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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7620 Federal Register / Vol. 73, No. 27 / Friday, February 8, 2008 / Notices 

3See Securities Exchange Act Release No. 56821 

(November 20, 2007), 72 FR 66210 (November 27, 

2007) (SR–CBOE–2007–82) (‘‘Seven Month 

Approval Order’’). 

4Currently, CBOE calculates only one threemonth volatility index, the CBOE S&P 500 ThreeMonth Volatility Index (‘‘VXV’’), based on SPX 

options. Therefore, only SPX options are eligible for 

the addition of a seventh contract month in order 

to maintain four consecutive near term contract 

months and three quarterly cycle contract months. 

5See e.g., Securities Exchange Act Release No. 

32893 (September 14, 1993), 58 FR 49070 

(September 21, 1993) (‘‘Consistent with Exchange 

Rule 24.9, ’Terms of Option Contracts,’ the CBOE 

proposes to list reduced-value SPX options expiring 

in the same quarterly cycle as full-value SPX 

options and to list expirations in the current and 

next two succeeding calendar months.’’). 

6Because the Exchange currently only calculates 

one three-month volatility index (the CBOE S&P 

500 Three-Month Volatility Index (‘‘VXV’’) based 

on SPX options) the current proposal would only 

apply to Mini-SPX Index (‘‘XSP’’) options. 

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

8 15 U.S.C. 78f(b)(5). 

substantially prepared by the Exchange. 

On January 31, 2008, CBOE filed 

Amendment No. 1 to the proposed rule 

change. The Commission is publishing 

this notice and order to solicit 

comments on the proposal, as amended, 

from interested persons and to approve 

the proposed rule change, as modified 

by Amendment No. 1, on an accelerated 

basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

CBOE proposes to amend Rule 

24.9(a)(2), Terms of Index Option 

Contracts, to allow the Exchange 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 the 

Exchange to calculate a constant threemonth volatility index. 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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Commission recently approved a 

rule change that allows the Exchange to 

list up to seven expiration months for 

broad-based security index options 

upon which the Exchange calculates a 

constant three-month volatility index.3

This current proposal seeks to extend 

that provision to reduced-value and 

jumbo option contracts which overlie 

the same broad-based security index 

(e.g., Jumbo DJX Index Options (‘‘DXL’’), 

CBOE Mini-NDX Index (‘‘MNX’’), MiniRussell 2000 Index (‘‘RMN’’), and MiniSPX Index Options (‘‘XSP’’)) as fullvalue option contracts. 

In the prior proposal, the Exchange 

requested the ability to list up to seven 

expiration months in order to maintain 

four consecutive near term contract 

months and three quarterly cycle 

contract months. In order to maintain 

this structure, the Exchange noted that 

it would need to add a seventh contract 

month eight times a year. 

Since the Commission issued the 

Seven Month Approval Order, the 

Exchange has had one occasion to 

utilize the new provision for S&P 500 

Index (‘‘SPX’’) options.4 Specifically 

after December 2007 expiration, the 

remaining SPX option series were: 

January 2008, February 2008, March 

2008, June 2008, September 2008 and 

December 2008. In order to maintain 

four consecutive near term contract 

months, the Exchange added the April 

2008 SPX option series on December 24, 

2007. 

In response to the addition of the 

seventh SPX option contract month after 

December 2007 expiration, the 

Exchange received inquiries from 

market participants who expressed 

interest about whether a seventh 

contract month would be added for XSP 

options. Under CBOE’s current Rule 

24.9, this is not permitted. 

In order to provide consistent 

treatment across all like products and in 

response to customer demand, the 

Exchange is proposing to permit the 

addition of a seventh contract month for 

reduced-value and jumbo option 

contracts (e.g., XSP and DLX options) 

that overlie broad-based security 

indexes for which full-value options are 

used by the Exchange to calculate a 

constant three-month volatility index. 

To effect this change, the Exchange is 

proposing to add the phrase ‘‘including 

reduced-value and jumbo option 

contracts’’ to Rule 24.9(a)(2). 

In support of this proposal, the 

Exchange states it has always been the 

intention of the Exchange to list the 

same contract months for reduced-value 

options as for full-value options that 

overlie the same broad-based security 

index.5 Because the Exchange currently 

only calculates one three-month 

volatility index, the current proposal 

would only apply to XSP options. If in 

the future, however, the Exchange 

calculates other constant three-month 

volatility indexes, the current proposal 

would permit the listing of seven 

contract months for reduced-value and 

jumbo contract options that overlie 

broad-based security indexes for which 

full-value options are used by the 

Exchange to calculate a constant threemonth volatility index. 

