47986 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

which the Postal Service exercises 

sufficient market power that it can 

without risk of losing a significant level 

of business to other firms offering 

similar products: (1) Set the price of 

such product substantially above costs, 

(2) raise prices significantly; (3) 

decrease quality; or (4) decrease output. 

The contract sets specific terms and 

conditions for providing Express Mail 

service to the customer. Express Mail is 

provided in a highly competitive 

market. The Postal Service is unable to 

set prices substantially above costs, 

raise prices significantly, decrease 

quality, or decrease output, without 

losing this business to private 

competitors in the expedited shipping 

market. 

In negotiating this contract, the Postal 

Service’s bargaining position was 

constrained by the existence of other 

providers of services similar to the 

Postal Service’s. As such, the market 

precludes the Postal Service from taking 

unilateral action to increase prices or 

decrease service. As with Express Mail 

service in general, the Postal Service 

may not decrease quality or output 

without risking the loss of business to 

competitors that offer similar expedited 

delivery services. The market does not 

allow the Postal Service to raise prices 

or offer prices substantially above costs; 

rather, the contract is premised on 

prices and terms that provide sufficient 

incentive for the customer to ship with 

the Postal Service rather than a 

competitor. 

(e) Explain whether or not each 

product that is the subject of the request 

is covered by the postal monopoly as 

reserved to the Postal Service under 189 

U.S.C. 1696, subject to the exceptions 

set forth in 39 U.S.C. 601. 

I am advised that Express Mail service 

and this contract are not covered by 

these provisions. See part (d) above. 

(f) Provide a description of the 

availability and nature of enterprises in 

the private sector engaged in the 

delivery of the product. 

See part (d) above. Expedited 

shipping, including guaranteed 

overnight shipping, is widely available 

from well-known and successful private 

firms at both published and contract 

prices. 

(g) Provide any available information 

of the views of those who use the 

product on the appropriateness of the 

proposed modification. 

Having entered into this contract with 

the Postal Service, the customer 

supports the addition of the contract to 

the product list so that the contractual 

terms can be effectuated. 

(h) Provide a description of the likely 

impact of the proposed modification on 

small business concerns. 

The market for expedited delivery 

services is highly competitive and 

requires a substantial infrastructure to 

support a national network. Large 

shipping companies serve this market. 

The Postal Service is unaware of any 

small business concerns that could offer 

comparable service for this customer. 

(i) Include such other information, 

data, and such statements of reasons 

and bases, as are necessary and 

appropriate to fully inform the 

Commission of the nature, scope, 

significance, and impact of the proposed 

modification. 

Additional details regarding the terms 

of the contract have been provided to 

the Commission under seal due to the 

sensitivity of the contract to both the 

customer and the Postal Service. 

[FR Doc. E8–18887 Filed 8–14–08; 8:45 am] 

BILLING CODE 7710–12–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58326; File No. SR–CBOE–

2008–82] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Its Rules 

Related to the Hybrid Agency Liaison 

and the Complex Order RFQ Auction 

August 7, 2008. 

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 July 31, 

2008, the Chicago Board Options 

Exchange, Incorporated ( ‘‘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 

Exchange filed the proposal as a ‘‘noncontroversial’’ 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 modify 

Rule 6.14, Hybrid Agency Liaison (HAL), 

so that the order eligibility requirements 

mirror the requirements for the 

Exchange’s Rule 6.13A, Simple Auction 

Liaison (SAL). The Exchange also 

proposes a similar modification to Rule 

6.53C(d), Process for Complex Order 

RFR Auction (‘‘COA’’), so that the 

Exchange may determine eligible 

complex order type and eligible 

complex order origin code for COA on 

a class-by-class basis. 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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

HAL and COA are features within 

CBOE’s Hybrid System. In classes where 

HAL and/or COA are activated, eligible 

orders are electronically exposed for an 

exposure period. During the applicable 

exposure period, the orders that are 

subject to exposure are eligible to 

receive a better price. At the conclusion 

of the HAL or COA process, as 

applicable, the order is then allocated 

or, to the extent not executed, booked or 

routed as described in the relevant 

rules. 

HAL exposes eligible simple orders 

for price improvement. For HAL, an 

eligible order is currently an order in an 

option class designated by the Exchange 

that is (i) a market order or limit order 

that is marketable against the 

Exchange’s disseminated quotation 

while that quotation is not at the 

national best bid or offer (‘‘NBBO’’); (ii) 

a limit order that would improve the 

Exchange’s disseminated quotation and 

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Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices 47987 

5Paragraph (a) defines a complex order to include 

a spread order, straddle order, strangle order, 

combination order, ratio order, butterfly spread 

order, box/roll spread order, collar orders and risk 

reversals and stock-option orders. 

