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###### Securities and Exchange Commission

          - [Release No. 34-60038; File No. SR-CBOE-2009-032]

                    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 May 21, 2009, 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. On June 2, 2009, CBOE filed Amendment No. 1 to the proposed rule change. The Exchange has designated the proposed rule change as constituting a rule change under Rule 19b-4(f)(6) under the Act,[3]                                          which renders the proposal, as amended, effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons.                

## I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

                    The Exchange proposes to reduce the allowable timeframe for marketable order exposure pursuant to CBOE Stock Exchange (“CBSX”) Rule 52.6 (Processing of Round-Lot Orders) to 500 milliseconds. 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

The purpose of the proposed rule filing is to amend CBSX Rule 52.6. Pursuant to that Rule, when CBSX receives a marketable order when CBSX is not the NBBO and execution of the order would result in an impermissible trade-through, CBSX flashes the order to CBSX participants to ascertain if any participants are willing to execute the order at the NBBO price (i.e. provide price improvement) before CBSX attempts to access the NBBO on other markets on behalf of the marketable order. Rule 52.6 currently provides that the flash period shall not exceed 3 seconds, however these flashes have never exceeded one second. The filing proposes to reduce the maximum allowable flash time to 500 milliseconds (half a second). The filing also eliminates obsolete references to the Intermarket Trading System Plan (ITS Plan) and uses the term “flash” in the Rule instead of “display”. Lastly, the filing adds an interpretation and policy that makes clear that CBSX will provide an electronic method for CBSX traders to distinguish flashed orders from the CBSX disseminated best bid/offer during the flash period.

#### 2. Statutory Basis

                    CBOE believes the proposed rule change is consistent with the Act [4]                                          and the rules and regulations under the Act                           ( print page 27581)                        applicable to a national securities exchange and, in particular, the requirements of Section 6(b) of the Act.[5]                                          Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) [6]                                          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

                    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, it has become effective pursuant to Section 19(b)(3)(A) of the Act [7]                                          and Rule 19b-4(f)(6) thereunder.[8] 

                    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act [9]                                          normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6) [10]                                          permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. CBOE requests that the Commission waive the 30-day operative delay because the acceleration of the operative date is consistent with the protection of investors and the public interest. The Commission believes that waiving the 30-day operative delay [11]                                          is consistent with the protection of investors and the public interest and designates the proposal operative upon filing.                

                    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.[12] 

## 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 rule-comments@sec.gov . Please include File Number SR-CBOE-2009-032 on the subject line.                

### Paper Comments

    - Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

                    All submissions should refer to File Number SR-CBOE-2009-032. 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 publicly available. All submissions should refer to File Number SR-CBOE-2009-032 and should be submitted on or before July 1,                                         2009.                

                        For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13

Florence E. Harmon,

Deputy Secretary.

# Footnotes

1.                             15 U.S.C. 78s(b)(1).                    
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2.                             17 CFR 240.19b-4.                    
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3.                             17 CFR 240.19b-4(f)(6).                    
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4.                             15 U.S.C. 78a*et seq.*
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5.                             15 U.S.C. 78(f)(b).                    
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6.                             15 U.S.C. 78(f)(b)(5).                    
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7.                             15 U.S.C. 78s(b)(3)(A).                    
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8.                             17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires a self-regulatory organization to give 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 Commission has determined to waive the five-day pre-filing period in this case.                    
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9.                             17 CFR 240.19b-4(f)(6).                    
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10.                             17 CFR 240.19b-4(f)(6).                    
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11.                             For 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).                    
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12.                             For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of the Act, the Commission considers the period to commence on June 2, 2009, the date on which CBOE submitted Amendment No. 1.                         *See*15 U.S.C. 78s(b)(3)(C).                    
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13.                             17 CFR 200.30-3(a)(12).                    
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[FR Doc. E9-13569 Filed 6-9-09; 8:45 am]

BILLING CODE 8010-01-P