Document ID: SEC-2009-1302-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Permit CBOE To List Series That Are Restricted to Closing Transactions if Such Series Are Listed and Restricted To Closing Transactions on Another Exchange
Posted Date: 2009-09-11T04:00Z

[Federal Register: September 11, 2009 (Volume 74, Number 175)]
[Notices]               
[Page 46825-46826]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11se09-95]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60625; File No. SR-CBOE-2009-066]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Permit CBOE To List Series That Are Restricted to 
Closing Transactions if Such Series Are Listed and Restricted To 
Closing Transactions on Another Exchange

September 4, 2009.
    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 3, 2009, Chicago Board Options Exchange, Incorporated 
(``Exchange'' or ``CBOE'') 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 Exchange filed the proposal as a ``non-controversial'' proposed 
rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and 
Rule 19b-4(f)(6) thereunder.\4\ 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE proposes to amend Interpretation and Policy .12 to Rule 5.4 to 
permit the Exchange to list series that are restricted to closing 
transactions if such series are listed and restricted to closing 
transactions on another exchange. The text of the rule proposal 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.

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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this proposed rule change is to amend Interpretation 
and Policy .12 to Rule 5.4 to permit the Exchange to list series that 
are restricted to closing transactions if such series are listed and 
restricted to closing transactions on another exchange.
    The impetus for this filing is a customer request for the Exchange 
to list a series that was previously delisted by the Exchange so that 
the customer may close an existing position in the delisted series. 
Specifically, on August 27, 2009, CBOE delisted the January 2010 7 El 
Paso, Corp. (EPY) strike.\5\ Currently, that series is listed on one 
other exchange and is restricted to closing transactions only. On 
September 1, 2009, the Exchange received a customer request to re-list 
the January 2010 7 EPY strike because the customer wants to close out 
their position on CBOE, and not on the other exchange that currently 
lists the restricted January 2010 7 EPY strike. The Exchange wants to 
accommodate the customer and is therefore proposing to amend 
Interpretation and Policy .12 to Rule 5.4.
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    \5\ This series was inadvertently listed within $0.50 of an 
existing strike and was therefore delisted. See Rule 5.5.01(a)(2).
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    Specifically, the Exchange proposes to add new subparagraph (b) to 
Interpretation and Policy .12 to Rule 5.4. to provide that if an option 
series is listed but restricted to closing transactions on another 
national securities exchange, the Exchange may list such series (even 
if such series would not otherwise be eligible for listing under the 
Exchange's Rules), which shall also be restricted to closing 
transactions on the Exchange.\6\ Similar to series that no longer meet 
the Exchange's criteria for continued listing, (i) opening transactions 
by market makers executed to accommodate closing transactions of other 
market participants, and (ii) opening transactions by CBOE member 
organizations to facilitate the closing transactions of public 
customers executed as crosses pursuant to and in accordance with CBOE 
Rule 6.74(b) or (d) will be permitted in any restricted series listed 
pursuant to Rule 5.4.12(b).\7\ No restrictions will be in place with 
respect to the exercise of any restricted series.
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    \6\ The parenthetical text is being proposed to eliminate 
ambiguity about the Exchange's ability to list a restricted series 
pursuant to proposed Rule 5.4.12(b) in the event other Exchange 
Rules would otherwise prohibit the listing of that series.
    \7\ See Rule 5.4.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements provided under Section 6(b)(5) of the Act,\8\ 
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. Permitting 
the Exchange to accommodate a customer request will encourage 
competition and not harm investors or the public interest.
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    \8\ 15 U.S.C. 78f(b)(5).
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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 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

    Because the 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 prior to 
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, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A)

[[Page 46826]]

of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the self-regulatory organization to submit to the 
Commission written notice of its intent to file the proposed rule 
change, along with a brief description and text of 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 Exchange has satisfied this requirement.
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    The Exchange has requested the Commission to waive the 30-day 
operative delay so that the proposal may become operative immediately 
upon filing. The Commission believes that waiving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest because such waiver will allow the Exchange immediately to 
provide investors with an additional venue to close their existing open 
positions. The Commission notes further that the Exchange would be 
permitted to list the restricted series solely for the purpose of 
closing transactions as long as the restricted series is listed on 
another national securities exchange. For this reason, the Commission 
designates the proposal operative upon filing.\11\
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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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    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.

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-2009-066 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-2009-066. 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 available publicly. All 
submissions should refer to File Number SR-CBOE-2009-066 and should be 
submitted on or before October 2, 2009.

    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,
Deputy Secretary.
[FR Doc. E9-21909 Filed 9-10-09; 8:45 am]

BILLING CODE 8010-01-P