6Paragraph (b) defines the types of complex 

orders that may be entered as fill-or-kill (‘‘FOK’’), 

IOC, all-or-none (‘‘AON’’) or good-’til-cancelled 

(‘‘GTC’’). 

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

8 15 U.S.C. 78f(b)(5). 

9The Exchange has fulfilled this requirement. 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(6). 

is marketable against quotations 

disseminated by other exchanges 

participating in the Intermarket Options 

Linkage (‘‘Linkage’’); and (iii) for Hybrid 

3.0 classes, a limit order that would 

improve the Exchange’s disseminated 

quotation except when the disseminated 

quotation is represented by a manual 

quote. To have more flexibility and so 

that there is consistency in our rules, we 

are proposing to change these HAL 

order eligibility provisions to mirror the 

order eligibility provisions of SAL, 

which is a feature within CBOE’s 

Hybrid System that auctions eligible 

marketable orders for price 

improvement over the NBBO. 

Specifically, we are proposing to modify 

the HAL order eligibility parameters to 

provide that, in addition to designating 

the eligible option classes, the Exchange 

may designate the eligible order size, 

eligible order type and eligible order 

origin code (i.e., public customer orders, 

non-Market Maker broker-dealer orders, 

and Market Maker broker dealer orders) 

for each class. The proposal would not, 

however, permit the Exchange to 

discriminate among individual market 

participants of the same type (e.g., 

permit certain market-maker orders but 

not others to be eligible for the HAL 

auction). Any changes to the HAL 

eligibility parameters determined by the 

Exchange would be announced to the 

membership via Regulatory Circular. 

Thus, an order would be eligible for 

a HAL auction if it meets these 

designated criteria and (i) is marketable 

against the Exchange’s disseminated 

quotation while that quotation is not at 

the NBBO; (ii) would improve the 

Exchange’s disseminated quotation and 

is marketable against quotations 

disseminated by other exchanges 

participating in Linkage; and (iii) for 

Hybrid 3.0 classes, would improve the 

Exchange’s disseminated quotation 

except when the disseminated quotation 

is represented by a manual quote. All 

other provisions of the HAL rule would 

apply unchanged. In this regard, the 

Exchange notes that orders that are not 

eligible for a HAL auction would 

continue to be treated the same as 

orders that are not eligible today. In 

Hybrid 3.0 classes, such orders would 

be booked (or, if not eligible for book 

entry, routed to PAR, BART or the order 

entry firm’s booth printer). For all other 

Hybrid classes, the Exchange would 

initiate the linkage process to attempt to 

obtain an NBBO fill for the order from 

an away market or book the order if it 

is not marketable. Also, if the Exchange 

determines that immediate-or-cancel 

(‘‘IOC’’) orders are not eligible for HAL, 

such orders would be automatically 

cancelled to the extent they are not 

immediately executed against the 

Exchange’s existing quotes. 

COA exposes eligible complex orders 

for price improvement. For COA, an 

eligible complex order is currently a 

complex order that, as determined by 

the Exchange on a class-by-class basis, 

is eligible for COA considering the 

order’s marketability (defined as a 

number of ticks away from the current 

market, size, and complex order type as 

defined in paragraph (a) of Rule 6.53C.5

With respect to COA, we are seeking to 

make some cross-reference updates 

related to how a ‘‘COA-eligible order’’ is 

defined. First, we are seeking to modify 

the definition to provide that the 

eligible complex order type determined 

by the Exchange may also be as defined 

in paragraph (b) of Rule 6.53C.6 The 

proposed change modifies the definition 

so that the Exchange can determine 

whether FOK, IOC, AON and GTC 

complex orders are eligible for COA 

auctions. Second, we are seeking to 

modify the definition to provide that the 

Exchange may determine the complex 

order origin types that are eligible for 

COA by adding a cross-reference to 

subparagraph (c)(i) of the Rule (i.e., nonbroker-dealer public customers, brokerdealers that are not Market-Makers or 

