59690 Federal Register / Vol. 73, No. 197 / Thursday, October 9, 2008 / Notices 

8As discussed in proposed rule change SR–Amex 

2008–62, during the transition period physical and 

electronic access to NYSE Alternext US’s trading 

facilities will only be made available to individuals 

that obtain an 86 Trinity Permit, thus the access a 

LTP holder had prior to the Transaction will be 

cancelleld and for continued access such former 

LTP holder may obtain an 86 Trinity Permit. 

9 15 U.S.C. 78f(b)(4). 

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

11 17 CFR 240.19b–4(f)(2). 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

increase will go into effect on the 

Operative Date. In addition the Price 

List will be revised to include the 

monthly rate charged for services that 

are billed on a monthly rather than 

annual basis. Reference to the 

Membership Certificate fee of $20.00 

will be eliminated since the Exchange 

will no longer issue such certificates. 

3. The Price List section on Booth 

Rental and Order Pads is revised and 

updated to eliminate the references to (i) 

Order Pads since there is no fee 

indicated for order pads in that section; 

and (ii) the Booth Rental fees no longer 

in effect. 

4. The Price List section on Members 

Fees is revised to (i) change the name of 

the section to 86 Trinity Permit Holder 

Fees; (ii) eliminate Membership Dues; 

(iii) eliminate Initiation Fees, except for 

the Application Processing Fee and the 

$45 fee for use of the Exchange’s inhouse fingerprinting service; (iv) change 

the name of the subsection Membership 

Fees to 86 Trinity Permit Holder Fees 

and waive the Limited Trading Permits 

(‘‘LTP’’) fee for those LTP holders who 

become 86 Trinity Permit Holders after 

the Transaction closes8 The LTP Fee is 

billed at the beginning of each quarter, 

therefore, if the Transaction closes in 

the middle of a quarter, waiver of the fee 

will be effective at the beginning of the 

next quarter and will not be applied 

retroactively; (v) eliminate the 

Qualifying Maintenance fee charged to 

Interim Members; and (vi) eliminate 

obsolete notes. 

5. The Price List section on 

Registration and IDC Fees is being 

revised to replace NASD with FINRA. 

References throughout the Price List 

to Amex or ASE will be revised to NYSE 

Alternext U.S. or Exchange where 

appropriate. 

(2) Statutory Basis 

The Exchange believes that the 

proposed fee change is consistent with 

Section 6(b)(4) of the 1934 Act 9

regarding the equitable allocation of 

reasonable dues, fees and other charges 

among exchange members and other 

persons using exchange facilities. In 

particular the Exchange is revising its 

Price List to be in effect during the 

transition period after the closing of its 

Transaction with NYSE Euronext. Most 

of the fees currently in place on the 

Amex will remain in effect after the 

closing of the Transaction and 

throughout the transition period, 

however, certain member fees are being 

waived for the transition period to help 

off-set costs it is anticipated members 

will incur when transitioning their 

operations to NYSE Alternext’s new 

trading facilities. 

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 1934 

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 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective immediately pursuant to 

Section 19(b)(3)(A)(ii) of the Act 10 and 

Rule 19b–4(f)(2) 11 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 of 

appropriate in the public interest, for 

the protection of investors, or otherwise 

in the furtherance of the purposes of the 

Securities Exchange Act of 1934. 

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–2008–73 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–2008–73. 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, 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– 

2008–73 and should be submitted on or 

before October 30, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority. 12

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23925 Filed 10–8–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58718; File No. SR–CBOE– 

2008–102] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Change the 

Permissible Exercise Price and 

Premium Calculations for FLEX Equity 

Options 

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 


sroberts on PROD1PC70 with NOTICES
Federal Register / Vol. 73, No. 197 / Thursday, October 9, 2008 / Notices 59691 

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

4 17 CFR 240.19b–4(f)(6). 

5FLEX Equity Options provide investors with the 

ability to customize basic option features including 

size, expiration date, exercise style, and certain 

exercise prices. 

6See Rules 24A.4(c)(2), 24A.5(f), 24B.4(c)(2) and 

24B.5(e). 

7FLEX Index Options are options on specified 

underlying indexes and, like FLEX Equity Options, 

provide investors with the ability to customize 

basic option features including size, expiration 

date, exercise style, and certain exercise prices. 

8See Rules 24A.4(b)(2)(i)(c) and 24B.4(b)(2)(i)(c). 

9See Rules 24A.4(b)(2)(i)(b) and 24B.4(b)(2)(i)(b). 

