58998 Federal Register / Vol. 73, No. 196 / Wednesday, October 8, 2008 / Notices 

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

2 17 CFR 240.19b–4. 

3Currently, under Interpretation and 

Policy.01(a)(xxv) to Rule 24.9, the Exchange has 

authority to list Mini-NDX options at $2.50 strike 

price intervals. 4See Securities Exchange Act Release No. 34– 

39011 (September 3, 1997), 62 FR 47840 (September 

11, 1997) (SR–CBOE–1997–26). 5See Securities Exchange Act Release No. 34– 

58207 (July 29, 2008), 73 FR 43963 (July 22, 2008) 

(SR–CBOE–2008–26). 6See Securities Exchange Act Release Nos. 52625 

(October 18, 2005), 70 FR 61479 (October 24, 2005) 

(SR–CBOE–2005–81) and 57049 (December 27, 

2007), 73 FR 528 (January 3, 2008) (SR–CBOE– 

2007–125). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58659; File No. SR–CBOE– 

2008–96] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing of 

Proposal To Permit $1 Strikes for MNX 

Options 

September 26, 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 

September 16, 2008, the Chicago Board 

Options Exchange, Incorporated 

(‘‘Exchange’’ or ‘‘CBOE’’) filed with the 

Securities and Exchange Commission 

(‘‘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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange hereby proposes to 

amend certain of its rules to allow the 

Exchange to list options on the MiniNasdaq-100 Index (‘‘MNX), which is 

based on 1/10th the value of the 

Nasdaq-100 Index, at $1 strike price 

intervals. The text of the rule proposal 

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 

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 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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend Rule 24.9, Terms of 

Index Option Contracts, by adding a 

new interpretation that would allow the 

Exchange to list options on the MiniNasdaq-100 Index (‘‘MNX’’ or ‘‘MiniNDX’’), which is based on 1/10th the 

value of the Nasdaq-100 Index, at $1 or 

greater strike price intervals.3

Specifically, the Exchange proposes 

that the minimum strike price interval 

Mini-NDX options will be 0.01 point 

($1.00). The Exchange believes that $1 

strike price intervals in Mini-NDX 

option series will provide investors with 

greater flexibility by allowing them to 

establish positions that are better 

tailored to meet their investment 

objectives. This is consistent with 

existing Exchange rules and practices 

that allow the Exchange to list series at 

$1 or greater strike price intervals in 

similar options products. For example, 

Rule 24.9.01(b) allows the Exchange to 

list series on options based on one-one 

hundredth (1/100th) of the value of the 

Dow Jones Industrial Average Index at 

no less than $0.50 intervals.4 Similarly, 

Rule 24.9.01(f) allows the Exchange to 

list strike price intervals at no less than 

$1 for options on the CBOE S&P 500 

BuyWrite Index (1/10th value).5 In 

addition, Rule 24.9.11 allows the 

Exchange to list strike price intervals at 

no less than $1 for the reduced-value 

version of the Standard & Poor’s S&P 

500 Stock Index option (‘‘Mini-SPX 

option’’), which is based on 1/10th the 

value of the S&P 500 Index.6

For initial series, the Exchange would 

list at least two strike prices above and 

two strike prices below the current 

value of the MNX at or about the time 

a series is opened for trading on the 

Exchange. As part of this initial listing, 

the Exchange would list strike prices 

that are within 5 points from the closing 

value of the MNX on the preceding day. 

As for additional series, the Exchange 

would be permitted to add additional 

series when the Exchange deems it 

necessary to maintain an orderly 

market, to meet customer demand or 

when the underlying MNX moves 

substantially from the initial exercise 

price or prices. To the extent that any 

additional strike prices are listed by the 

Exchange, such additional strike prices 

shall be within thirty percent (30%) 

above or below the closing value of the 

MNX. The Exchange would also be 

permitted to open additional strike 

prices that are more than 30% above or 

below the current MNX value provided 

that demonstrated customer interest 

exists for such series, as expressed by 

institutional, corporate or individual 

customers or their brokers. MarketMakers trading for their own account 

would not be considered when 

determining customer interest. In 

addition to the initial listed series, the 

Exchange may list up to sixty (60) 

additional series per expiration month 

for each series in Mini-NDX options. In 

addition, the Exchange proposes that it 

shall not list LEAPS on Mini-NDX 

options at intervals less than $5. 

The Exchange is also proposing to set 

forth a delisting policy with respect to 

Mini-NDX options. Specifically, the 

Exchange would, on a monthly basis, 

review series that are outside a range of 

five (5) strikes above and five (5) strikes 

below the current value of the MNX and 

delist series with no open interest in 

both the put and the call series having 

a: (i) Strike higher than the highest 

strike price with open interest in the put 

and/or call series for a given expiration 

month; and (ii) strike lower than the 

lowest strike price with open interest in 

the put and/or call series for a given 

expiration month. 

Notwithstanding the proposed 

delisting policy, customer requests to 

add strikes and/or maintain strikes in 

Mini-NDX options in series eligible for 

delisting shall be granted. 

Further, in connection with the 

proposed delisting policy, if the 

Exchange identifies series for delisting, 

the Exchange shall notify other options 

exchanges with similar delisting 

policies regarding eligible series for 

listing, and shall work with such other 

exchanges to develop a uniform list of 

series to be delisted, so as to ensure 

uniform series delisting of multiply 

listed Mini-NDX options. 

It is expected that the proposed 

delisting policy for Mini-NDX options 

will be adopted by other options 

exchanges that list and trade Mini-NDX 

options. 

The Exchange also proposes to add 

new Interpretation and Policy .13 to 

Rule 5.5, Series of Option Contracts 

Open for Trading, which would be an 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 73, No. 196 / Wednesday, October 8, 2008 / Notices 58999 

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

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 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

internal cross reference stating that the 

intervals between strike prices for MiniNDX option series would be determined 

in accordance with proposed new 

Interpretation and Policy .01(h) to Rule 

24.9. 

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 and trading 

of $1 strikes or greater for Mini-NDX 

options. 

2. Statutory Basis 

The Exchange believes this rule 

proposal 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.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 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 

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 self-regulatory 

organization 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 

No. SR–CBOE–2008–96 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–2008–96. 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 

Number SR–CBOE–2008–96 and should 

be submitted on or before October 29, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23757 Filed 10–7–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58700; File No. SR–CBOE– 

2008–100] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change to Amend its Fees 

Schedule 

October 1, 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 22, 2008, 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 has designated this proposal 

as one establishing or changing a due, 

fee, or other charge imposed by CBOE 

under Section 19(b)(3)(A)(ii) of the Act 3

and Rule 19b–4(f)(2) 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 its 

Fees Schedule to establish fees for 

transactions in CBOE S&P 500 BuyWrite 

Index (1/10th value) (‘‘BXO’’) options 

and CBOE S&P 500 Three-Month 

Realized Volatility (‘‘RUH’’) options. 

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 


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