Capacity 

CBOE has analyzed its capacity and 

represents that it believes the Exchange 

and the Options Price Reporting 

Authority have the necessary systems 

capacity to handle the additional traffic 

associated with the listing of a seventh 

contract month for reduced-value and 

jumbo options that overlie broad-based 

security indexes for which full-value 

options are used by the Exchange to 

calculate a constant three-month 

volatility index.6

2. Statutory Basis 

Because the increase in the number of 

expiration months is limited to options 

overlying broad based security indexes 

upon which the Exchange calculates a 

constant three-month volatility and 

because the series could be added 

without presenting capacity problems, 

the Exchange believes the rule proposal 

is consistent with 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.7 Specifically, the 

Exchange believes that the proposed 

rule change is consistent with the 

section 6(b)(5) Act 8 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. 

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 purposes 

of the Act. 


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Federal Register / Vol. 73, No. 27 / Friday, February 8, 2008 / Notices 7621 

9 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

10 15 U.S.C. 78f. 

11 15 U.S.C. 78s(b)(2). 

12See supra Note 3. 

13 15 U.S.C. 78s(b)(2). 

14 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. 57036 

(December 21, 2007), 72 FR 74381 (December 31, 

2007) (‘‘Notice’’) at footnote 3 (defining a ‘‘give-up’’

as a multi-character symbol that identifies a CHX 

participant firm. In the context of this rule, if a 

participant executes a trade using another 

participant’s give-up, the firm is identifying the 

other firm as a party to the trade and allocating the 

trade to the other firm’s account for clearing). 

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. 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–2008–05 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-CBOE–2008–05. 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 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–2008–05 and should 

be submitted on or before February 29, 

2008. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of the 

Proposed Rule Change 

After careful review, the Commission 

finds that CBOE’s proposal to amend 

Rule 24.9(a)(2), Terms of Index Option 

Contracts to allow the Exchange 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 the 

Exchange to calculate a constant threemonth volatility index is consistent 

with the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange 9 and, in particular, the 

requirements of section 6 of the Act 10

and the rules and regulations 

thereunder. The Commission believes 

that increasing, from six to seven, the 

number of expiration months for these 

options (to accomodate a fourth 

consecutive near-term month while 

maintaining the listing of three months 

on a quarterly expiration cycle) will 

result in a more consistent and 

predictable calculation in which the 

option series that bracket three months 

to expiration will always expire one 

month apart, thereby promoting just and 

equitable principles of trade while 

protecting investors and the public 

interest. 

The Commission also notes CBOE’s 

representations that it possesses the 

necessary systems capacity to handle 

the additional traffic associated with the 

additional listing of a seventh contract 

month for reduced-value and jumbo 

options that overlie broad-based 

security indexes for which full-value 

options are used by the Exchange to 

calculate a constant three-month 

volatility index. 

The Exchange has requested 

accelerated approval of the proposed 

rule change. The Commission finds 

good cause, consistent with Section 

19(b)(2) of the Act,11 for approving this 

proposed rule change before the 

thirtieth day after the publication of 

notice thereof in the Federal Register 

because accelerating approval will 

enable CBOE to harmonize the contract 

month listings between full-value SPX 

options and reduced-value SPX options 

(i.e., XSP options) by listing a seventh 

expiration month (May 2008) in order to 

maintain four consecutive near term 

contract months and three quarterly 

cycle contracts months. The 

Commission notes that this proposed 

rule change does not raise any new 

regulatory issues from those raised in 

the rule filing which allowed CBOE to 

list add a seventh expiration month for 

full-value broad-based security index 

options.12

V. Conclusion 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Act,13 that the 

proposed rule change (SR–CBOE–2008–

05), as modified by Amendment No. 1, 

be, and it hereby is approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E8–2330 Filed 2–7–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–57264; File No. SR–CHX–

2007–27] 

Self-Regulatory Organizations; 

Chicago Stock Exchange, Inc.; Order 

Approving a Proposed Rule Change To 

Eliminate a Requirement That a 

Participant Have a Formal Written 

Agreement To Use Another 

Participant’s Give-Up 

February 4, 2008. 

On December 12, 2007, the Chicago 

Stock Exchange, Inc (‘‘CHX’’ 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 CHX Article 9, Rule 25 to 

eliminate the requirement that a 

participant have a formal written 

agreement to use another participant’s 

give-up.3 The proposed rule change was 

published for comment in the Federal 


pwalker on PROD1PC71 with NOTICES