Document ID: SEC-2008-1240-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2008-09-12T04:00Z

[Federal Register: September 12, 2008 (Volume 73, Number 178)]
[Notices]               
[Page 53062-53064]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12se08-110]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58462; File No. SR-CBOE-2008-91]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change by Chicago Board Options Exchange, Inc. Amending CBOE Rule 52.3

September 4, 2008.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on August 27, 2008, Chicago Board Options Exchange, Inc. 
(``CBOE'' or the ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 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 52.3 in order to clarify a 
circumstance under which the Exchange will commence a trading halt in 
Derivative Securities Products listed and trading on the Exchange.

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 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 parts of such statements.

[[Page 53063]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    In order to provide clarity to CBSX Traders,\4\ the Exchange 
proposes to amend its Rules by adding new CBOE Rule 52.3(d), in order 
to clarify that the Exchange will halt trading in Derivative Securities 
Products \5\ listed and trading on the CBOE Stock Exchange \6\ 
(``CBSX'') when the Exchange becomes aware that the Net Asset Value 
(``NAV'') of the Derivative Securities Products (and in the case of 
managed fund shares, the disclosed portfolio) is not being disseminated 
to all market participants at the same time.
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    \4\ See CBOE Rule 50.3 for the definition of ``CBSX Traders.''
    \5\ Pursuant to Rule 52.3(c)(5)(i), the term Derivative 
Securities Product includes a series of Equity-Linked Term Notes, 
Index-Linked Exchangeable Notes, IPRs, IPSs, or TIRs, which is based 
on an underlying security or index. Those products are described in 
CBOE Rules 31.5I, 31.5O, 31.5L, 31.5M, and 31.5N, respectively.
    \6\ The CBOE Stock Exchange is the stock trading facility of 
CBOE.
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    Specifically, with respect to Derivative Securities Products listed 
on CBSX for which an NAV (and in the case of managed fund shares, a 
disclosed portfolio) is disseminated, if the Exchange becomes aware 
that the NAV (or in the case of managed fund shares, the disclosed 
portfolio) is not being disseminated to all market participants at the 
same time, it will halt trading in the affected Derivative Securities 
Product on CBSX until such time as the NAV (or in the case of managed 
fund shares, the disclosed portfolio, as applicable) is available to 
all market participants. The Exchange believes that adding this 
clarification to its rules promotes the just and equitable principles 
of trade and promotes a fair and transparent marketplace.
    The Exchange notes that, in the event the NAV (or disclosed 
portfolio, as applicable) for one of the securities referred to above 
is no longer calculated or disseminated, the Exchange would halt 
trading in such security and would resume trading at such time as the 
NAV (or disclosed portfolio, as applicable) is available.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with and furthers the objectives of Section 6(b)(5) of the Act,\7\ in 
that it is designed to prevent fraudulent and manipulative acts and 
practices, 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.
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    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purpose 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

    The Exchange has designated the proposed rule change as one that: 
(i) Does not significantly affect the protection of investors or the 
public interest; (ii) does not impose any significant burden on 
competition; and (iii) by its terms, does not 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. Additionally, the Exchange provided the 
Commission with written notice of its intention to file the proposed 
rule change at least five business days before its filing. Therefore, 
the foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
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    The Exchange has requested that the Commission waive the 30-day 
operative delay, which would make the rule change operative upon 
filing. The Exchange believes that waiver of the 30-day operative delay 
is consistent with the protection of investors and the public interest 
as it will clarify a circumstance under which the Exchange will halt 
trading in Derivative Securities Products listed on the Exchange. This 
proposal is similar to rule changes by other national securities 
exchanges, and does not raise any new or unique issues.\10\ Therefore, 
the Commission designates the proposed rule change as operative 
immediately.\11\
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    \10\ See Securities Exchange Act Release No. 58111 (July 7, 
2008), 73 FR 40643 (July 15, 2008) (SR-Amex-2008-40; SR-NASDAQ-2008-
046; SR-NYSE-2008-39; SR-NYSEArca-2008-50).
    \11\ For purposes only of waiving the operative delay for 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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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-2008-91 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-2008-91. 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 also will 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-

[[Page 53064]]

2008-91 and should be submitted on or before October 3, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-21167 Filed 9-11-08; 8:45 am]

BILLING CODE 8010-01-P