specialists on an options exchange, and/ 

or Market-Makers or specialists on an 

options exchange). The proposal would 

not, however, permit the Exchange to 

discriminate among individual market 

participants of the same type (e.g., 

permit certain market-maker orders but 

not others to be eligible for the COA 

auction). The proposed change modifies 

the definition so that the Exchange can 

make determinations on eligible 

complex order origin type with respect 

to both orders into the complex order 

book and into COA. These 

modifications are also consistent with 

Rule 6.13A, which currently allows the 

Exchange to determine which simple 

orders are eligible for SAL based on 

order type and origin code. Any changes 

to the COA-eligible order parameters 

determined by the Exchange would be 

announced to the membership via 

Regulatory Circular. All other 

provisions of the COA rule would apply 

unchanged. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with Section 

6(b) of the Act 7 in general and furthers 

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

Act 8 in particular in that it is designed 

to foster cooperation and coordination 

with persons engaged in regulating, 

clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. In particular, the 

Exchange believes that the proposed 

change would provide more flexibility 

in our HAL and COA rules that is 

consistent with parallel provisions in 

the existing SAL rule. 

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, provided that the selfregulatory organization has given the 

Commission written notice of its intent 

to file 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,9 the proposed rule change 

has become effective pursuant to 

Section 19(b)(3)(A) of the Act 10 and 

Rule 19b-4(f)(6) thereunder.11 At any 

time within 60 days of the filing of such 

proposed rule change, the Commission 

may summarily abrogate such rule 

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47988 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices 

12 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. 57256 

(February 1, 2008), 73 FR 7338 (February 7, 2008). 

4See letter from Andrea Schneider to Florence E. 

Harmon, Acting Secretary, Commission, dated 

February 15, 2008 (‘‘Schneider Letter’’). 

5According to the Exchange, the purpose of 

Amendment No. 2 is to add a more complete list 

of Exchange rules for which the Voluntary 

Professional designation would apply, and to 

provide that the Voluntary Professional designation 

would not be available in Hybrid 3.0 classes. The 

Commission received notice of the withdrawal of 

Amendment No. 1 on July 2, 2008. 

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–2008–82 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, Station Place, 100 F Street, 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR-CBOE–2008–82. 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 publicly available. All 

submissions should refer to File 

Number SR-CBOE–2008–82 and should 

be submitted on or before September 5, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18894 Filed 8–14–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58327; File No. SR–CBOE–

2008–09] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing of 

Amendment No. 2 and Order Granting 

Accelerated Approval to Proposed 

Rule Change, as Modified by 

Amendment No. 2, Establishing a 

Voluntary Professional Designation 

August 7, 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 January 

18, 2008, the Chicago Board Options 

Exchange, Incorporated (‘‘Exchange’’ or 

‘‘CBOE’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

a proposed rule change as described in 

Items I and II below, which Items have 

been prepared substantially by the 

Exchange. The proposed rule change 

was published for comment in the 

Federal Register on February 1, 2008.3

On February 15, 2008, the Commission 

received a comment letter on the 

proposal.4 On July 8, 2008, the 

Exchange filed Amendment No. 2 to the 

proposal.5 The Commission is 

publishing this notice to solicit 

comments on the proposed rule change, 

as modified by Amendment No. 2, from 

interested persons. For the reasons 

discussed below, the Commission is 

granting accelerated approval of the 

proposed rule change as modified. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to adopt a 

‘‘Voluntary Professional’’ designation. 

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’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 III 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to allow nonbroker-dealer customers to voluntarily 

have their orders categorized as brokerdealer orders for order handling, order 

execution, and cancel fee calculation 

purposes. Specifically, these orders 

would be treated as broker-dealer orders 

for purposes of Rules 6.2A (Rapid 

Opening System); 6.2B (Hybrid Opening 

System); 6.9 (Solicited Transactions); 

6.13A (Simple Auction Liaison); 6.45 

(Priority of Bids and Offers—Allocation 

of Trades); 6.13B (Penny Price 

Improvement); 6.45A (Priority and 

Allocation of Equity Option Trades on 

the CBOE Hybrid System) (except that 

Voluntary Professional orders may be 

considered public customer orders, and 

therefore not be subject to the exposure 

requirements for solicited broker-dealer 

orders, under Interpretation and 

Policy.02); 6.45B (Priority and 

Allocation of Trades in Index Options 

and Options on ETFs on the CBOE 

Hybrid System) (except that Voluntary 

Professional orders may be considered 

public customer orders, and therefore 

not be subject to the exposure 

requirements for solicited broker-dealer 

orders, under Interpretation and 

Policy.02); 6.53C(c)(ii) and (d)(v) and 

6.53C.06(b)–(c) (Complex Orders on the 

Hybrid System); 6.74 (Crossing Orders) 

(except that Voluntary Professional 

orders may be considered public 

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