Document ID: SEC-2010-1174-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2010-08-04T04:00Z

[Federal Register: August 4, 2010 (Volume 75, Number 149)]
[Notices]               
[Page 47041-47043]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04au10-99]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62596; File No. SR-CBOE-2010-070]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to the Penny Pilot Program

July 29, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on July 26, 2010, 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 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\ 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

    CBOE proposes to amend proposes to amend [sic] its rules relating 
to the Penny Pilot Program. 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
    CBOE proposes to identify the 75 option classes that will be added 
to the Penny Pilot Program on August 2, 2010, consistent with CBOE's 
rule filing to extend and expand the Program that was granted immediate 
effectiveness on October 22, 2010.\3\ As described in SR-CBOE-2009-76, 
the Pilot Program will be expanded by adding 300 option classes, in 
groups of 75 classes each quarter on the following dates: November 2, 
2009, February 1, 2010, May 3, 2010, and August 2, 2010.\4\ The option 
classes will be identified based on national average daily volume in 
the six calendar months preceding their addition to the Pilot Program 
using data compiled by The Options Clearing Corporation, except that 
the month immediately preceding their addition to the Pilot Program 
will not be utilized for purposes of the six-month analysis.
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    \3\ See Securities Exchange Act Release No. 60864 (October 22, 
2009), granting immediate effectiveness to SR-CBOE-2009-76.
    \4\ The classes to be added are among the most actively-traded, 
multiply-listed option classes that are not currently in the Pilot 
Program, excluding option classes with high premiums. An option 
class would be designated as ``high premium'' if, at the time of 
selection, the underlying security was priced at $200 per share or 
above, or the underlying index level was at 200 or above.
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    The following 75 option classes will be added to the Pilot Program 
beginning on August 2, 2010:

[[Page 47042]]

------------------------------------------------------------------------
    Symbol         Security name         Symbol         Security name
------------------------------------------------------------------------
MBI...........  MBIA Inc...........  CB............  Chubb Corp.
ATPG..........  ATP Oil & Gas Corp/  ADM...........  Archer-Daniels-
                 United States.                       Midland Co.
YUM...........  Yum! Brands Inc....  HSY...........  Hershey Co/The.
RCL...........  Royal Caribbean      TXT...........  Textron Inc.
                 Cruises Ltd.
BPOP..........  Popular Inc........  GGP...........  General Growth
                                                      Properties Inc.
EK............  Eastman Kodak Co...  NOV...........  National Oilwell
                                                      Varco Inc.
CNX...........  Consol Energy Inc..  TWX...........  Time Warner Inc.
MA............  Mastercard Inc.....  XOP...........  SPDR S&P Oil & Gas
                                                      Exploration &
                                                      Production ETF.
DCTH..........  Delcath Systems Inc  MYL...........  Mylan Inc/PA.
MTG...........  MGIC Investment      TSO...........  Tesoro Corp.
                 Corp.
PXP...........  Plains Exploration   CI............  CIGNA Corp.
                 & Production Co.
GPS...........  Gap Inc/The........  ESI...........  ITT Educational
                                                      Services Inc.
TSL...........  Trina Solar Ltd....  NKE...........  NIKE Inc.
EWW...........  iShares MSCI Mexico  FIS...........  Fidelity National
                 Investable Market                    Information
                 Index Fund.                          Services Inc.
CRM...........  Salesforce.com Inc.  SUN...........  Sunoco Inc.
SWN...........  Southwestern Energy  BBBY..........  Bed Bath & Beyond
                 Co.                                  Inc.
HBAN..........  Huntington           APWR..........  A-Power Energy
                 Bancshares Inc/OH.                   Generation Systems
                                                      Ltd.
EOG...........  EOG Resources Inc..  FWLT..........  Foster Wheeler AG.
APA...........  Apache Corp........  LNC...........  Lincoln National
                                                      Corp.
VVUS..........  Vivus Inc..........  RSH...........  RadioShack Corp.
JDSU..........  JDS Uniphase Corp..  TYC...........  Tyco International
                                                      Ltd.
ACI...........  Arch Coal Inc......  CL............  Colgate-Palmolive
                                                      Co.
NE............  Noble Corp.........  FXP...........  ProShares
                                                      UltraShort FTSE/
                                                      Xinhua China 25.
BAX...........  Baxter               NTAP..........  NetApp Inc.
                 International Inc.
ADSK..........  Autodesk Inc.......  SO............  Southern Co.
KRE...........  SPDR KBW Regional    PHM...........  Pulte Group Inc.
                 Banking ETF.
XL............  XL Group Plc.......  HOT...........  Starwood Hotels &
                                                      Resorts Worldwide
                                                      Inc.
WLT...........  Walter Energy Inc..  QLD...........  ProShares Ultra
                                                      QQQ.
IBN...........  ICICI Bank Ltd.....  VRSN..........  VeriSign Inc.
EWY...........  iShares MSCI South   PCL...........  Plum Creek Timber
                 Korea Index Fund.                    Co Inc.
WHR...........  Whirlpool Corp.....  NBR...........  Nabors Industries
                                                      Ltd.
BHI...........  Baker Hughes Inc...  ESRX..........  Express Scripts
                                                      Inc.
KMP...........  Kinder Morgan        ACAS..........  American Capital
                 Energy Partners LP.                  Ltd.
MRO...........  Marathon Oil Corp..  XLNX..........  Xilinx Inc.
AGO...........  Assured Guaranty     DO............  Diamond Offshore
                 Ltd.                                 Drilling Inc.
GIS...........  General Mills Inc..  CMA...........  Comerica Inc.
ANR...........  Alpha Natural        KEY...........  KeyCorp.
                 Resources Inc.
GENZ..........  Genzyme Corp.......
------------------------------------------------------------------------

    The minimum increments for all classes in the Penny Pilot (except 
for the QQQQs, IWM and SPY) are: $0.01 for all option series below $3 
(including LEAPS), and $0.05 for all option series $3 and above 
(including LEAPS). The minimum increment for all option series in QQQQ, 
IWM and SPY is $.01.
2. Statutory Basis
    The Exchange believes the rule proposal is consistent with the 
Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations under the Act applicable to a national securities exchange 
and, in particular, the requirements of Section 6(b) of the Act.\5\ 
Specifically, the Exchange believes that the proposed rule change is 
consistent with the Section 6(b)(5) Act \6\ requirements 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. In particular, the proposed 
rule change allows for an expansion of the Penny Pilot Program for the 
benefit of market participants and identifies the option classes to be 
added to the Pilot Program in a manner consistent with CBOE's rule 
filing SR-CBOE-2009-76 to extend and expand the Pilot Program.
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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

    The proposed rule change is filed for immediate effectiveness 
pursuant to Section 19(b)(3)(A) \7\ of the Securities Exchange Act of 
1934 and Rule 19b-4(f)(1) \8\ thereunder as it constitutes a stated 
policy, practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule. At any time within 
the 60-day period beginning on the date of the filing of the proposed 
rule change, the Commission summarily may temporarily suspend 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.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(1).
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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:

[[Page 47043]]

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-2010-070 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-2010-070. 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 Web site viewing and 
printing 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-2010-070 and should be 
submitted on or before August 25, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
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    \9\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2010-19222 Filed 8-3-10; 8:45 am]
BILLING CODE 8010-01-P