59692 Federal Register / Vol. 73, No. 197 / Thursday, October 9, 2008 / Notices 

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

15 17 CFR 240.19b–4(f)(6). 16 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). 

5FLEX Options provide investors with the ability 

to customize basic option features including size, 

expiration date, exercise style, and certain exercise 

prices. 

investors interested in FLEX Equity 

Options with additional opportunities 

to trade customized options in an 

exchange environment, and investors 

will benefit as a result. 

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, the proposed rule change 

has become effective pursuant to 

Section 19(b)(3)(A) of the Act 14 and 

Rule 19b-4(f)(6) thereunder.15 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–2008–102 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–2008–102. 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 will also be available 

for inspection and copying at the 

principal office of the self-regulatory 

organization. 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– 

2008–102 and should be submitted on 

or before October 30, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23926 Filed 10–8–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58719; File No. SR–CBOE– 

2008–103] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Permit Electronic 

Indicative FLEX Quotes 

October 2, 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 30, 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 its 

rules related to Flexible Exchange 

Options (‘‘FLEX Options’’) 5 in order to 

adopt provisions codifying certain 

electronic Indicative FLEX Quote 

functionality. 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, 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. 


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Federal Register / Vol. 73, No. 197 / Thursday, October 9, 2008 / Notices 59693 

6The reference to ‘‘FLEX Traders’’ includes any 

Exchange members that have been approved by the 

Exchange to use the FLEX Hybrid Trading System 

and any non-member Sponsored Users that have 

been provided electronic access, through 

Sponsoring Members, to the FLEX Hybrid Trading 

System in accordance with Rule 6.20A, Sponsored 

Users. 

7The Exchange may at any time designate an 

Exchange employee or independent contractor to 

act as a FLEX Official in one or more classes of 

FLEX Options. A FLEX Official performs the 

functions set out in Rule 24B.14. 

8See Securities Exchange Act Release Nos. 31920 

(February 24, 1993), 58 FR 12280 (March 3, 

1993)(SR–CBOE–92–17)(approval of rule change 

that, among other things, established the legacy 

FLEX system rule provisions pertaining to 

Indicative FLEX Quotes) and 56792 (November 15, 

2007), 72 FR 65776 (November 23, 2007)(SR– 

CBOE–2006–99)(approval of rule change that, 

among other things, deleted the legacy FLEX system 

rule provisions pertaining to Indicative FLEX 

Quotes because the then-existing functionality was 

no being longer utilized). 

9 15 U.S.C. 78s(b)(1). 

10 15 U.S.C. 78f(b)(5). 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). 

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 modify Rule 24B.14, FLEX 

Official, and to include a new definition 

of the term ‘‘Indicative FLEX Quote’’ in 

Rule 24B.1, Definitions, in order to 

make clear that non-binding electronic 

indications of the market for particular 

series of FLEX Options may be 

periodically supplied by FLEX Traders 6

and displayed on the FLEX Hybrid 

Trading System communications 

network, which is made available to all 

FLEX Traders that chose to receive the 

information. Under the proposed rule 

text, a FLEX Official 7 may call for such 

Indicative FLEX quotes at any time 

during the course of trading and with 

respect to any series of FLEX Options 

that the FLEX Official deems 

appropriate. In addition, FLEX Traders 

may call for Indicative FLEX Quotes, 

updates thereto, or cancellations 

thereof. 

This ability to call for and provide 

electronic Indicative FLEX Quotes is 

somewhat like the Indicative FLEX 

Quote functionality that CBOE 

previously utilized on its open outcrybased FLEX RFQ System (the ‘‘legacy 

FLEX system’’),8 except that under the 

proposed FLEX Hybrid Trading System 

application: FLEX Officials and all 

FLEX Traders have the ability to 

electronically request an Indicative 

FLEX Quote (previously under the 

legacy FLEX system, only FLEX 

Officials had the ability to make a verbal 

request on their own motion or at the 

request of a Market-Maker); FLEX 

Traders can now electronically 

communicate their Indicative FLEX 

Quotes (previously such quotes were 

only verbalized by Market-Makers in 

open outcry); and the information is 

disseminated over the FLEX Hybrid 

Trading System communications 

network interface (previously the 

information was disseminated at the 

trading post and over a different 

communications network). We believe 

the ability to request and provide 

Indicative FLEX Quotes over the 

interface serves as a useful tool for FLEX 

Traders to obtain information about 

indicative FLEX markets, and the abovedescribed distinctions represent an 

enhancement to the former process by 

providing a more efficient and effective 

means of communication. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6(b) of the 

Act 9 and the rules and regulations 

thereunder, in general, and Section 

6(b)(5),10 in particular, in that it is 

designed to promote just and equitable 

principles of trade, to prevent 

fraudulent and manipulative acts, to 

remove impediments to and to 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 proposed rule 

change allows FLEX Traders to more 

efficiently and effectively communicate 

information about indicative prices to 

the benefit of customers. 

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, the proposed rule change 

has become effective pursuant to 

Section 19(b)(3)(A) of the Act 11 and 

Rule 19b–4(f)(6) thereunder.12 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–2008–103 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–2008–103. 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 


sroberts on PROD1PC70 with NOTICES
59694 Federal Register / Vol. 73, No. 197 / Thursday, October 9, 2008 / Notices 

13 17 CFR 200.30–3(a)(12). 

