53060 Federal Register / Vol. 73, No. 178 / Friday, September 12, 2008 / Notices 

7See 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. 

8See 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. 

9 15 U.S.C. 78s(b)(3)(A)(ii). 

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

11 15 U.S.C. 78f(b)(4). 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(2). 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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.7

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.8

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 9 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,10 in general, and 

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

of the Act,11 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 12 and 

subparagraph (f)(2) of Rule 19b–4 13

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–2008–93 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–2008–93. 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–2008–93 and should be 

submitted on or before October 3, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–21162 Filed 9–11–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58460; File No. SR–CBOE– 

2008–90] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing of 

Proposed Rule Change Related to 

Trades in Restricted Classes 

September 4, 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 August 

29, 2008, the Chicago Board Options 

Exchange, Incorporated (the ‘‘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 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 


ebenthall on PROD1PC60 with NOTICES
Federal Register / Vol. 73, No. 178 / Friday, September 12, 2008 / Notices 53061 

3 In relevant part, Rule 5.4 provides that, 

whenever the Exchange determines that an 

underlying security previously approved for 

Exchange option transactions does not meet the 

then current requirements for continuance of such 

approval or for any other reason should no longer 

be approved, the Exchange will not open for trading 

any additional series of options of the class 

covering that underlying security and therefore two 

floor officials, in consultation with a designated 

senior executive officer of the Exchange, may 

prohibit any opening purchase transactions in 

series of options of that class previously opened 

(except that (i) opening transactions by MarketMakers executed to accommodate closing 

transactions of other market participants and (ii) 

opening transactions by CBOE member 

organizations to facilitate the closing transactions of 

public customers executed as crosses pursuant to 

and in accordance with paragraph (b) or (d) of Rule 

6.74, Crossing Orders, may be permitted), to the 

extent it deems such action necessary or 

appropriate (such series are referred to herein and 

in the proposed new text in Rules 6.25 and 24.16 

as ‘‘restricted series’’); provided, however, that 

where exceptional circumstances have caused an 

underlying security not to comply with the 

Exchange’s current approval maintenance 

requirements, regarding number of publicly held 

shares or publicly held principal amount, number 

of shareholders, trading volume or market price the 

Exchange, in the interest of maintaining a fair and 

orderly market or for the protection of investors, 

may determine to continue to open additional series 

of option contracts of the class covering that 

underlying security. 

4The senior official in the control room has 

authority to render other determinations elsewhere 

in our rules. For example, if the Hybrid Trading 

System has not opened a series of a class because 

there is no quote present that complies with the 

legal width requirements or the opening price is not 

within an acceptable range, the senior official in the 

control room may authorize the opening of the 

affected series where necessary to ensure a fair and 

orderly market. See paragraph (f) of Rule 6.2B, 

Hybrid Opening System (‘‘HOSS’’). 

5We note that the procedures of other markets 

currently allow for the initiation of an obvious error 

review by contacting designated personnel in their 

respective control rooms. See, e.g., International 

Securities Exchange (‘‘ISE’’) Rule 720, Obvious and 

Catastrophic Errors (which provides that ISE 

members who believe they participated in a 

transaction that was an obvious error must notify 

designated personnel in ISE’s market control center 

to initiate a review). 

6 15 U.S.C. 78f(b)(1). 

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

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Rule 6.25, Nullification and Adjustment 

of Equity Options Transactions, and 

Rule 24.16, Nullification and 

Adjustment of Transactions in Index 

Options, Options on ETFs and Options 

on HOLDRS. The Exchange is proposing 

to amend the rules to permit the 

nullification of opening transactions 

that do not satisfy the requirements of 

Rule 5.4, Withdrawal of Approval of 

Underlying Securities. The Exchange is 

also proposing to amend Rule 5.4 to 

make clear that its restrictions on 

opening transactions, which apply to 

previously opened options series of a 

class that no longer meets the then 

current requirements for trading, apply 

to both opening purchase transactions 

and opening sell transactions. Currently 

the rule text only references opening 

purchase transactions. The text of the 

proposed rule change is available on the 

Exchange’s Web site (http:// 

www.cboe.org/Legal), at the Office of the 

Secretary, CBOE 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 

Exchange 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. The 

Exchange 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 is proposing to amend 

its obvious error rules to permit the 

nullification of opening transactions in 

‘‘restricted series’’ that do not satisfy the 

requirements of Rule 5.4.3 Currently, 

when the Exchange makes a 

determination that trading in a series is 

restricted pursuant to Rule 5.4, the 

Exchange notifies the membership of 

that determination through issuance of 

a regulatory circular. In addition, the 

Exchange’s systems are programmed to 

automatically restrict the entry of 

electronic opening transactions. 

