Federal Register / Vol. 73, No. 27 / Friday, February 8, 2008 / Notices 7617 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 57034 

(December 21, 2007), 72 FR 74398. 

4A Streaming Quote Trader (‘‘SQT’’) is a 

Registered Options Trader (‘‘ROT’’) that has 

received permission from the Exchange to generate 

and submit electronic option quotations 

electronically via an Exchange approved quoting 

device. See Exchange Rule 1014(b)(ii)(A). Non-SQT 

ROTs do not stream electronic quotations but make 

verbal markets upon request and have the ability to 

send limit orders to the limit order book via 

electronic interface with Phlx XL. 

5 In approving this proposal, the Commission 

considered the proposed rule’s impact on 

efficiency, competition and capital formation. 15 

U.S.C. 78c(f). 

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

7 15 U.S.C. 78s(b)(2). 

8 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). 

5The Montre ́al Exchange Inc. is also known in 

French as the Bourse de Montre ́al Inc. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–57263; File No. SR–Phlx–

2007–91] 

Self-Regulatory Organizations; 

Philadelphia Stock Exchange, Inc; 

Order Approving a Proposed Rule 

Change to Require a Non-Streaming 

Quote Trader Registered Option 

Traders (‘‘non-SQT ROT’’) to Submit a 

List of Options for Intended 

Assignment 

February 4, 2008. 

On December 12, 2007, the 

Philadelphia Stock Exchange, Inc. 

(‘‘Phlx’’ or ‘‘Exchange’’), filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’)1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend Exchange Rule 1014(b)(ii)(C) to 

require ‘‘non-SQT ROTs’’ (as defined 

below) to submit to the Exchange a list 

of the options in which such non-SQT 

ROT intends to be assigned to make 

markets. The proposed rule change was 

published for comment in the Federal 

Register on December 31, 2007.3 The 

Commission received no comments on 

the proposal. 

PHLX proposes to amend Exchange 

Rule 1014(b)(ii)(C) to require ‘‘non-SQT 

ROTs’’ 4 to notify the Exchange of each 

option, on an issue-by-issue basis, it 

intends to be assigned to make markets. 

Such notification would need to be 

made in writing on a form prescribed by 

the Exchange (an ‘‘ROT Assignment 

Form’’). Any change to the ROT 

Assignment Form would have to be 

made in writing by the non-SQT ROT 

prior to the end of the trading session 

in which the change is to take place. 

Receipt of the properly completed ROT 

Assignment Form from a qualified nonSQT ROT applicant would constitute 

acceptance by the Exchange of the nonSQT ROT’s assignment in, or 

termination of assignment in (as 

indicated on the ROT Assignment 

Form), the options listed on such ROT 

Assignment Form. If a non-SQT ROT 

applicant failed to qualify as an ROT on 

the Exchange, such assignments would 

be rendered ineffective and would be 

terminated. The proposed rule change is 

designed to facilitate the Exchange’s 

ability to track the activities of non-SQT 

ROTs. 

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.5 In particular, the 

Commission finds that the proposed 

rule change is consistent with section 

6(b)(5) of the Act,6 which requires, 

among other things, that the Exchange’s 

rules be designed to promote just and 

equitable principles of trade, to remove 

impediments to and 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 Commission 

believes that the proposed notification 

requirement will assist the Exchange in 

monitoring the activities of non-SQT 

ROTs and should contribute to the 

Exchange’s efforts to enhance the fair 

and orderly operation of the Exchange’s 

market. 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Act,7 that the 

proposed rule change (File No. SR–

Phlx–2007–91) hereby is approved. 

Florence E. Harmon, 

Deputy Secretary. 

For the Commission, by the Division 

of Trading and Markets, pursuant to 

delegated authority.8

[FR Doc. E8–2346 Filed 2–7–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–57260; File No. SR–BSE–

2008–06] 

Self-Regulatory Organizations; Boston 

Stock Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change Regarding a 

Proposed Combination Between the 

Montre ́al Exchange Inc. and TSX 

Group Inc. 

