Document ID: SEC-2008-0093-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2008-01-18T05:00Z

[Federal Register: January 18, 2008 (Volume 73, Number 13)]
[Notices]               
[Page 3496-3497]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18ja08-91]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57141; File No. SR-CBOE-2007-147]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change and Amendment No. 1 Thereto Relating to Extension of the 
iShares Russell 2000 Index Fund (IWM) Option Pilot Program

January 14, 2008.
    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 December 11, 2007, the 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 
substantially by the Exchange. On January 8, 2008, CBOE filed Amendment 
No. 1 to the proposed rule change. The Exchange filed the proposal as a 
``non-controversial'' proposed rule change pursuant to Section 
19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which 
renders the proposal effective upon filing with the Commission.\5\ The 
Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, 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).
    \4\ 17 CFR 240.19b-4(f)(6).
    \5\ CBOE gave the Commission written notice of its intent to 
file the proposed rule change on November 28, 2007.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend an existing pilot program that 
increases the position and exercise limits for options on the iShares 
Russell 2000 Index Fund (``IWM options'') traded on the Exchange (``IWM 
Option Pilot Program''). The text of the proposed rule change is 
available at http://www.cboe.org/Legal, the Exchange's principal 

office, and 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 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 aspects 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 IWM Option Pilot Program provides for increased position and 
exercise limits for IWM options traded on the Exchange.\6\ 
Specifically, the IWM

[[Page 3497]]

Option Pilot Program increases the position and exercise limits for IWM 
option from 250,000 contracts to 500,000 contracts.\7\
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    \6\ The proposal that established the IWM Option Pilot Program 
was effective and operative upon filing. See Securities Exchange Act 
Release No. 55176 (January 25, 2007), 72 FR 4741 (February 1, 2007) 
(SR-CBOE-2007-08). The IWM Option Pilot Program was extended, and is 
due to expire on January 18, 2008. See Securities Exchange Act 
Release No. 55926 (June 20, 2007), 72 FR 35275 (June 27, 2007) (SR-
CBOE-2007-61).
    \7\ Exercise limits for IWM options are equivalent to the 
position limits prescribed for IWM options in Rule 4.11.07 and the 
increased exercise limits are only in effect during the IWM Option 
Pilot Period. See Rule 4.12.02.
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    The purpose of the instant proposed rule change is to extend the 
IWM Option Pilot Program through March 1, 2008. The Exchange is not 
proposing any other change to the IWM Option Pilot Program. The 
Exchange believes that extending the IWM Pilot Program is warranted due 
to the positive feedback received from market participants and for the 
reasons cited in the original proposed rule changes that proposed the 
adoption of the IWM Pilot Program. Also, the Exchange has not 
encountered any problems or difficulties relating to the IWM Option 
Pilot Program since its inception. For these reasons, the Exchange 
proposes to extend the IWM Option Pilot Program for the aforementioned 
additional period.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the requirements provided under Section 6(b)(5) of the Act,\8\ which 
requires 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.
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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 foregoing 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 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, provided that the 
self-regulatory organization has given the Commission written notice of 
its intent to file 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 proposed rule change has 
become effective pursuant to Section 19(b)(3)(A) 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).
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    CBOE has requested the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing.
    The Commission hereby grants CBOE's request \11\ and believes that 
waiving the 30-day operative delay is consistent with the protection of 
investors and the public interest. The Commission notes that the IWM 
Option Pilot Program was previously extended. In addition, waiver of 
the 30-day operative period would allow the IWM Option Pilot Program to 
continue uninterrupted.
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    \11\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposal's impact on efficiency, 
competition, and capital formation. 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.\12\
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    \12\ For purposes of calculating the 60-day period within which 
the Commission may summarily abrogate the proposed rule change under 
Section 19(b)(3)(C) of the Act, the Commission considers the period 
to commence on January 8, 2008, the date on which the Exchange filed 
Amendment No. 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:

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-2007-147 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2007-147. 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-2007-147 and should be submitted on 
or before February 8, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-861 Filed 1-17-08; 8:45 am]

BILLING CODE 8011-01-P