[Federal Register Volume 74, Number 120 (Wednesday, June 24, 2009)]
[Notices]
[Pages 30189-30190]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-14799]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60129; File No. SR-CBOE-2009-030]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Order Approving Proposed Rule Change Regarding 
Appointments of CBSX DPMs

June 17, 2009.
    On May 7, 2009, the Chicago Board Options Exchange, Incorporated 
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change regarding appointments of 
Designated Primary Market-Makers (``DPMs'') on the CBOE Stock Exchange 
(``CBSX''). The proposed rule change was published for comment in the 
Federal Register on May 15, 2009.\3\ The Commission received no 
comments regarding the proposal. This order approves the proposed rule 
change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 59896 (May 11, 
2009), 74 FR 22991 (``Notice'').
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    CBOE proposed to amend its rules regarding appointments of CBSX 
DPMs. Currently, every security traded on CBSX must be assigned to a 
DPM.\4\ The Exchange's proposal will modify its rules to provide the 
Exchange with the flexibility to commence trading in a security on the 
CBSX without an assigned DPM. The Exchange represented that some 
securities are not traded on CBSX because DPMs have opted to not seek 
assignments in such securities. The Exchange's proposal will allow CBSX 
users the ability to trade these securities on CBSX without them being 
quoted by a DPM. The Exchange has also represented that this proposed 
modification to CBSX Rule 53.54 is not intended to in any way affect 
existing DPM appointments. The Exchange will notify its market 
participants of those securities that will trade without a DPM via a 
circular.
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    \4\ See CBSX Rule 53.54. A CBSX DPM is a market-maker that must, 
among other things, provide opening and continuous quotes in its 
assigned securities. See CBSX Rule 53.56.
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    CBOE's proposal will also modify CBSX Rule 53.56 to change the time 
DPMs are required to begin providing quotes from 8:15 a.m. to 8:30 a.m. 
(Chicago time). Lastly, CBOE's proposal will eliminate CBSX Rule 53.54 
which governed the allocation process used by CBSX prior to its initial 
launch.
    The Commission finds that the proposal is consistent with Section 
6(b)(5) of the Act,\5\ which requires that the rules of a national 
securities exchange be designed, among other things, to promote just 
and equitable principles of trade, to remove impediments to and perfect 
the mechanism of a free and open market and a national market system 
and, in general, to protect investors and the public interest.\6\ The 
Act does not mandate a particular market structure or, specifically, 
that an exchange have

[[Page 30190]]

specialists or the equivalent (which are known as DPMs on CBSX). 
Therefore, the Commission believes that it is reasonable and consistent 
with the Act to make additional securities available for trading on 
CBSX without the participation of a DPM. In taking this action, the 
Commission has relied on CBOE's representation that this proposal is 
not intended to affect existing DPM appointments. The Commission 
further believes that it is within the discretion of the Exchange to 
require DPMs to begin quoting in their required securities at 8:30 a.m. 
rather than, as under the Exchange's current rule, at 8:15 a.m. 
(Chicago time).
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    \5\ 15 U.S.C. 78f(b)(5).
    \6\ In approving this proposal, 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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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-CBOE-2009-030) is approved.
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    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-14799 Filed 6-23-09; 8:45 am]
BILLING CODE 8010-01-P