February 1, 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 

29, 2008, the Boston Stock Exchange, 

Inc. (‘‘BSE’’ or ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by BSE. 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 which renders the proposal 

effective upon filing with the 

Commission. 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 is submitting the 

proposed rule change to the 

Commission to amend the Fifth 

Amended and Restated Operating 

Agreement, dated January 26, 2005, as 

may be amended from time to time 

(‘‘BOX LLC Agreement’’), of the Boston 

Options Exchange Group LLC (‘‘BOX 

LLC’’), in connection with the proposed 

business combination (the 

‘‘Combination’’) of the Montre ́al 

Exchange Inc.,5 a company incorporated 

in Que ́bec, Canada (‘‘MX’’), and TSX 

Group Inc., a company incorporated in 

Ontario, Canada (‘‘TSX Group’’). The 

text of the rule proposal, including the 

proposed Instrument of Accession, is 

available on the Exchange’s Web site 

(http://www.bostonstock.com), at the 

Exchange, 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, BSE 

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. BSE has prepared 

summaries, set forth in Sections A, B, 

and C below, of the most significant 

aspects of such statements. 


pwalker on PROD1PC71 with NOTICES
7618 Federal Register / Vol. 73, No. 27 / Friday, February 8, 2008 / Notices 

6See Securities Exchange Act Release Nos. 49066 

(January 13, 2004), 69 FR 2773 (January 20, 2004) 

(establishing a fee schedule for the proposed BOX 

facility); 49065 (January 13, 2004), 69 FR 2768 

(January 20, 2004) (creating Boston Options 

Exchange Regulation LLC to which the BSE would 

delegate its self-regulatory functions with respect to 

the BOX facility); 49068 (January 13, 2004), 69 FR 

2775 (January 20, 2004) (approving trading rules for 

the BOX facility); and 49067 (January 13, 2004), 69 

FR 2761 (January 20, 2004) (approving certain 

regulatory provisions of the operating agreement of 

BOX LLC). 

7Certain non-voting preference shares of MX will 

be owned by TSX Inc., a direct, wholly owned 

subsidiary of TSX Group. The share interests of 

TSX Group and TSX Inc. will together represent the 

entire ownership interest, voting and non-voting, in 

MX. 

8At its next shareholders’ meeting after the 

effective date of the Combination, TSX Group will 

propose changing its name to TMX Group Inc. 

9The term ‘‘amalgamation’’ refers to the 

combination of two or more business entities into 

a single entity pursuant to which the combined 

entity becomes the successor in interest, by 

operation of law, to the rights and obligations of the 

combining entities. Amalgamations are commonly 

used in Canada to effect business combinations and 

are similar to mergers in the United States. 

10Organizational changes contemplated in 

connection with the Combination are described in 

the TSX Group registration statement separately 

filed with the Commission regarding the issuance 

of shares in connection with the Combination. 

11An ‘‘Acquirer’’ is defined as ‘‘a Person who, 

alone or together with any Affiliate of such Person, 

acquires a controlling interest in a Member.’’ See 

BOX LLC Agreement, Section 8.4(g)(ii). 

12A ‘‘Controlling Interest’’ is defined as ‘‘the 

ownership by any Person, alone or together with 

any Affiliate of such Person, of a 25% or greater 

interest in a Member.’’ See BOX LLC Agreement, 

Section 8.4(g)(i). 