10See Rules 24A.5(f) and 24B.5(e). 

11 15 U.S.C. 78s(b)(1). 

12 15 U.S.C. 78f(b). 

13 15 U.S.C. 78f(b)(5). 

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 

Rules 24A.4 and 24B.4 to change the 

permissible exercise price and premium 

calculations for FLEX Equity Options.5

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. 

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 

Currently, our rules provide that 

FLEX Equity Options exercise prices 

and premiums may be stated in dollar 

amount or percentage of the price of the 

underlying security, rounded to the 

nearest minimum tick (which may be as 

small as $0.01) or, in the case of exercise 

prices, to the nearest one-eighth of a 

dollar or $0.10.6 The purpose of this 

rule change is to revise the permissible 

exercise price and premium calculations 

for FLEX Equity Options to be more 

aligned with the permissible 

calculations for FLEX Index Options.7

Under the proposed rule: 

• Exercise prices and premiums for 

FLEX Equity Options may be stated in 

a dollar amount, which is the same as 

the current rule allows. 

• Exercise prices and premiums may 

also be stated in a percentage of the 

price of the underlying security at the 

time of the trade, which is the same as 

the current rule allows, or as of the open 

or close of trading on the Exchange on 

the trade date. Providing the flexibility 

to use a percentage based on the open 

or close of the underlying security is 

consistent with our FLEX Index Option 

rules, which permit exercise prices to be 

specified in terms of a percentage of the 

index value calculated as of the open or 

close of trading on the Exchange on the 

trade date.8

• Exercise prices and premiums may 

also be stated in a method for fixing 

such a number at the time a FLEX 

Request for Quote or FLEX Order is 

traded. For example, the exercise price 

and premium for a FLEX Equity Option 

might be based on the volume-weighted 

average price (‘‘VWAP’’) of the 

underlying for the trade day. Providing 

the flexibility to determine a particular 

method for fixing the exercise prices or 

premiums at the time of a trade is 

consistent with our FLEX Index Option 

rules, which permit exercise prices to be 

specified in terms of a method for fixing 

such a number at the time of a trade.9

We are also proposing to update the 

rounding formula for FLEX Equity 

Option exercises. As indicated above, 

the existing rules provide that the 

exercise price will be rounded to the 

nearest minimum increment, one-eighth 

of a dollar or $0.10. We are proposing 

to change the $0.10 parameter to instead 

be a decimal increment determined by 

the Exchange on a class-by-class basis, 

provided the increment cannot be 

smaller than $0.01. This change will 

provide the Exchange with more 

flexibility to determine to make a 

smaller increment available. We note 

that the minimum increment for each 

FLEX Equity Option is determined by 

the Exchange on a class-by-class basis 

and can be as small as $0.01.10 As a 

result, having an exercise price in a 

$0.01 increment is already permissible 

under our rules in those FLEX Equity 

Option classes where the minimum 

increment is $0.01. 

The Exchange believes that expanding 

the permissible exercise price and 

premium calculations is important and 

necessary to the Exchange’s efforts to 

create a product and market that 

provides members and investors 

interested in FLEX-type options with an 

improved but comparable alternative to 

the over-the-counter (‘‘OTC’’) market in 

customized options, which can take on 

contract characteristics similar to FLEX 

Equity Options but are not subject to the 

same restrictions. By expanding the 

permissible calculations for FLEX 

Equity Options, market participants will 

now have greater flexibility in 

determining whether to execute their 

customized options in an exchange 

environment or in the OTC market. 

CBOE believes market participants 

benefit from being able to trade these 

customized options in an exchange 

environment in several ways, including, 

but not limited to the following: (1) 

Enhanced efficiency in initiating and 

closing out positions; (2) increased 

market transparency; and (3) heightened 

contra-party creditworthiness due to the 

role of The Options Clearing 

Corporation as issuer and guarantor of 

FLEX Equity Options. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 11 and the rules and regulations 

under the Act applicable to national 

securities exchanges and, in particular, 

the requirements of Section 6(b) of the 

Act.12 Specifically, the Exchange 

believes the proposed rule change is 

consistent with the Section 6(b)(5) 13

requirements that the rules of an 

exchange be 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 will provide more 

flexibility to calculate exercise prices 

and premiums for FLEX Equity Options 

in a manner that is consistent with the 

calculations for FLEX Index Options, 

which should provide members and 


sroberts on PROD1PC70 with NOTICES
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. 


sroberts on PROD1PC70 with NOTICES