54188 Federal Register / Vol. 73, No. 182 / Thursday, September 18, 2008 / Notices 

9 17 CFR 200.30–3(a)(12). 

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). 

5CBOE notes that it increases the CQL in 

products infrequently, and when it does, members 

on the wait-list have first priority. 

Copies of such 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–2008–92 and should 

be submitted on or before October 9, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–21759 Filed 9–17–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58519; File No. SR–CBOE– 

2008–84] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Rule 8.3A 

Pertaining to Class Quoting Limits 

September 11, 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 

September 8, 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 amend 

CBOE Rule 8.3A pertaining to Class 

Quoting Limits. 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

CBOE Rule 8.3A establishes the upper 

limit, i.e., Class Quoting Limit (‘‘CQL’’), 

on the number of members that may 

quote electronically in a particular 

product traded on CBOE’s Hybrid 

Trading System. The purpose of this 

rule change is to amend Interpretations 

.01 and .03 of CBOE Rule 8.3A. 

First, CBOE proposes to amend 

Interpretation .01(b) which generally 

provides that CBOE’s President may 

increase the CQL when ‘‘exceptional 

circumstances’’ warrant. Interpretation 

.01(b) states that ‘‘exceptional 

circumstances’’ refers to substantial 

trading volume, whether actual or 

expected (e.g., in the case of a new 

product or a major news 

announcement). Interpretation .01(b) 

also provides that when the 

‘‘exceptional circumstances’’ cease, the 

President can reduce the CQL, and 

includes fair procedures for how such a 

reduction would occur. CBOE believes 

that there may be circumstances in 

which it would be appropriate to 

increase the CQL in a particular product 

even though it may not be apparent that 

there has been, or will be, a substantial 

change in trading volume in the 

product. For example, there may be 

circumstances in which a product is not 

experiencing a substantial change in 

trading volume and yet additional 

members may want to quote 

electronically in the product. Provided 

CBOE’s trading systems can handle the 

increase and CBOE’s President 

determines that it would be appropriate, 

CBOE should be permitted to increase 

the CQL in that product.5 Similarly, 

CBOE believes that the President should 

be allowed to decrease the CQL in 

appropriate circumstances, particularly 

in those cases where the CQL previously 

has been increased and provided such 

increase is no longer needed. 

Accordingly, CBOE proposes to 

amend Interpretation .01(b) to provide 

that CBOE’s President (or his designee) 

can increase or decrease the CQL in an 

existing or new product when he/she 

determines it would be appropriate. One 

of the factors that would be considered 

is the trading volume of the product. 

CBOE believes that amending 

Interpretation .01(b) as proposed is 

procompetitive, as it provides more 

flexibility in determining when to 

increase the CQL and thus allow more 

electronic quoters in a particular 

product. It is also consistent with the 

purpose of maintaining a CQL, which is 

to limit the number of members that are 

quoting electronically in a particular 

product to ensure that the Exchange has 

the ability to effectively handle all 

quotes generated by members. CBOE’s 

President certainly can determine 

whether CBOE’s systems can effectively 

handle the increase in quote message 

traffic caused by an increase in the CQL 

when the President determines that the 

increase would be appropriate. CBOE is 

not proposing to change the procedures 

for decreasing a CQL that are currently 

contained in Interpretation .01(b). 

Second, CBOE proposes to clarify and 

amend Interpretation .03, which 

provides that in the event a MarketMaker has not submitted any electronic 

quotations in an appointed option class 

during the preceding 30 calendar days, 

then the Market-Maker’s appointment in 

that option class will be terminated 

effective immediately. Interpretation .03 

expressly states that it only applies to 

those option classes in which the CQL 

for the option class is full and there is 

a wait-list of member(s) requesting the 

ability to quote electronically in the 

option class, and that CBOE will notify 

the Market-Maker prior to terminating 

its appointment. 

In adopting the interpretation, it was 

not CBOE’s intention to allow a MarketMaker, who has chosen not to submit 

any electronic quotations in an 

appointed option class during the 

preceding 30 calendar days, to be able 

to preserve the Market-Maker’s 

appointment in the option class by 

submitting one or more electronic 

quotes and then to discontinue quoting, 

thereby avoiding the termination. 


dwashington3 on PRODPC61 with NOTICES
Federal Register / Vol. 73, No. 182 / Thursday, September 18, 2008 / Notices 54189 

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

7CBOE fulfilled this requirement. 

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

9 17 CFR 240.19b–4(f)(6). 10 17 CFR 200.30–3(a)(12). 

Accordingly, CBOE proposes to amend 

Interpretation .03 to provide that CBOE 

will notify the Market-Maker that the 

Market-Maker’s appointment has been 

terminated, as opposed to providing 

notification prior to termination. The 

rule text itself provides effective 

notification to Market-Makers that their 

appointment in an option class will be 

terminated if they have not submitted 

any electronic quotations in the 

appointed option class during the 

preceding 30 calendar days. CBOE notes 

that the circumstances giving rise to this 

Interpretation do not occur frequently. 

CBOE also believes that amending 

Interpretation .03 as proposed promotes 

competition, as it would allow other 

members who are ready and willing to 

provide competitive quotations and 

liquidity in an option class, in the place 

of a Market-Maker who chooses not to 

submit any electronic quotations in the 

option class for at least 30 calendar 

days. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

under the Act applicable to a national 

securities exchange and, in particular, 

the requirements of Section 6(b) of the 

Act. Specifically, the Exchange believes 

the proposed rule change is consistent 

with the Section 6(b)(5) Act6

requirements that the rules of an 

exchange be designed to promote just 

and equitable principles of trade, to 

prevent fraudulent and manipulative 

acts and, in general, to protect investors 

and the public interest. Granting CBOE’s 

President the authority to increase or 

decrease the CQL in an option class 

when he deems it appropriate promotes 

competition and also ensures that the 

integrity of CBOE’s trading systems are 

protected. Similarly, terminating a 

Market-Maker’s appointment when the 

Market-Maker has elected not to submit 

electronic quotations in an option class 

for 30 calendar days also promotes 

competition in that it will provide an 

opportunity to other Market-Makers 

who are ready and willing to provide 

competitive quotations and liquidity in 

the option class. 

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,7 the proposed rule change 

has become effective pursuant to 

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

19b–4(f)(6) thereunder.9 At any time 

within 60 days of the filing of such 

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–2008–84 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–2008–84. 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 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–2008–84 and should 

be submitted on or before October 9, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–21766 Filed 9–17–08; 8:45 am] 

BILLING CODE 8010–01–P 


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