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

2The Commission has modified parts of these 

statements. 

3Securities Exchange Act Release No. 48007 

(June 10, 2003), 68 FR 35744 (June 16, 2003) (File 

No. SR–DTC–2003–07). 

4Securities Exchange Act Release No. 50182 

(August 11, 2004), 69 FR 51341 (August 18, 2004) 

(File No. SR–DTC–2004–05). 

5Net debit caps help ensure that DTC can 

complete settlement, even if a Participant fails to 

settle. 

6Before completing a transaction in which a 

Participant is the receiver, DTC calculates the 

resulting effect the transaction would have on the 

Participant’s account and determines whether the 

resulting net balance would exceed the Participant’s 

net debit cap. Any transaction that would cause the 

Participant’s net settlement debit to exceed its net 

debit cap is placed in a pending (recycling) queue 

until another transaction creates credits in the 

Participant’s account. 

7For example, Participant A is delivering shares 

to Participant B and Participant B has a delivery 

obligation of shares with the same CUSIP to 

Participant C. 

8ATP is the core processing system for all 

transaction activity affecting security positions held 

at DTC. 

9 DTC tracks collateral in a Participant’s account 

through its Collateral Monitor (‘‘CM’’). At all times, 

the CM reflects the amount by which the collateral 

in the account exceeds the net debit in the account. 

When processing a transaction, DTC verifies that 

the deliverer’s and receiver’s CMs will not become 

negative when the transaction completes. If the 

transaction would cause either party to have a 

negative CM, the transaction will recycle until the 

deficient account has sufficient collateral for the 

transaction to complete. 

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 will also be available 

for inspection and copying at the 

principal office of the self-regulatory 

organization. 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– 

2008–103 and should be submitted on 

or before October 30, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23927 Filed 10–8–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58730; File No. SR–DTC– 

2008–09] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing of a Proposed Rule Change To 

Expand DTC’s Debit Cap Look-Ahead 

Processing 

October 3, 2008. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

September 12, 2007, The Depository 

Trust Company (‘‘DTC’’) 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 primarily by DTC. 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 proposed rule change would 

amend the Look-Ahead Process in 

DTC’s Settlement Services Guide to 

allow Money Market Issuance Deliveries 

pending for a Custodian’s or Dealer’s net 

debit cap to complete against Maturity 

Presentments pending for an Issuing/ 

Paying Agent’s net debit cap. DTC’s 

processing system would calculate the 

net effect of the dollar amount of 

offsetting transactions in the accounts of 

the two Participants involved. If the net 

of the transactions would result in 

positive risk management controls in 

those two accounts, the transactions 

would be completed. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

DTC 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. DTC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of such statements.2

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

On June 10, 2003, the Commission 

approved a proposed rule change to 

establish a transaction Look-Ahead 

Process which became available for 

municipal and corporate bonds, 

including Money Market Instruments 

(‘‘MMIs’’).3 On August 11, 2004, the 

Commission approved another proposed 

rule change which expanded the 

application and extended the benefit of 

the Look-Ahead Process to all equity 

transactions.4 With this proposed rule 

change, DTC is proposing to expand the 

Look-Ahead Process to MMIs. 

The purpose of DTC’s Look-Ahead 

Process is to reduce the number of 

recycling transactions in the system 

caused by the Net Debit Cap Risk 

Management Control.5 The existing 

Look-Ahead Process finds delivery 

transactions that are pending because 

the Receiving Participant has reached its 

net debit cap.6 It then looks to see 

whether the Receiving Participant has a 

pending delivery for the same security 

to another Participant.7 In such a 

situation, DTC’s Account Transaction 

Processor (‘‘ATP’’) 8 will calculate the 

net effect to the collateral 9 and net debit 

cap controls for all three Participants 

involved. If the net effect will not result 

in a deficit in the collateral or net debit 

cap controls for any of the three 

Participants, ATP processes the 

transactions simultaneously. Without 

the Look-Ahead Process, the transaction 

would pend in DTC’s system until 

another transaction created sufficient 

credit in the Receiving Participant’s 

account. Most credits are generated 

when a Participant delivers securities 

versus payment, pledges securities for 

value, receives principal, dividend or 

other interest allocations, or wires funds 

(a Settlement Progress Payment (‘‘SPP’’)) 

to DTC’s account at the Federal Reserve 

Bank of New York in order to reduce its 

DTC net debit. 

In order to further reduce the number 

of recycling transactions in the system 

and to improve the timeliness and 

certainty of transactions completing, 

DTC is proposing to expand the LookAhead Process beyond same securities 

for MMIs to allow pairs of money 

market instrument transactions between 

two Participants (i.e., an Issuing Paying 

Agent [’’IPA’’] and a custodian or 

dealer) that are pending for both party’s 

net debit caps to complete. This 

situation occurs when an IPA has a 

delivery of a new money market 

instrument to a custodian or a dealer for 

X dollars and that same custodian or 

dealer has a maturity of a money market 

instrument of equal or greater value 

awaiting acceptance by the same IPA. 

The proposed rule change would allow 

ATP to process those transactions 

simultaneously, as long as neither 

Participant’s risk management controls 

were overridden. 


sroberts on PROD1PC70 with NOTICES