Document ID: SEC-2008-0775-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2008-06-05T04:00Z

[Federal Register: June 5, 2008 (Volume 73, Number 109)]
[Notices]               
[Page 32065-32066]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05jn08-96]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57883; File No. SR-CBOE-2008-53]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing of Proposed Rule Change To Amend the 
Exchange's Rules Pertaining to the Imposition of Fines for Minor Rule 
Violations

May 29, 2008.
    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 19, 2008, the Chicago Board Options Exchange, Incorporated 
(``CBOE'' or ``Exchange'') 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 substantially 
prepared by the CBOE. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend CBOE Rule 17.50, ``Imposition of 
Fines for Minor Rule Violations,'' to revise the provisions of CBOE 
Rule 17.50(g)(1) ``Violations of Position Limits Rules.'' The text of 
the proposed rule change is available on the Exchange's Web site 
(http://www.cboe.org/Legal), at the CBOE'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 Exchange 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. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant aspects 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 proposes to increase and strengthen the sanctions 
imposed pursuant to its Minor Rule Violation Plan (``MRVP'') in 
connection with any member or customer who exceeds the Exchange's 
position limit in accordance with CBOE Rule 4.11. The Exchange believes 
that increasing the fine levels specified; consolidating individual 
members, member organizations, and customers into one category; and 
lengthening the surveillance period from a 12-month period to a rolling 
24-month period will serve as an effective deterrent to such violative 
conduct.
    In addition, the Exchange, as a member of the Intermarket 
Surveillance Group (``ISG''), as well as certain other self-regulatory 
organizations (``SROs'') on October 29, 2007 executed and filed with 
the Commission a final version of an Agreement pursuant to Section 
17(d) of the Act (the ``17d-2 Agreement'').\3\ The members of the ISG 
intend to enter into an amendment to the 17d-2 Agreement in the near 
future concerning the surveillance and sanctions of position limit 
violations. As such, the SROs have agreed that their respective rules 
concerning position limits regarding options contracts are common 
rules. As a result, the proposal to amend the CBOE's MRVP will further 
result in consistency in sanctions among the SROs that are signatories 
to the 17d-2 Agreement and the forthcoming amendment concerning 
position limit violations.
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    \3\ See letter to Richard Holley, Senior Special Counsel, 
Division of Trading and Markets, Commission, from Nyieri Nazarian, 
Assistant General Counsel, American Stock Exchange LLC, dated 
October 29, 2007.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\4\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\5\ in particular, in that it 
is designed to promote just and equitable principles of trade, 
facilitate transactions in securities, 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. 
Specifically, the Exchange believes that the proposed rule change will 
strengthen its ability to carry out its oversight responsibilities as

[[Page 32066]]

an SRO and reinforce its surveillance and enforcement functions. 
Additionally, the Exchange believes that the proposed rule change will 
promote consistency in minor rule violations and respective SRO 
reporting obligations as set forth pursuant to Rule 19d-1(c)(2) under 
the Act,\6\ which governs minor rule violation plans.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ 17 CFR 240.19d-1(c)(2).
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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 that is 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 on the proposed rule 
change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 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 Exchange consents, the Commission will:
    (A) By order approve 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 rule-comments@sec.gov. Please include 
File Number SR-CBOE-2008-53 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-2008-53. 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 CBOE. 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-2008-53 and should be 
submitted on or before June 26, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-12482 Filed 6-4-08; 8:45 am]

BILLING CODE 8010-01-P