54186 Federal Register / Vol. 73, No. 182 / Thursday, September 18, 2008 / Notices 

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

11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

provide the Commission with written notice of its 

intent to file the proposed rule change, along with 

a brief description and text of 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. The 

Exchange has fulfilled this requirement. 

12For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

13See Securities Exchange Act Release Nos. 

58203 (July 22, 2008), 73 FR 43812 (July 28, 2008) 

(SR–NYSEArca–2008–57) and 58204 (July 22, 

2008), 73 FR 43807 (July 28, 2008) (SR–CBOE– 

2008–64). 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

persons engaged in facilitating 

transactions in securities, to remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. The Exchange submits 

that the instant proposal to adopt 

generic initial and continued listing 

criteria for options on Section 107 

Securities will serve to provide 

enhanced risk management tools for 

investors that, to date, have been absent 

in connection with Section 107 

Securities. In addition, the Exchange 

further believes that the proposed listing 

criteria together with the Exchange’s 

surveillance procedures will serve to 

protect investors and the public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

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 

nor 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 proposed rule 

change: (1) Does not significantly affect 

the protection of investors or the public 

interest; (2) does not impose any 

significant burden on competition; and 

(3) by its terms does not become 

operative for 30 days after the date of 

this filing, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest, 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

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative for 30 days after the 

date of filing. However, Rule 19b– 

4(f)(6)(iii) permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange requests that the Commission 

waive the 30-day operative delay so that 

the Exchange is able to compete with 

other options exchanges that are 

currently permitted to list and trade 

options on Section 107 Securities. The 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest.12 The Commission notes 

the proposal is substantively identical to 

proposals that were recently approved 

by the Commission, and does not raise 

any new regulatory issues.13 For these 

reasons, the Commission designates the 

proposed rule change as operative upon 

filing. 

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–Amex–2008–69 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–Amex–2008–69. 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–Amex–2008–69 and should 

be submitted on or before October 9, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–21761 Filed 9–17–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58513; File No. SR–CBOE– 

2008–92] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to Hybrid 

Electronic Quoting Fee 

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 August 

29, 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 CBOE. The Commission is 

publishing this notice to solicit 


dwashington3 on PRODPC61 with NOTICES
Federal Register / Vol. 73, No. 182 / Thursday, September 18, 2008 / Notices 54187 

3See Securities Exchange Act Release No. 34– 

56927 (12/7/07), 72 FR 70912 (12/13/07), granting 

immediate effectiveness to SR–CBOE–2007–145. 

4See Securities Exchange Act Release No. 34– 

58153 (7/14/08), 73 FR 41386 (7/18/08), granting 

immediate effectiveness to SR–CBOE–2008–67. 

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

6 15 U.S.C. 78f(b)(4). 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f)(2). 

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 

CBOE is proposing to amend its 

Hybrid Electronic Quoting Fee. 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 those 

statements may be examined at the 

places specified in Item IV below. The 

CBOE 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 

The purpose of this proposed rule 

change is to amend CBOE’s Hybrid 

Electronic Quoting Fee (‘‘Quoting Fee’’), 

which is applicable to all MarketMakers, DPMs, and e-DPMs (collectively 

‘‘liquidity providers’’) in order to 

promote and encourage more efficient 

quoting. 

Under the current Quoting Fee, CBOE 

assesses all liquidity providers who are 

submitting electronic quotations to 

CBOE in Hybrid option classes a 

monthly amount of $450 per 

membership utilized.3 CBOE also 

assesses or credits fees on liquidity 

providers that vary depending on: (i) the 

quality of the liquidity provider’s 

quotation (a quotation is a bid and an 

offer); and (ii) the value of the 

underlying security and CBOE’s bid in 

the option series. The Quoting Fee 

provides that a liquidity provider’s total 

credits cannot exceed the total debits 

assessed. If the total credits were to 

exceed the total debits, the Quoting Fee 

assessed to that liquidity provider 

would be $450. 

CBOE now proposes to amend the 

Quoting Fee and establish a cap of 

$50,000 on the amount a liquidity 

provider’s total credits can exceed the 

total debits assessed. If the liquidity 

provider is a member organization 

utilizing more than one membership, 

the $50,000 cap is applied per member 

organization. CBOE believes that 

establishing a cap of $50,000 will serve 

as an incentive to liquidity providers to 

submit competitive quotations, and that 

the Quoting Fee will continue to 

promote and encourage more efficient 

quoting and help to reduce quote traffic. 

Additionally, CBOE proposes to make 

a technical change to Section 17 and 

delete the reference to ‘‘Hybrid 2.0,’’ 

which CBOE recently deleted from its 

rules.4

The Exchange intends to implement 

this revised Quoting Fee effective 

September 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’’) 5, in general, and furthers 

the objectives of Section 6(b)(4) 6 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. In particular, 

CBOE believes the establishment of a 

$50,000 cap on the amount a liquidity 

provider’s total credits can exceed the 

total debits assessed is an equitable 

allocation of reasonable dues and fees in 

that it will serve as an incentive to 

liquidity providers to submit 

competitive quotations. CBOE also 

believes that the Quoting Fee will 

continue to promote and encourage 

more efficient quoting and help to 

reduce quote traffic. 

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 

The foregoing rule change has become 

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

of the Act 7 and subparagraph (f)(2) of 

Rule 19b–4 8 thereunder. 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–2008–92 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–2008–92. 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. 


dwashington3 on PRODPC61 with NOTICES
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