13The BOX LLC Agreement states, in part, that 

‘‘the Members, officers, directors, agents, and 

employees of Members irrevocably submit to the 

exclusive jurisdiction of the U.S. federal courts, 

U.S. Securities and Exchange Commission, and the 

Boston Stock Exchange, for the purposes of any 

suit, action or proceeding pursuant to U.S. federal 

securities laws, the rules or regulations thereunder, 

arising out of, or relating to, BOX activities or 

Article 19.6(a), (except that such jurisdictions shall 

also include Delaware for any such matter relating 

to the organization or internal affairs of BOX, 

provided that such matter is not related to trading 

on, or the regulation, of the BOX Market), and 

hereby waive, and agree not to assert by way of 

motion, as a defense or otherwise in any such suit, 

action or proceeding, any claims that they are not 

personally subject to the jurisdiction of the U.S. 

Securities and Exchange Commission, that the suit, 

action or proceeding is an inconvenient forum or 

that the venue of the suit, action or proceeding is 

improper, or that the subject matter hereof may not 

be enforced in or by such courts or agency.’’ See 

BOX LLC Agreement, Section 19.6. 

14 15 U.S.C. 78s(b)(3)(A). 

15 17 CFR 240.19b–4(f)(6). 

16 15 U.S.C. 78f(b). 

17 15 U.S.C. 78f(b)(1). 

18 15 U.S.C. 78f(b)(5). 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

On January 13, 2004, the Commission 

approved four BSE proposals that 

together established, through an 

operating agreement among its owners, 

a Delaware limited liability company, 

BOX LLC, to operate BOX as an options 

trading facility of the Exchange.6

Currently, MX U.S. 2, Inc., a wholly 

owned U.S. subsidiary of MX (‘‘MX 

US’’), owns a 31.4% ownership interest 

in BOX LLC. 

The Exchange is submitting the 

proposed rule change to the 

Commission to amend the BOX LLC 

Agreement pursuant to the proposed 

Instrument of Accession in connection 

with the Combination of MX, the largest 

derivatives exchange in Canada, and 

TSX Group, which, among other things, 

owns Canada’s pre-eminent equity 

market. As a result of the Combination, 

MX will become a direct 7 subsidiary of 

TSX Group, a publicly traded Ontario 

corporation.8

The Combination will be effected 

through a series of amalgamations 9

involving intermediate holding 

companies, which will cease to exist 

following completion of the 

Combination. As a result of these 

transactions, MX will be amalgamated 

with a direct subsidiary of TSX Group. 

The amalgamated company also will be 

named Montre ́al Exchange Inc. and will 

be a Que ́bec corporation. Consequently, 

MX U.S. (including MX US’s 31.4% 

ownership interest in BOX LLC) will 

become an indirect, wholly owned 

subsidiary of TSX Group. The 

Combination is subject to the approval 

of the Autorite ́ des marche ́s financiers 

(the securities regulator for the province 

of Que ́bec, Canada) and the 

shareholders of MX, as well as other 

regulatory approvals. 

Following the Combination, MX, MX 

US, and TSX Group will continue to 

operate their respective businesses in 

substantially the same manner as they 

had prior to the Combination, and MX 

and MX US senior management will 

remain under the stewardship of MX’s 

current chief executive officer.10

Additionally, the operations of each of 

MX and TSX Group will continue to be 

located in the same province in which 

it is currently located, and each will 

remain subject to its existing regulatory 

framework and oversight. Consequently, 

MX US’s management of its ownership 

interest in BOX shall remain essentially 

unaffected by the Combination. 

Pursuant to Section 8.4(g) of the BOX 

LLC Agreement, BOX LLC is required to 

amend the BOX LLC Agreement to make 

an Acquirer 11 a party to the LLC 

Agreement if such Acquirer acquires a 

Controlling Interest 12 in a BOX Member 

who holds a percentage interest in BOX 

LLC equal to or greater than 20%. 

Therefore, since TSX Group is acquiring 

a Controlling Interest in MX, whose 

wholly owned subsidiary, MX US, owns 

a 31.4% ownership interest in BOX 

LLC, TSX Group, as an Acquirer, is 

required to and will become a party to 

the BOX LLC Agreement pursuant to the 

proposed Instrument of Accession. As a 

result, TSX Group will agree to abide by 

all the provisions of the BOX LLC 

Agreement, including those provisions 

requiring submission to the jurisdiction 

of the Commission.13

For the reasons stated above, BSE is 

submitting to the Commission the 

proposed Instrument of Accession, 

which constitutes an amendment to the 

BOX LLC Agreement, as a rule change. 

