46956 Federal Register / Vol. 73, No. 156 / Tuesday, August 12, 2008 / Notices 

3The Exchange aggregates the trading activity of 

separate Liquidity Provider firms for purposes of 

the sliding scale if there is at least 75% common 

ownership between the firms as reflected on each 

firm’s Form BD, Schedule A. A Liquidity Provider’s 

monthly contract volume is determined at the firm 

affiliation level, e.g., if five Liquidity Provider 

individuals are affiliated with the same member 

firm as reflected by Exchange records for the entire 

month, all of the volume from those five individual 

Liquidity Providers count towards that firm’s 

sliding scale transaction fees for that month. See 

CBOE Fees Schedule, Footnote 10. 

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

5 15 U.S.C. 78f(b)(4). 

6 15 U.S.C. 78s(b)(3)(A). 

7 17 CFR 240.19b–4(f)(2). 

8 17 CFR 200.30–3(a)(12). 

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

2Changes are to the rule text that appears in the 

electronic manual of NSCC found at http:// 

www.nscc.com/legal/. 

and the next 1.8 million contracts 

traded (up to 4.8 million total contracts 

traded—fourth tier) are assessed at $.10 

per contract. All contracts above 4.8 

million contracts traded in a month 

(fifth tier) are assessed at $.03 per 

contract.3

The Exchange proposes to add a sixth 

tier in order to provide an additional fee 

reduction at higher volume levels. 

Specifically, the Exchange proposes to 

assess $.01 per contract for all contracts 

above 10 million contracts traded by a 

Liquidity Provider in a month. 

Accordingly, the fifth tier would be 

revised to reflect that all contracts above 

4.8 million up to 10 million contracts 

traded in a month would be assessed 

$.03 per contract. 

No other changes to the program are 

proposed. The Exchange plans to 

implement the proposed fee change on 

August 1, 2008. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with Section 

6(b) of the Securities Exchange Act of 

1934 (‘‘Act’’) 4, in general, and furthers 

the objectives of Section 6(b)(4) 5 of the 

Act in particular, in that it is designed 

to provide for the equitable allocation of 

reasonable dues, fees, and other charges 

among CBOE members. The proposed 

fee change would provide an additional 

fee reduction to Liquidity Providers at 

higher monthly volume levels. 

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 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 6 and subparagraph (f)(2) of 

Rule 19b–4 thereunder.7 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–2008–78 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–2008–78. 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–

2008–78, and should be submitted on or 

before September 2, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18602 Filed 8–11–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58300; File No. SR–NSCC–

2008–06] 

Self-Regulatory Organizations; The 

National Securities Clearing 

Corporation; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Enhance the Equity 

Options Service To Include Bond 

Options 

August 4, 2008. 

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

Securities Exchange Act of 1934 

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

July 25, 2008, the National Securities 

Clearing Corporation (‘‘NSCC’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change described in Items 

I, II, and III below, which items have 

been prepared primarily by NSCC. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested parties. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

NSCC proposes to amend its rules in 

order to enhance the NSCC Equity 

Options Service by extending similar 

processing to bond options transactions. 

The enhanced service will be called the 

‘‘NSCC Equity Options and Bond 

Options Service.’’2


sroberts on PROD1PC70 with NOTICES
Federal Register / Vol. 73, No. 156 / Tuesday, August 12, 2008 / Notices 46957 

3The Commission has modified the text of the 

summaries prepared by the NSCC. 

4The Commission approved NSCC’s original 

filing on Form 19b–4, File No. SR–NSCC–2004–04 

(the ‘‘Original Filing’’) on a temporary basis through 

May 31, 2005, pending evaluation of the service. A 

subsequent filing, File No. SR–NSCC–2005–04 (the 

‘‘Subsequent Filing’’), provided information 

regarding findings related to the evaluation of the 

service, restated the Original Filing, as amended, 

and sought permanent approval of the service. The 

Subsequent Filing was approved May 26, 2005. 

5The host computer and other automated 

facilities associated with the NSCC Equity Options 

and Bond Options Service are provided by DTC 

pursuant to service agreements between NSCC and 

DTCC and between DTCC and DTC. 

6NSCC Rules and Procedures, Rule 31. 

7NSCC offers certain ‘‘guaranteed’’ services 

through its CNS system, in which NSCC as a central 

counterparty provides settlement-related guarantees 

regarding certain trades cleared and netted at NSCC. 

