Federal Register / Vol. 75, No. 194 / Thursday, October 7, 2010 / Notices 62167 

44See Phlx 11(a) Letter, supra note 32. 

45 15 U.S.C. 78f(b)(5). In connection with the 

issuance of this approval order, neither the 

Commission nor its staff is granting any exemptive 

or no-action relief from the requirements of Rule 

10b–0 under the Act. 17 CFR 240.10b–10. 

Accordingly, a broker-dealer executing a customer 

order through the PIXL auction will need to comply 

with all applicable requirements of that Rule. 

46 15 U.S.C. 78s(b)(2). 

47 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 Nos. 

55871(June 6, 2007), 72 FR 32372 (June 12, 2007) 

(SR–CBOE–2006–84); 56275 (August 17, 2007), 72 

FR 47097 (August 22, 2007). 

4See Securities Exchange Act Release No. 56380 

(September 10, 2007), 72 FR 52948 (September 17, 

2007) (SR–CBOE–2007–105) (immediately effective 

filing pertaining to contract multiplier for Credit 

Default Options). 

5The Exchange may vary the particular contract 

multiplier on a class-by-class basis within a range 

of 1 to 1,000. See 29.1(a). 6See Rule 29.1(a)(i). 7The Exchange notes that with a fixed exercise 

settlement value of $100, any quote above $100 

(e.g., $150) would not make economic sense since 

it would represent a premium cost ($150 × 1,000 = 

$150,000) that exceeds than [sic] the exercise 

settlement amount of the contract ($100 × 1,000 = 

$100,000). 

through PIXL must comply with this 

condition of the Rule.44

IV. Conclusion 

For the foregoing reasons, the 

Commission finds that the proposed 

rule change, as amended, is consistent 

with the Act and the rules and 

regulations thereunder applicable to a 

national securities exchange, and, in 

particular, with Section 6(b)(5) of the 

Act.45

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,46 that the 

proposed rule change (SR–Phlx–2010– 

108) is approved, except that (1) 

paragraphs (n)(i)(A)(2), (n)(i)(B)(2), 

(n)(ii)(B)(4), and (n)(ii)(D) of Phlx Rule 

1080 are approved on a pilot basis until 

August 31, 2011; and (2) there shall be 

no minimum size requirement for orders 

entered into the PIXL for a pilot period 

expiring on August 31, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.47

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–25252 Filed 10–6–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63026; File No. SR–CBOE– 

2010–046] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing of a 

Proposed Rule Change To Amend 

Certain Rules Pertaining to Credit 

Options 

October 1, 2010. 

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 20, 2010, the Chicago Board 

Options Exchange, Incorporated 

(‘‘CBOE’’ or the ‘‘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 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 

CBOE proposes to amend certain rules 

pertaining to Credit Options. The text of 

the rule proposal is available on the 

Exchange’s Web site (http:// 

www.cboe.org/legal), at the Exchange’s 

principal office, 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 

The Exchange received approval to 

list and trade Credit Default Options 

and Credit Default Basket Options 

(collectively ‘‘Credit Options’’) in 2007, 

and is planning to re-launch these 

products.3 In connection with the 

Exchange’s planned re-launching of 

Credit Options, the Exchange will be 

introducing contracts that have a payout 

that is less than $100,000.4 In addition, 

the Exchange would like to: (1) Change 

the quoting convention for Credit 

Default Options, (2) change the 

minimum price variation for Credit 

Option, and (3) designate a single 

applicable Credit Event for Credit 

Options. 