The proposed rule change is subject to 

becoming effective and operative 

pursuant to Section 19(b)(3)(A) of the 

Act 14 and Rule 19b–4(f)(6) 15

thereunder. BSE proposes to make this 

proposal operative upon the 

consummation of the Combination, 

currently anticipated in late February 

2008. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the 

Act,16 in general, and furthers the 

objectives of Section 6(b)(1),17 in 

particular, in that it enables the 

Exchange to be so organized so as to 

have the capacity to be able to carry out 

the purposes of the Act and to comply, 

and to enforce compliance by its 

exchange members and persons 

associated with its exchange members, 

with the provisions of the Act, the rules 

and regulations thereunder, and the 

rules of the Exchange. 

The Exchange also believes that this 

filing furthers the objectives of Section 

6(b)(5) of the Act 18 in that it is designed 

to facilitate transactions in securities, to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, 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. 

Additionally, the Exchange notes that 

the provisions of the BOX LLC 

Agreement, previously approved by the 

Commission, provide a framework for 

addressing the Combination. 

Accordingly, BSE believes the 

Combination does not present any novel 


pwalker on PROD1PC71 with NOTICES
Federal Register / Vol. 73, No. 27 / Friday, February 8, 2008 / Notices 7619 

19 15 U.S.C. 78s(b)(3)(A). 

20 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–

4(f)(6)(iii) requires that a self-regulatory 

organization submit to the Commission 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 Commission notes that BSE has 

satisfied the five-day pre-filing notice requirement. 

21 17 CFR 240.19b–4(f)(6). 

22 17 CFR 240.19b–4(f)(6)(iii). 

23For the 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). 

24 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

issues that have not been anticipated 

and addressed by the BOX LLC 

Agreement. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange 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 has neither solicited 

nor received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change 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, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 19 and Rule 19b–

4(f)(6) thereunder.20

Normally, a proposed rule change 

filed under Rule 19b–4(f)(6) 21 may not 

become operative prior to 30 days after 

the date of filing. However, Rule 19b–

4(f)(6)(iii) 22 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange has requested that the 

Commission waive the 30-day operative 

delay. In its filing, the Exchange 

requested waiver of the 30-day operative 

delay because the MX shareholders are 

expected to approve the Combination on 

February 13, 2008 and subsequent 

thereto the Combination is expected to 

close in late February of 2008. 

Furthermore, BSE believes the 

Combination does not present any novel 

issues that have not been anticipated 

and addressed by the BOX LLC 

Agreement. 

The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest 

because the proposed rule change will 

allow the Exchange to proceed with the 

Combination, without undue delay, in a 

manner consistent with the provisions 

of the BOX LLC Operating Agreement. 

Accordingly, consistent with the 

protection of investors and the public 

interest, the Commission designates the 

proposed rule change to be operative 

upon consummation of the 

Combination.23

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–BSE–2008–06 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–BSE–2008–06. 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 BSE. 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–BSE–2008–06 and should 

be submitted on or before February 29, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E8–2329 Filed 2–7–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–57261; File No. SR–CBOE–

2008–05] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Order Granting Accelerated Approval 

of Proposed Rule Change as Modified 

by Amendment No. 1 Thereto To Allow 

CBOE to List Up to Seven Expiration 

Months for Reduced-Value and Jumbo 

Options That Overlie Broad-Based 

Security Indexes for Which Full-Value 

Options are Used by CBOE To 

Calculate a Constant Three-Month 

Volatility Index 

February 1, 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 

14, 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 and II 

below, which Items have been 


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