NSCC also offers ‘‘nonguaranteed’’ services, such as 

NSCC’s Mutual Fund and Insurance Processing 

Services, in which members do not receive the 

protections of the NSCC guarantee. Some of NSCC’s 

nonguaranteed services entail settlement of funds 

through NSCC on a nonguaranteed basis (e.g., 

NSCC’s FundSERV(r) service); other nonguaranteed 

services involve the communication of information 

only without settlement of transactions or funds 

through the facilities of NSCC (e.g., NSCC’s Profile 

service in NSCC’s Mutual Fund Services). The 

NSCC Equity Options and Bond Options Service is 

of this latter type; i.e., a nonguaranteed service 

limited to the communication of information only, 

which does not involve settlement of securities 

transactions or funds through the facilities of NSCC. 

In its Matching Release, the Commission concluded 

that matching constitutes a clearing agency 

function, specifically the ‘‘comparison of data 

respecting the terms of settlement of securities 

transactions,’’ within the meaning of Section 

3(a)(23)(A) of the Act. Securities Exchange Act 

Release No. 39829 (April 6, 1998), 63 FR 17943 

(File No. S7–10–98). 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

NSCC 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. NSCC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of these statements.3

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

The proposed rule change amends 

Addendum M to NSCC’s Rules and 

Procedures (‘‘Addendum M’’). 

Addendum M currently relates to a 

confirmation and matching service for 

over-the-counter (‘‘OTC’’) U.S. equity 

options transactions and their 

associated cash flows called the NSCC 

Equity Options Service. The proposed 

rule change enhances the NSCC Equity 

Options Service by extending similar 

processing to bond options transactions. 

The enhanced service will be called the 

‘‘NSCC Equity Options and Bond 

Options Service.’’

The Commission approved NSCC’s 

filing on Form 19b–4, File No. SR–

NSCC–2005–04, which proposed 

adding, on a permanent basis, 

Addendum M to NSCC’s Rules and 

Procedures to establish the NSCC Equity 

Options Service.4 This filing proposes a 

rule change to amend Addendum M to 

enhance the NSCC Equity Options 

Service by extending processing to bond 

option transactions. Because the bond 

options service to be provided by NSCC 

would be largely identical to the 

existing NSCC Equity Options Service, 

this filing substantially restates the 

information contained in the previous 

filings regarding equity options 

transactions. 

In response to the need for 

automation of the trade confirmation 

process in the derivatives industry, the 

corporate parent of NSCC, The 

Depository Trust & Clearing Corporation 

(‘‘DTCC’’), in 2003 created a subsidiary, 

DTCC Deriv/SERV LLC (‘‘Deriv/SERV’’). 

Deriv/SERV currently offers a 

confirmation and matching service for 

OTC credit default swaps transactions, 

interest rate swap transactions and 

equity derivative transactions and their 

associated cash flows. This service is 

widely used, including by all of the 

largest OTC credit default swaps 

dealers. 

Deriv/SERV has developed a 

confirmation and matching service for 

OTC bond options transactions and 

their associated cash flows (the ‘‘Deriv/ 

SERV Bond Options Service’’). The 

Deriv/SERV Bond Options Service 

provides for confirmation and matching 

either between two OTC bond options 

dealers or between an OTC bond 

options dealer and its buy-side 

customer. Where either the buyer or the 

seller of an equity option or a bond 

option is a U.S. person and the equity 

option or bond option is issued by a 

U.S. issuer (a ‘‘U.S. Equity Option 

Transaction’’ or ‘‘U.S. Bond Option 

Transaction’’), NSCC will provide the 

NSCC Equity Options and Bond Options 

Service to Deriv/SERV pursuant to the 

NSCC/DTCC Deriv/SERV Service 

Agreement (‘‘Service Agreement’’).5

Deriv/SERV is a Data Services Only 

Member of NSCC.6

The Deriv/SERV Bond Options 

Service is operated pursuant to the 

operating procedures of Deriv/SERV 

(the ‘‘Deriv/SERV Operating 

Procedures’’). U.S. Bond Option 

Transactions are also subject to NSCC’s 

Addendum M. Therefore, each user of 

the Deriv/SERV Bond Options Service 

enters into an agreement with Deriv/ 

SERV obligating the user to abide by the 

terms of the Deriv/SERV Operating 

Procedures and obligating it to abide by 

Addendum M for any U.S. Bond Option 

Transactions. Pursuant to the Service 

Agreement, NSCC has the right to 

require Deriv/SERV to cause Deriv/ 

SERV’s users to abide by the terms of 

Addendum M. In addition, pursuant to 

the Service Agreement, NSCC and 

Deriv/SERV have agreed that should the 

Commission request that NSCC provide 

to the Commission any information 

relating to the NSCC Equity Options and 

Bond Options Service, Deriv/SERV will 

provide any such information in its 

possession to NSCC so that NSCC may 

provide such information to the 

Commission. 