Quoting Convention and Minimum 

Price Variation Changes 

When CBOE launched Credit Default 

Options, the Exchange designated the 

cash settlement amount to be $100,000, 

which was equal to an exercise 

settlement value of $100 multiplied by 

a contract multiplier of 1,000 (which 

was specified by the Exchange at 

listing).5 Because the exercise 

settlement value is currently fixed by 

rule at $100,6 bids and offers for 

contracts are expressed in amounts 

ranging from $0 (no bid) to $100. The 

range of bids and offers is not hard 

coded into CBOE’s rules and is a 

function of pricing options that have a 

fixed payout.7 To arrive at the total 

amount a bid or offer represents per 

contract, the bid or offer is multiplied 

by the contract multiplier. For example, 

if a Credit Default Option has a cash 

settlement amount of $100,000 ($100 × 

1,000), bids of $0.05, $45.15 and $67.50 

equate to premium amounts of $50, 

$45,150 and $67,500, respectively. 

CBOE proposes to change the quoting 

conventions for Credit Default Options 

by permitting the exercise settlement 

value to be an amount determined by 

the Exchange on a class-by-class basis 

and that would be equal to $1 or $100, 

or a value between those values. By 

permitting the Exchange to vary the 

exercise settlement value, the range of 

bids and offers would vary in tandem. 

For example, if the Exchange sets the 

exercise settlement value at $10, bids 

and offers for that contract would range 

from $0 (no bid) to $10, and the total 

premium amount would be determined 

by multiplying the bid or offer by the 

contract multiplier. 

In addition, by permitting the 

Exchange to set the exercise settlement 

value on a class-by-class basis, the 

Exchange would be able to list a 

contract having a cash settlement 

amount that could be arrived at in 

different ways. For example, for a Credit 

Default Option with a cash settlement 

amount of $1,000, the Exchange could: 

(1) Set the exercise settlement value at 

$1 with a contract multiplier of $1,000, 

(2) set the exercise settlement value at 

$10 with a contract multiplier of 100, (3) 

set the exercise settlement value at $100 

with a contract multiplier of 10, or (4) 

set the exercise settlement value at 

$1,000 with a contract multiplier of 1. 

The Exchange notes that it will not list 

more than one Credit Default Option 

contract with a cash settlement amount 


jdjones on DSK8KYBLC1PROD with NOTICES
62168 Federal Register / Vol. 75, No. 194 / Thursday, October 7, 2010 / Notices 

8See e-mail from Jennifer L. Klebes, Senior 

Attorney, CBOE, to Jennifer Dodd, Special Counsel, 

and Andrew Madar, Special Counsel, Commission, 

dated September 27, 2010. 

9See Rule 22.1(e). 

10See Rule 29.14(b). 

11See Rule 22.13(b). 

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

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

arrived at in difference [sic] ways.8 The 

Exchange notes that it has the discretion 

to set the exercise settlement value for 

binary options on a class-by-class and is 

seeking to introduce that same 

flexibility to Credit Default Options.9

The Exchange is also proposing to 

change the minimum price variation 

(‘‘MPV’’) for Credit Default Options. 

Currently, the MPV for bids and offers 

on both simple and complex orders for 

Credit Options is fixed at $0.05.10

Similar to binary options, the Exchange 

would like to build in the flexibility to 

establish the MPV on a class-by-class 

basis at an increment not less then 

$0.01.11 The ability to designate $0.01 as 

the MPV would permit more pricing 

points than is currently allowed and 

would allow for more granular pricing 

points when lower exercise settlement 

values are designated. The Exchange 

believes that the introduction of more 

pricing points creates tighter spreads 

between quotes, which in turn benefits 

investors. For example, if the Exchange 

designates the exercise settlement value 

as $1 bids and offers for that contract 

would range from $0 (no bid) to $1 and 

only 20 price points would be available 

since the MPV is $0.05 ($0.05, $0.10, 

etc.). If the MPV is $0.01 and the 

designated exercise settlement value is 

$1, there would be 100 price points 

available for quoting. The Exchange 

notes that it has the discretion to 

establish the MPV on a class-by-class 

basis for binary options and believes 

that permitting more price points for 

options having a lower exercise 

settlement value will benefit market 

participants. 