However, opening orders entered in 

open outcry are not systemically 

prevented and, in addition, opening 

market-maker activity is still permitted 

both electronically and in open outcry. 

As a result, it is possible that an opening 

transaction that does not satisfy the 

requirements of Rule 5.4 may occur 

inadvertently. 

In order to address these scenarios, 

the Exchange is proposing to permit the 

nullification of opening transactions in 

a Rule 5.4 restricted series provided 

notification is received by designated 

personnel in the Exchange’s control 

room from any member or person 

associated with a member that believes 

it participated in such transaction 

within the timeframes prescribed in 

Rules 6.25(b)(1) and 24.16(b)(1). In 

addition, absent unusual circumstances, 

designated personnel in the control 

room (either on their own motion or 

upon request of a member) would 

initiate action within sixty (60) minutes 

of such a transaction. Such actions 

would be reviewed and determinations 

rendered by the senior official in the 

control room. The Exchange believes it 

is reasonable and appropriate for the 

senior official to render these decisions 

given the simple and objective nature of 

this particular type of proposed obvious 

error, which involves opening 

transactions in a series in which the 

Exchange has restricted opening trading 

activity pursuant to Rule 5.4.4 The 

Exchange also notes that any 

determinations rendered by the senior 

official would be subject to the same 

review procedures as determinations 

rendered by Trading Officials. 

In connection with this rule change, 

the Exchange is proposing to clarify that 

an obvious error rule action may be 

initiated by a member through 

contacting either a Trading Official or 

designated personnel in the control 

room.5 Currently the rule simply 

references Trading Officials, which 

includes several of the Exchange staff in 

our control room. Thus, for 

administrative convenience, we wish to 

clarify that simply contacting Trading 

Officials or designated personnel in the 

control room is sufficient to initiate 

action. Once either a Trading Official or 

a control room designee is contacted, all 

reviews and determinations shall 

continue to be rendered by the Trading 

Officials except that, as proposed 

herein, actions to nullify an opening 

trade in a restricted series shall be 

reviewed and determinations rendered 

by the senior official in the control 

room. 

Lastly, the Exchange is proposing to 

clarify in the text of Rule 5.4 that the 

restrictions on opening transactions 

contained in the rule, as well as the 

related exceptions, apply to both 

opening purchases and opening sales in 

restricted series. Currently, the rule text 

indicates that the restrictions are 

applicable only to opening purchase 

transactions; however, it is the 

Exchange’s intention that the restriction, 

and related exceptions, should also 

apply to opening sales. Proposed 

changes to the rule text make this clear. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the Act 6 and the rules and regulations 

thereunder and, in particular, the 

requirements of section 6(b) of the Act.7

Specifically, the Exchange believes the 


ebenthall on PROD1PC60 with NOTICES
53062 Federal Register / Vol. 73, No. 178 / Friday, September 12, 2008 / Notices 

8 15 U.S.C. 78f(b)(5). 9 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

proposed rule change is consistent with 

the section 6(b)(5) 8 requirements that 

the rules of an exchange be designed to 

promote just and equitable principles of 

trade, to prevent fraudulent and 

manipulative acts, to remove 

impediments to and to perfect the 

mechanism for a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. The proposed rule 

change would help the Exchange more 

efficiently address scenarios where an 

opening transaction that does not satisfy 

the requirements of Rule 5.4 may occur 

inadvertently. 

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 

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 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the Exchange consents, 

the Commission will: 

(A) By order approve such proposed 

rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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–2008–90 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–2008–90. 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 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 

Number SR–CBOE–2008–90 and should 

be submitted on or before September 29, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–21164 Filed 9–11–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58462; File No. SR–CBOE– 

2008–91] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Inc.; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change by Chicago Board Options 

Exchange, Inc. Amending CBOE Rule 

52.3 

September 4, 2008. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on August 

27, 2008, Chicago Board Options 

Exchange, Inc. (‘‘CBOE’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change described in Items I, and II 

below, which Items have been prepared 

by the Exchange. 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 amend 

CBOE Rule 52.3 in order to clarify a 

circumstance under which the Exchange 

will commence a trading halt in 

Derivative Securities Products listed 

and trading on the Exchange. 

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 these 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. 


ebenthall on PROD1PC60 with NOTICES