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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Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices 47989 

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

7 In approving this proposed rule change the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

8See Securities Exchange Act Release No. 57553 

(March 25, 2008), 73 FR 16916 (March 31, 2008) 

(SR–ISE–2007–76). 

customer orders subject to facilitation 

under paragraphs (b) and (d)); 6.74A 

(Automated Improvement Mechanism) 

(except that Voluntary Professional 

orders may be considered customer 

Agency Orders or solicited orders 

eligible for customer-to-customer 

immediate crosses under Interpretation 

and Policy.09); 6.74B (Solicitation 

Auction Mechanism); 8.13 (Preferred 

Market-Maker Program); 8.15B 

(Participation Entitlement of LMMs); 

8.87 (Participation Entitlement of DPMs 

and e-DPMs); 24.19 (Multi-Class BroadBased Index Option Spread Orders); 

43.1 (Matching Algorithm/Priority); 44.4 

(Obligations of SBT Market-Makers); 

and 44.14 (SBT DPM Obligations). 

Lastly, the Voluntary Professional 

designation would not be available in 

Hybrid 3.0 classes. 

Some Exchange users have requested 

the flexibility to voluntarily designate 

their orders as broker-dealer orders 

because it is more suitable to their 

trading strategies, which involve highvolume order submission and 

cancellation. Except as noted above, the 

orders of these Voluntary Professionals 

would participate in trades on the same 

terms as broker-dealer orders for 

purposes of the rules set forth above. 

Orders from Voluntary Professionals 

would continue to be treated as public 

customer orders for purposes of the 

linkage-related rules. 

With respect to linkage-related rules, 

CBOE states that it would provide the 

same away-market protection for orders 

from Voluntary Professionals as for 

orders from public customers. In 

addition, orders from Voluntary 

Professionals that are cancelled would 

not be counted as public customer order 

cancellations in connection with the 

cancellation fee charged to clearing 

members. It is expected that member 

firms seeking to facilitate customer use 

of this new designation would mark 

these orders with a new origin code to 

be provided by the Exchange. The 

Exchange intends to establish, in a 

separate rule filing under Section 19(b) 

of the Act, a transaction fee applicable 

to Voluntary Professionals and the 

Exchange would not commence the 

Voluntary Professional program until 

such fee was in place. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act in general and 

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

of the Act 6 in particular in that it is 

designed to promote just and equitable 

principles of trade, serve to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and 

protect investors and the public interest. 

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 did not solicit or 

receive written comments with respect 

to the proposed rule change. 

III. 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–2008–09 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–2008–09. 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 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–2008–09 and should 

be submitted on or before September 5, 

2008. 

IV. Commission Findings and Order 

Granting Accelerated Approval of 

Proposed Rule Change 

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 and, in particular, the 

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

Act, which requires that the rules of a 

national securities exchange, among 

other things, be designed to promote 

just and equitable principles of trade, 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; and not be designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers.7

The Commission notes that it recently 

approved a substantially similar 

proposal by the International Securities 

Exchange, LLC (‘‘ISE’’) to create a 

Voluntary Professional category.8 The 

grounds upon which the Commission 

based its approval of the ISE proposal 

apply equally to the CBOE proposal. 

Under the proposed rule change, a 

public customer could elect to be 

designated as a Voluntary Professional. 

One of the consequences of electing this 

designation is that a customer’s orders 

no longer would be subject to CBOE’s 

cancellation fees. Thus, choosing to 

become a Voluntary Professional could 

represent significant savings for a public 

customer whose trading strategy 

involves placing, and then cancelling, 

orders frequently. 

By electing to become a Voluntary 

Professional, a public customer would 

also cede priority rights normally 

granted to public customer orders. 

Importantly, however, this result is 

determined solely by the choice of the 

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47990 Federal Register / Vol. 73, No. 159 / Friday, August 15, 2008 / Notices 

9See Schneider Letter, supra note 4. 

10See Securities Exchange Act Release No. 44607 

(July 27, 2001), 66 FR 40757 (August 3, 2001) (SR–

CBOE–2001–40) (establishing the CBOE Order 

Routing System cancellation fee). 

11See supra note 8. 

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. 57986 

(June 18, 2008), 73 FR 36363 (‘‘Notice’’). 

4See letters from Verdun Edgtton, Vice President 

and Corporate Governance Officer, The Bank of 

New York Mellon, to Secretary, Commission, dated 

July 17, 2008 (‘‘BNYMellon Letter’’); Sam Guidetti, 

Director of Compliance, Hill, Thompson, Magid & 

Co., to Florence E. Harmon, Acting Secretary, 

Commission, dated July 15, 2008 (‘‘Hill Thompson 

Letter’’); Peter Coolidge, Portfolio Manager, Deltec 

Special Situations Partners, L.P., to Secretary, 

Commission, dated July 9, 2008 (‘‘Deltec Letter’’); 

R. Cromwell Coulson, Chief Executive Officer, Pink 

OTC Markets, to Secretary, Commission, dated July 

7, 2008 (‘‘Pink OTC Markets Letter’’); and Robert 

Arancio, President, and Kimberly Unger, Executive 

Director, The Security Traders Association of New 

York, to Secretary, Commission, dated June 27, 

2008 (‘‘STANY Letter’’). 

