Document ID: SEC-2011-1786-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc
Posted Date: 2011-11-21T05:00Z

[Federal Register Volume 76, Number 224 (Monday, November 21, 2011)]
[Notices]
[Pages 72016-72018]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-29869]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65741; File No. SR-CBOE-2011-100]

Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Renew Existing Pilot Program for an Additional Fourteen 
Months

 November 14, 2011.
    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 November 4, 2011, Chicago Board Options Exchange, Incorporated 
(``CBOE'' or ``Exchange'') filed with the Securities

[[Page 72017]]

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 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 renew an existing pilot program for an additional 
fourteen months. Under the existing pilot program, the Exchange is 
permitted to list P.M.-settled options on broad-based indexes that 
expire on: (a) Any Friday of the month, other than the third Friday-of-
the-month (``End of Week Expirations''), and (b) the last trading day 
of the month (``End of Month Expirations''). 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'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 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
    On September 14, 2010, the Commission approved a CBOE proposal to 
establish a pilot program under which the Exchange is permitted to list 
P.M.-settled options on broad-based indexes to expire on (a) Any Friday 
of the month, other than the third Friday-of-the-month (``End of Week 
Expirations'' or ``EOWs''), and (b) the last trading day of the month 
(``End of Month Expirations'' or ``EOMs'').\5\ Under the terms of the 
End of Week/End of Month Expirations Pilot Program (``Program''), EOWs 
and EOMs are permitted on any broad-based index that is eligible for 
regular options trading. EOWs and EOMs are cash-settled and have 
European-style exercise. The proposal became effective on a pilot basis 
for a period of fourteen months that commenced on the next full month 
after approval was received to establish the Program and the Program is 
scheduled to expire on December 14, 2011. CBOE believes that the 
Program has been successful and well received by its Trading Permit 
Holders and the investing public during that the time that it has been 
in operation. The Exchange hereby proposes to extend the Program for an 
additional fourteen months, so that it will expire on February 14, 
2013. This proposal does not request any other changes to the Program.
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    \5\ See Securities Exchange Act Release No. 62911 (September 14, 
2010), 75 FR 57539 (September 21, 2010) (order approving SR-CBOE-
2009-075).
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    Pursuant to the order approving the establishment of the Program, 
two months prior to the conclusion of the pilot period, CBOE is 
required to submit an annual report to the Commission, which addresses 
the following areas: Analysis of Volume & Open Interest, Monthly 
Analysis of EOW & EOM Trading Patterns and Provisional Analysis of 
Index Price Volatility. The Exchange has submitted, under separate 
cover, the annual report in connection with the present proposed rule 
change. Confidential treatment under the Freedom of Information Act is 
requested regarding the annual report.
    If, in the future, the Exchange proposes an additional extension of 
the Program, or should the Exchange propose to make the Program 
permanent (which the Exchange currently intends to do), the Exchange 
will submit an annual report (addressing the same areas referenced 
above and consistent with the order approving the establishment of the 
Program) to the Commission at least two months prior to the expiration 
date of the Program. The annual report will be provided to the 
Commission on a confidential basis. Any positions established under the 
Program will not be impacted by the expiration of the Program.
    The Exchange believes there is sufficient investor interest and 
demand in the Program to warrant its extension. The Exchange believes 
that the Program has provided investors with additional means of 
managing their risk exposures and carrying out their investment 
objectives. Furthermore, the Exchange has not experienced any adverse 
market effects with respect to the Program.
    The Exchange believes that the proposed extension of the Program 
will not have an adverse impact on capacity.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \6\ of the Securities Exchange Act of 1934 (the 
``Act'') and the rules and regulations under the Act, in general, and 
furthers the objectives of Section 6(b)(5),\7\ in particular, in that 
it is designed 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. Specifically, the Exchange believes 
that the Pilot has been successful to date and states that it has not 
encountered any problems with the Pilot. Additionally, the Exchange 
believes that there is demand for the expirations offered under the 
Pilot and believes that that EOWs and EOMs will continue to provide the 
investing public and other market participants increased opportunities 
to better manage their risk exposure.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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 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

[[Page 72018]]

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 \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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    At any time within 60 days 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.

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 email to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2011-100 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-2011-100. This 
file number should be included on the subject line if email 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 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 publicly available. All 
submissions should refer to File Number SR-CBOE-2011-100 and should be 
submitted on or before December 12, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-29869 Filed 11-18-11; 8:45 am]
BILLING CODE 8011-01-P