Federal Register / Vol. 73, No. 151 / Tuesday, August 5, 2008 / Notices 45505 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5See Exchange Act Release No. 54919 (December 

12, 2006), 71 FR 75781 (December 18, 2006) 

(approving amendments to the program on a pilot 

basis to expire on July 31, 2007). 

6See Exchange Act Release No. 56109 (July 19, 

2007), 72 FR 41365 (July 27, 2007) (extending the 

pilot program through July 31, 2008). 

7See Exchange Act Release No. 54919, supra note 

1. 

8The Exchange understands that FINRA filed a 

similar proposed rule change that, if approved, 

would continue to provide a uniform approach with 

respect to portfolio margining. See (SR–FINRA–

2008–041). 

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

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

including whether the proposed rule is 

consistent with the requirements of 

Title I of 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/pcaob.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number PCAOB 2008–01 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Florence Harmon, Acting Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number PCAOB 2008–01. 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/pcaob/shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule that 

are filed with the Commission, and all 

written communications relating to the 

proposed rule 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 will also be available for 

inspection and copying at the principal 

office of the PCAOB. All comments 

received will be posted without change; 

we do 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. 

PCAOB–2008–01 and should be 

submitted on or before August 26, 2008. 

By the Commission. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–17893 Filed 8–4–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58243; File No. SR–CBOE–

2008–73] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to Permanent 

Approval of the Customer Portfolio 

Margin Pilot Program 

July 29, 2008. 

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

Securities Exchange Act of 1934 (‘‘Act’’

or ‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on July 8, 2008, Chicago Board Options 

Exchange, Incorporated (‘‘CBOE’’ or the 

‘‘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 CBOE. CBOE 

has filed the proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A) of the 

Act 3 and Rule 19b–4(f)(6) thereunder,4

which renders the proposed rule change 

effective upon filing with the 

Commission. 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 make permanent 

the customer portfolio margin program 

codified in Exchange Rules 9.15(c)—

Delivery of Current Options Disclosure 

Documents, 12.4—Portfolio Margin, 

13.5—Customer Portfolio Margin 

Accounts, and 15.8A—Risk Analysis of 

Portfolio Margin Accounts. CBOE is not 

proposing any textual changes to its 

Constitution or Rules. The text of the 

proposed rule change is available on the 

Exchange’s website (http:// 

www.cboe.org/legal), at the Exchange’s 

Office of the Secretary 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, 

CBOE 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. CBOE 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 Exchange’s customer portfolio 

margining program, as previously 

approved by the Commission, allows 

broker-dealers, for eligible securities, to 

compute customer margin requirements 

based on a portfolio margining 

methodology.5 The portfolio margining 

program is operating under a pilot 

program that is scheduled to expire on 

July 31, 2008.6

Amendments to the rules effective 

April 2, 2007, made equities, equity 

options, narrow-based index options, 

unlisted derivatives and security futures 

eligible for portfolio margining.7 The 

Exchange believes it has had sufficient 

time to assess the operation of the pilot 

program and has not encountered any 

problems or difficulties relating to the 

pilot program since its inception. For 

this reason, the Exchange proposes that 

the Commission approve the pilot 

program on a permanent basis.8

2. Statutory Basis 

Because the portfolio margin pilot 

program has promoted greater 

reasonableness, accuracy and efficiency 

with respect to margin requirements and 

better aligns margin requirements with 

actual risk, the Exchange believes that 

this proposed rule change is consistent 

with Section 6(b) of the Exchange Act,9

in general, and furthers the objectives of 

Section 6(b)(5) of the Act 10 in 

particular, in that it is designed to 

perfect the mechanism of a free and 

open market, and to protect investors 

and the public interest. 


dwashington3 on PRODPC61 with NOTICES
45506 Federal Register / Vol. 73, No. 151 / Tuesday, August 5, 2008 / Notices 

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 a self-regulatory organization to 

provide the Commission with 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 fulfilled this requirement. 

13For purposes only of waiving the operative 

delay for this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition and capital formation. See 

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

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4The current FINRA rulebook consists of two sets 

of rules: (1) NASD Rules and (2) rules incorporated 

from NYSE (‘‘Incorporated NYSE Rules’’). While the 

NASD Rules generally apply to all FINRA members, 

the Incorporated NYSE Rules apply only to 

members of both FINRA and the NYSE, referred to 

as Dual Members. 

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 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 forgoing 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 after the date of 

the filing, 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 11 and Rule 19b–4(f)(6) 

thereunder.12

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30 days after 

the date of filing. However, Rule 19b–

4(f)(6)(iii) permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange requests that the Commission 

waive the 30-day operative delay, which 

would make the change operative upon 

filing. The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest 

because such waiver will allow the 

customer portfolio margining program 

to continue uninterrupted as it would 

otherwise expire on July 31, 2008.13

Accordingly, the Commission 

designates the proposed rule change 

effective upon filing with the 

Commission. 

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–2008–73 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CBOE–2008–73. 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 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–2008–73 and should 

be submitted on or before August 26, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–17841 Filed 8–4–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58251; File No. SR–FINRA–

2008–041] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating To Making the 

Portfolio Margin Pilot Permanent 

July 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 July 25, 

2008, 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’’) the proposed 

rule change as described in Items I, II, 

and III below, which Items have been 

substantially prepared by FINRA. 

FINRA has designated the proposed rule 

change as constituting a ‘‘noncontroversial’’ rule change under 

paragraph (f)(6) of Rule 19b–4 under the 

Act,3 which renders the proposal 

effective upon receipt of this filing by 

the Commission. 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 

FINRA proposes to make permanent 

the portfolio margin pilot program set 

forth in NASD Rule 2520(g) and 

Incorporated NYSE Rule 431(g).4 The 


dwashington3 on PRODPC61 with NOTICES