Designation of Single Credit Event 

Change 

Currently, CBOE Rules 29.2, 

Designation of Credit Default Options, 

and 29.2A, Designation of Credit Default 

Basket Option Contracts, provide that a 

failure-to-pay default will always be a 

designated Credit Event for Credit 

Options. In addition, the Exchange may 

designate other event(s) of default and/ 

or restructuring as Credit Events. The 

Exchange believes that there may be a 

market for Credit Options that specify a 

single Credit Event (e.g., bankruptcy as 

defined in accordance with the terms of 

the Relevant Obligation(s)) and is 

therefore proposing to provide the 

Exchange with the ability to designate a 

single Credit Event. To make this 

change, the Exchange is proposing 

revisions to Rules 29.2(a) and 

29.2A(a)(6) respectively. 

Technical Change 

The Exchange is also proposing to 

make a technical, non-substantive 

change to Rule 29.3. 

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 ability to designate 

$0.01 as the MPV for Credit Options. 

The Exchange does not believe that this 

change will lead to a proliferation of 

quotes and notes that the change will 

affect one series [sic] a product and not 

multiple series (i.e., various strikes) 

since Credit Options do not have strikes. 

2. Statutory Basis 

The Exchange believes this rule 

proposal is consistent with 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.12 Specifically, the Exchange 

believes that the proposed rule change 

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

Act 13 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, and thereby will 

provide investors with additional tools 

to hedge risk and tailor their investment 

needs. 

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 

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 

Within 45 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 or disapprove 

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 

Number SR–CBOE–2010–046 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CBOE–2010–046. 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 Web site viewing and 

printing 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 


jdjones on DSK8KYBLC1PROD with NOTICES
Federal Register / Vol. 75, No. 194 / Thursday, October 7, 2010 / Notices 62169 

14 17 CFR 200.30–3(a)(12). 

identifying information from 

submissions. You should submit only 

information that you wish to make 

publicly available. All submissions 

should refer to File Number SR–CBOE– 

2010–046 and should be submitted on 

or before October 28, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–25251 Filed 10–6–10; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Public Notice: 7195] 

Bureau of Educational and Cultural 

Affairs (ECA) Request for Grant 

Proposals: Study of the United States 

Institutes for Student Leaders on U.S. 

History and Government 

Announcement Type: New 

Cooperative Agreement. 

Funding Opportunity Number: ECA/ 

A/E/USS–11–10. 

Catalog of Federal Domestic 

Assistance Number: 19.009. 

Key Dates: July–August, 2011 and 

January, February, 2012. 

Application Deadline: December 3, 

2010. 

Executive Summary: The Branch for 

the Study of the United States, Office of 

Academic Exchange Programs, Bureau 

of Educational and Cultural Affairs 

(ECA), invites proposal submissions for 

the design and implementation of six (6) 

Study of the U.S. Institutes for Student 

Leaders on U.S. History and 

Government, pending the availability of 

funds. Participants will be drawn from 

countries throughout Central and South 

America and the Caribbean. Three 

institutes will be conducted entirely in 

Spanish, and the remaining three in 

English. Each academic institute will be 

five weeks in duration, including a oneweek integrated study tour. 

I. Funding Opportunity Description 

Authority 

Overall grant making authority for 

this program is contained in the Mutual 

Educational and Cultural Exchange Act 

of 1961, Public Law 87–256, as 

amended, also known as the FulbrightHays Act. The purpose of the Act is ‘‘to 

enable the Government of the United 

States to increase mutual understanding 

between the people of the United States 

and the people of other countries* * * 

to strengthen the ties which unite us 

with other nations by demonstrating the 

educational and cultural interests, 

developments, and achievements of the 

people of the United States and other 

nations * * * and thus to assist in the 

development of friendly, sympathetic 

and peaceful relations between the 

United States and the other countries of 

the world.’’ The funding authority for 

the program above is provided through 

legislation. 

