Document ID: SEC-2009-1705-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change Related to Stock-Option Orders
Posted Date: 2009-12-04T05:00Z

[Federal Register: December 4, 2009 (Volume 74, Number 232)]
[Notices]               
[Page 63807-63808]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04de09-115]                         

[[Page 63807]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61068; File No. SR-CBOE-2009-089]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing of a Proposed Rule Change Related to 
Stock-Option Orders

November 27, 2009.
    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 November 18, 2009, the Chicago Board Options Exchange, 
Incorporated (``Exchange'' or ``CBOE'') filed with the Securities and 
Exchange Commission (the ``Commission'') the proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
by the self-regulatory organization. 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 is proposing to amend its complex order RFR auction 
(``COA'') as it applies to stock-option orders. The text of the 
proposed rule change is available on the Exchange's Web site (http://
www.cboe.org/Legal), at the Office of the Secretary, CBOE 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
    Prior to routing to the complex order book (``COB'') or once on 
PAR, eligible complex orders may be subjected to an automated COA 
process where orders are exposed for price improvement. Currently, if a 
market order cannot be filled in whole or in a permissible ratio at the 
conclusion of COA, then the order (or any remaining balance) will route 
to PAR for manual handling.
    The Exchange is proposing to revise the operation of COA as it 
relates to market stock-option orders that contain one or more option 
leg(s). The Exchange is proposing to revise the COA process so that, 
instead of routing to PAR for manual handling, the Exchange may 
determine on a class-by-class basis that any remaining balance of the 
option leg(s) will automatically route to CBOE's Hybrid System for 
processing as a simple market order(s) consistent with CBOE's order 
execution rules and any remaining balance of the stock leg will 
automatically route to the CBOE Stock Exchange (``CBSX''), CBOE's stock 
facility, for processing as a simple market order consistent with CBSX 
order execution rules.\4\ This change will assist in the automatic 
execution and processing of stock-option orders that are market orders.
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    \4\ Pursuant to Rule 6.53C.01, any determination by the Exchange 
to route complex market orders in this manner will be announced to 
the membership via Regulatory Circular.
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the Act 
\5\ in general and furthers the objectives of Section 6(b)(5) of the 
Act \6\ in particular in that it should promote just and equitable 
principles of trade, serve to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and 
protect investors and the public interest. The proposed rule change 
will assist in the automatic execution and processing of stock-option 
orders that are market orders.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 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

    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 self-regulatory organization 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-2009-089 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-2009-089. 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 Section, 100 F Street, 
NE., Washington, DC 20549-1090. Copies of the filing will

[[Page 63808]]

also be available for inspection and copying at the Exchange's 
principal office. 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-2009-089 and should be submitted on or before December 28, 2009.

    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,
Deputy Secretary.
[FR Doc. E9-28891 Filed 12-3-09; 8:45 am]

BILLING CODE 8011-01-P