NSCC will neither be responsible for 

the content of the messages transmitted 

through the NSCC Equity Options and 

Bond Options Service nor be 

responsible for any errors, omissions, or 

delays that may occur relating to the 

NSCC Equity Options and Bond Options 

Service in the absence of gross 

negligence on NSCC’s part. Both the 

Service Agreement and the Deriv/SERV 

Operating Procedures provide that 

NSCC has no liability in connection 

with the NSCC Equity Options and 

Bond Options Service in the absence of 

gross negligence on NSCC’s part. 

Because the NSCC Equity Options and 

Bond Options Service does not involve 

money settlement, securities clearance, 

or netting through the facilities of 

NSCC, it is a nonguaranteed service of 

NSCC.7

Deriv/SERV will charge its users fees 

in connection with the Deriv/Serv Bond 

Options Service and pursuant to the 

Service Agreement will make payments 

to NSCC for the services that NSCC is 

providing. NSCC will file proposed rule 

changes under Section 19(b) of the Act 

for fees that NSCC charges to Deriv/ 

SERV for the NSCC Equity Options and 

Bond Options Service and for any 

changes made by NSCC to the NSCC 

Equity Options and Bond Options 

Service. 

NSCC believes that the proposed rule 

change is consistent with the 

requirements of Section 17A of the Act 

and the rules and regulations 

thereunder because the implementation 

of the proposal will provide for the 

prompt and accurate clearance and 

settlement of U.S. OTC equity option 

transactions processed through the 

NSCC Equity Options and Bond Options 

Service by facilitating the transmission 


sroberts on PROD1PC70 with NOTICES
46958 Federal Register / Vol. 73, No. 156 / Tuesday, August 12, 2008 / Notices 

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

9 17 CFR 240.19b–4(f)(4). 10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Commission has modified the text of the 

summaries prepared by NSCC. 

of standardized information on a 

centralized communications platform. 

This will reduce processing errors, 

delays, and risks that are typically 

associated with manual processes. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NSCC 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 relating to the 

proposed rule change have been 

solicited or received. NSCC will notify 

the Commission of any written 

comments received by NSCC. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective upon filing pursuant to Section 

19(b)(3)(A)(iii) of the Act 8 and Rule 

19b–4(f)(4) 9 thereunder in that it: (i) 

Does not adversely affect the 

safeguarding of securities or funds in 

the custody or control of the clearing 

agency or for which it is responsible and 

(ii) does not significantly affect the 

respective rights or obligations of the 

clearing agency or persons using the 

service. At any time within sixty days 

of the filing of such 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–NSCC–2008–06 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-NSCC–2008–06. 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 filings also will be 

available for inspection and copying at 

the principal office of NSCC and on 

NSCC’s Web site, http://www.nscc.com/ 

legal/. 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–NSCC–2008–06 and should 

be submitted on or before September 2, 

2008. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18548 Filed 8–11–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58314; File No. SR–NSCC–

2008–07] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; Notice of Filing of 

Proposed Rule Change To Enhance 

Processing of Exchange-Traded Funds 

August 5, 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 22, 

2008 the National Securities Clearing 

Corporation (‘‘NSCC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change described in Items I, II, and III 

below, which items have been prepared 

primarily by NSCC. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested parties. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The proposed rule change seeks to: (i) 

Expand processing of shares in 

exchange-traded funds (‘‘Index 

Receipts’’) to allow for cash as a sole 

component of creations and 

redemptions and (ii) provide for an 

optional shortened processing cycle for 

creates and redeems of Index Receipts 

and their underlying components. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

NSCC 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. NSCC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of these statements.3

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

NSCC began processing Index 

Receipts with the launch of the first 

exchange-traded fund, the SPDR, in 

1993. NSCC’s Index Receipt processing 


sroberts on PROD1PC70 with NOTICES