Purpose: All ECA programs seek to 

increase mutual understanding between 

the people of the United States and the 

people of other countries. The Study of 

the U.S. Institutes for Student Leaders 

on U.S. History and Government 

provide a group of undergraduate 

students, who have little to no prior 

experience in the U.S., with an 

introduction to U.S. history, 

government, society, and culture. In 

addition to this core American Studies 

component, students will participate in 

seminars, workshops, and activities to 

strengthen their leadership skills. 

Participants will also engage in 

volunteer activities and learn about 

civic engagement as a core American 

value. Throughout the course of the 

institutes, participants will interact with 

American peers in the classroom, 

community, and through a weekend 

long home-stay experience. 

This award will support up to 120 

undergraduate participants. Three 

institutes for twenty participants each 

will take place in Summer 2011 while 

an additional three institutes will take 

place in Winter 2012. Please refer to the 

Project Objectives, Goals, and 

Implementation (POGI) document for 

programmatic details. 

Please note: This award will be in the form 

of a cooperative agreement. In a cooperative 

agreement, ECA is substantially involved in 

the management and oversight of the 

institute. Please refer to the statement of 

work in the POGI to see the division of 

responsibilities between the recipient 

institution and the Program Office. 

II. Award Information 

Type of Award: Cooperative 

Agreement. ECA’s level of involvement 

in this program is listed under number 

1 above. 

Fiscal Year Funds: FY 2011. 

Approximate Total Funding: 

$1,440,000. 

Approximate Number of Awards: 

One. 

Approximate Average Award: 

$1,440,000. 

Anticipated Award Date: Pending 

availability of funds, February 2011. 

Anticipated Project Completion Date: 

February, 2012. 

Additional Information: Pending 

successful implementation of this 

program and the availability of funds in 

subsequent fiscal years, it is ECA’s 

intent to renew this cooperative 

agreement for two additional fiscal 

years, before openly competing it again. 

III. Eligibility Information 

III.1. Eligible applicants: The Bureau 

is seeking detailed proposals from 

accredited post-secondary U.S. 

institutions (community colleges, liberal 

arts colleges, public and private 

universities), consortia of organizations, 

and/or from public and private nonprofit organizations meeting the 

eligibility requirements outlined below. 

The Bureau intends to issue one 

award and is seeking proposals from 

organizations with the ability to 

administer, support, and oversee the six 

academic institutes. Recipient 

organizations may be public or private 

organizations that provide sub-awards 

to up to six institutions of higher 

education to implement the institutes. 

Or, higher education institutions may 

apply to administer and implement the 

institutes working with branch 

campuses, other colleges in a 

consortium, or partnering with any 

other institution of higher education. 

Institutions of higher education may 

host no more than one institute at a time 

(for up to 20 students), but may host up 

to two institutes per year (e.g. a summer 

and a winter institute); this policy is to 

advance the Bureau’s goals of diversity 

and increased mutual understanding, 

and to provide more individualized 

attention to participants. 

The recipient organization will serve 

as the lead organization and will be 

responsible for the oversight of all six 

institutes and must appoint a project 

director who will be the main point of 

contact and liaison with ECA. 

III.2. Cost Sharing or Matching Funds: 

There is no minimum or maximum 

percentage required for this 

competition. However, the Bureau 

encourages applicants to provide 

maximum levels of cost sharing and 

funding in support of its programs. 

When cost sharing is offered, it is 

understood and agreed that the 

applicant must provide the amount of 

cost sharing as stipulated in its proposal 

and later included in an approved 

agreement. Cost sharing may be in the 

form of allowable direct or indirect 

costs. For accountability, you must 

maintain written records to support all 

costs which are claimed as your 

contribution, as well as costs to be paid 

by the Federal government. Such 

records are subject to audit. The basis 

for determining the value of cash and 


jdjones on DSK8KYBLC1PROD with NOTICES