of the 

CBOE Fee Schedule related to the 

assessment of each proposed access fee 

are not proposed to be changed and will 

remain the same as the current 

procedural provisions relating to the 

assessment of that access fee. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,9 in general, and 

furthers the objectives of Section 6(b)(4) 

of the Act,10 in particular, in that it is 

designed to provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among persons using its 

facilities. 

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 

Because the foregoing rule change 

establishes or changes a due, fee, or 

other charge imposed by the Exchange, 

it has become effective pursuant to 

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

subparagraph (f)(2) of Rule 19b–4 12

thereunder. 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–2009–023 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–2009–023. 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 No. 

SR–CBOE–2009–023 and should be 

submitted on or before April 30, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–8000 Filed 4–8–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59700; File No. SR–CBOE– 

2009–009] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Order Approving a 

Proposed Rule Change To Amend its 

Rules Prohibiting Members From 

Functioning as Market Makers 

April 2, 2009. 

I. Introduction 

On February 18, 2009, 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’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

revise CBOE Rule 6.8C to eliminate 

certain restrictions prohibiting members 


dwashington3 on PROD1PC60 with NOTICES
Federal Register / Vol. 74, No. 67 / Thursday, April 9, 2009 / Notices 16247 

3See Securities Exchange Act Release No. 59425 

(February 19, 2009), 74 FR 8829. 

4The term ‘‘Voluntary Professional’’ is defined in 

CBOE’s rules as any person or entity that is not a 

broker or dealer in securities that elects, in writing, 

to be treated in the same manner as a broker or 

dealer in securities for purposes of specified rules 

relating to priority in the execution of orders, and 

for cancellation fee calculation purposes. See Rule 

1.1(fff) and Securities Exchange Act Release No. 

58327 (August 7, 2008), 73 FR 47988 (August 15, 

2008) (SR–CBOE–2008–09). As part of this 

proposed rule change, the Exchange is proposing to 

amend Rule 1.1(fff) to provide that a Voluntary 

Professional will be treated in the same manner as 

a broker or dealer in securities for purposes of Rule 

6.8C. 

5The Commission has considered the proposed 

rule change’s impact on efficiency, competition and 

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

6 15 U.S.C. 78f. 

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

8See Securities Exchange Act Release No. 57478 

(March 12, 2008), 73 FR 14521 (March 18, 2008) 

(approving rules governing the trading of options on 

the NASDAQ Options Market). 

9See Securities Exchange Act Release No. 59472 

(February 27, 2009), 74 FR 9843 (March 6, 2009) 

(approval of rules for the trading of listed options 

on NYSEAlternext). 

The Commission notes that any entity that acts 

as ‘‘dealer,’’ as defined in Section 3(a)(5) of the Act, 

15 U.S.C. 78c(a)(5), would be required to register 

with the Commission under Section 15 of the Act, 

15 U.S.C. 78o, and the rules and regulations 

thereunder, or qualify for any exception or 

exemption from registration. Activity that may 

cause a person to be deemed a dealer includes 

‘‘ ‘quoting a market in or publishing quotes for 

securities (other than quotes on one side of the 

market on a quotations system generally available 

to non-broker-dealers, such as a retail screen broker 

for government securities).’ ’’ See Definitions of 

Terms in and Specific Exemptions for Banks, 

Savings Associations, and Savings Banks Under 

Sections 3(a)(4) and 3(a)(5) of the Securities 

Exchange Act of 1934, Securities Exchange Act 

Release No. 47364, 68 FR 8686, 8689, note 26 

(February 24, 2003) (quoting OTC Derivatives 

Dealers, Securities Exchange Act Release No. 40594 

(October 23, 1998), 63 FR 59362, 59370, note 61 

(November 3, 1998)). 

10 15 U.S.C. 78s(b)(2). 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

from functioning as market makers. The 

proposed rule change was published for 

comment in the Federal Register on 

February 26, 2009.3 The Commission 

received no comments on the proposal. 

This order approves the proposal. 

II. Description of the Proposal 

The Exchange proposes to amend 

Rule 6.8C, Prohibition Against Members 

Functioning as Market Makers, to 

eliminate certain of its restrictions. Rule 

6.8C currently provides that a member, 

acting either as principal or agent, may 

neither enter nor permit the entry of 

orders into the Exchange’s electronic 

order routing system if (i) the orders are 

limit orders for the account or accounts 

of the same beneficial owner(s); and (ii) 

the limit orders are entered in such a 

manner that the beneficial owner(s) 

effectively is operating as a market 

maker by holding itself out as willing to 

buy and sell such securities on a regular 

or continuous basis. The Exchange 

proposes that these restrictions be 

amended to apply only to customer 

orders (i.e., non-broker-dealer orders) 

that are not Voluntary Professional 

orders.4 The restrictions would no 

longer be applicable to instances where 

a member is acting as principal on its 

own behalf or is acting as agent on 

behalf of other broker-dealer orders or 

Voluntary Professional orders. The 

Exchange noted that it is retaining the 

restriction for customers who are not 

Voluntary Professionals because such 

customers have priority at any price 

over the bids and offers of market 

makers, other broker-dealers, and 

Voluntary Professionals. 

In addition, in those instances where 

its restrictions are applicable, Rule 6.8C 

currently provides that, in determining 

whether a beneficial owner effectively is 

operating as a market maker, the 

Exchange will consider, among other 

things, the simultaneous or near 

simultaneous entry of limit orders to 

buy and sell the same security, the entry 

of multiple limit orders at different 

prices in the same security, and the 

multiple acquisition and liquidation of 

positions in the security during the 

same day. The Exchange proposes to 

remove the last condition pertaining to 

the multiple acquisition and liquidation 

of positions from its list of factors used 

for determining whether a beneficial 

owner is operating as a market maker. 

The Exchange noted that this activity no 

longer should be considered as a factor 

in determining whether a beneficial 

owner is effectively acting as a market 

maker. 

III. Discussion 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a national 

securities exchange 5 and, in particular, 

the requirements of Section 6 of the 

Act.6 Specifically, the Commission finds 

that the proposal is consistent with 

Section 6(b)(5) of the Act,7 in that the 

proposal has been designed to promote 

just and equitable principles of trade, 

and to protect investors and the public 

interest. 

The Commission believes that it is 

consistent with the Act for an options 

exchange not to prohibit a user of its 

market from operating as a market 

maker without registering as such. The 

Commission previously approved rules 

at other options exchanges that do not 

impose such a prohibition,8 or impose 

such a prohibition on customers only.9

The Commission notes that while the 

Exchange will continue to prohibit 

customers who are not Voluntary 

Professionals from operating as market 

makers, those customers will continue 

to have priority over the bids and offers 

of market makers, other broker-dealers, 

and Voluntary Professionals. 

The Commission also believes that the 

Exchange’s proposal to remove the 

condition pertaining to the multiple 

acquisition and liquidation of positions 

from its list of factors used for 

determining whether a beneficial owner 

is operating as a market maker is 

consistent with the Act. The 

Commission believes that the remaining 

factors are sufficient to enable the 

Exchange to determine whether a user 

of its market is operating as a market 

maker. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,10 that the 

proposed rule change (SR–CBOE–2009– 

09) is approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–8002 Filed 4–8–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59701; File No. SR–ISE– 

2009–15] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to Quoting 

Obligations of Second Market 

Competitive Market Makers 

April 3, 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 25, 

2009, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) filed with the Securities and 

Exchange Commission the proposed 

rule change as described in Items I, II, 

and III below, which items have been 

prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 


dwashington3 on PROD1PC60 with NOTICES