5See NASD Rule 6620(a). For purposes of the 

NASD Rule 6600 Series, ‘‘OTC Equity Securities’’

means equity securities for which real-time trade 

reporting is not otherwise required. See NASD Rule 

6600. NASD Rule 6610(d) further defines ‘‘OTC 

Equity Security’’ as ‘‘any non-exchange-listed 

security and certain exchange-listed securities that 

do not otherwise qualify for real-time trade 

reporting.’’

6See NASD Rule 6620(a)(3)(C)(iii). Although not 

required, a member may choose to report 

transactions in foreign securities within 90 seconds 

of execution. See NASD Rule 6620 n.1. 

7See NASD Rule 6530(b)(1). 

customer, and may be rescinded at a 

customer’s election. 

The commenter questioned how the 

proposed rule change would benefit 

public customers.9 The commenter 

maintained that if CBOE is willing to 

forgive its cancellation fees, ‘‘then 

* * * there was never a problem with 

cancels from public customers but only 

[the Exchange] trying to concentrate 

power and punish the public customer.’’

The Commission is not today 

considering CBOE’s cancellation fee.10

Instead, the Commission is approving a 

proposed rule change that would give 

public customers more flexibility in 

how they participate in CBOE’s 

marketplace. In sum, the Commission 

believes that the proposed rule change 

would provide an additional choice to 

public customers. 

The Commission finds good cause for 

approving the proposed rule change 

prior to the thirtieth day after the date 

of publication of notice of filing thereof 

in the Federal Register. The 

Commission believes that accelerated 

approval of the Exchange’s proposal 

relating to Voluntary Professionals is 

appropriate because it is similar to an 

ISE rule that recently was approved by 

the Commission.11 The Commission 

believes that CBOE’s proposal does not 

raise any new issues that were not 

considered by the Commission in 

connection with the ISE proposal. 

It is therefore ordered, pursuant to 

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

proposed rule change (SR–CBOE–2008–

09), as modified by Amendment No. 2, 

be, and hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18895 Filed 8–14–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58331; File No. SR–FINRA–

2008–016] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving a 

Proposed Rule Change To Align the 

Reporting Requirements and 

Dissemination Protocols for OTC 

Equity Transactions Involving Foreign 

Securities With All Other OTC Equity 

Securities 

August 8, 2008. 

I. Introduction 

On April 25, 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 (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’ or 

‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 a proposal: (1) To amend 

NASD Rule 6620 to align the reporting 

requirements for over-the-counter 

(‘‘OTC’’) equity transactions involving 

foreign securities with the reporting 

requirements for other OTC equity 

transactions; and (2) to align the 

dissemination protocols for all last sale 

reports of OTC equity transactions. On 

June 12, 2008, FINRA submitted 

Amendment No. 1 to the proposed rule 

change. The proposal was published for 

comment in the Federal Register on 

June 26, 2008.3 The Commission 

received five comments regarding the 

proposal.4 This order approves the 

proposed rule change, as modified by 

Amendment No. 1. 

II. Description of the Proposed Rule 

Change 

Currently, NASD rules require that 

transactions in OTC Equity Securities 

(which term encompasses domestic 

equity securities, American Depositary 

Receipts (‘‘ADRs’’), and Canadian 

issues) that are executed between 8 a.m. 

and 8 p.m. Eastern Time be reported to 

the OTC Reporting Facility within 90 

seconds of execution.5 Thus, 

transactions in all ADRs and Canadian 

issues, including those that are not 

registered with the Commission and 

thus are not subject to the Commission’s 

reporting requirements, are subject to 

90-second reporting under NASD Rule 

6620. Transactions in all other foreign 

equity securities are excluded from the 

90-second reporting requirement and 

instead must be reported by 1:30 p.m. 

Eastern Time the day after the 

transaction is executed.6

Last sale information for transactions 

in domestic OTC Equity Securities 

reported pursuant to Rule 6620 is 

disseminated on a real-time basis, 

irrespective of whether the security is 

registered with the Commission. 

However, there is no uniformity 

regarding the dissemination of last sale 

information for transactions in ADRs 

and foreign securities. Last sale reports 

of ADRs and Canadian issues that are 

quoted on the OTC Bulletin Board 

(‘‘OTCBB’’), which has an eligibility 

requirement that OTCBB issuers must 

be reporting issuers,7 are disseminated 

on a real-time basis. However, only 

summary information is disseminated at 

the end of each trading day for OTC 

ADRs and Canadian issues that are not 

quoted on the OTCBB, whether or not 

they are registered with the 

Commission. Transactions in foreign 

securities, other than Canadian issues 

and ADRs, that are quoted on the 

OTCBB are disseminated on a real-time 

basis if they are received on the day of 

the trade. However, as noted above, 

there is no current requirement to report 

these trades to FINRA within 90 

seconds of execution, or even on the 

trade date. If an OTC transaction in a 

foreign security is not reported on the 

trade date, last sale information for that 

transaction is not disseminated. 

FINRA now proposes: (1) To require 

all transactions in OTC Equity 

Securities to be reported within 90 

seconds of execution; and (2) to 

mstockstill on PROD1PC66 with NOTICES