Document ID: SEC-2008-1096-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2008-08-07T04:00Z

[Federal Register: August 7, 2008 (Volume 73, Number 153)]
[Notices]               
[Page 46105-46106]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07au08-112]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58262; File No. SR-CBOE-2008-74]

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

July 30, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or Exchange Act) \1\ and Rule 19b-4 thereunder,\2\ notice is 
hereby given that on July 24, 2008, Chicago Board Options Exchange, 
Incorporated (``CBOE'' or the ``Exchange'') filed with the Securities 
and Exchange Commission (``Commission'') the proposed rule change as 
described in Items I, II and III below, which Items have been 
substantially prepared by CBOE. CBOE has designated the proposed rule 
change as ``constituting a stated policy, practice, or interpretation 
with respect to the meaning, administration, or enforcement of an 
existing rule'' under Section 19(b)(3)(A)(i) of the Act \3\ and Rule 
19b-4(f)(1) thereunder,\4\ which renders the proposal effective upon 
receipt of this filing by the Commission. 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)(i).
    \4\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE proposes to amend Rules 12.4--Portfolio Margin, and 15.8A--
Risk Analysis of Portfolio Margin Accounts. The text of the proposed 
rule change 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, CBOE 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 these statements may be examined at the places specified in 
Item IV below. CBOE 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange's customer portfolio margining program, as previously 
approved by the Commission, allows broker-dealers, for eligible 
securities, to compute customer margin requirements based on a 
portfolio margining methodology. The program is codified in CBOE Rules 
9.15(c)--Delivery of Current Options Disclosure Documents, 12.4--
Portfolio Margin, 13.5--Customer Portfolio Margin Accounts, and 15.8A--
Risk Analysis of Portfolio Margin Accounts.
    The Exchange proposes to amend Rules 12.4 and 15.8A to add certain

[[Page 46106]]

provisions to those rules that are currently included in the 
``Frequently Asked Questions'' regarding portfolio margin requirements 
published by the New York Stock Exchange.\5\ Specifically, the Exchange 
proposes to amend Rule 12.4(i)(5) to specify that a portfolio margin 
account has three days to meet a requisite margin call incurred as a 
result of a day trade. The Exchange proposes to amend Rule 15.8A(c) to 
specify that a member organization shall monitor the credit exposure 
resulting from concentrated positions within both individual portfolio 
margin accounts and across all portfolio margin accounts.\6\ The 
effective date of the proposed rule change shall be August 1, 2008.
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    \5\ This document is located at http://www.nyse.com/pdfs/
PortfolioMargin_101707.pdf.
    \6\ The Exchange understands that FINRA proposed similar rule 
changes that, if approved, would continue to provide a uniform 
approach with respect to portfolio margining. See (SR-FINRA-2008-
042).
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2. Statutory Basis
    Because the proposed rule change codifies previously issued SRO 
guidance regarding portfolio margining, the Exchange believes the 
proposed rule change is consistent with Section 6(b) of the 
Exchange,\7\ in general, and furthers the objectives of Section 6(b)(5) 
of the Act \8\ in particular, in that it is designed to perfect the 
mechanism of a free and open market and to protect investors and the 
public interest.
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    \7\ 15 U.S.C. 78f(b).
    \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 that is 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 constitutes a stated 
policy, practice or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and paragraph 
(f)(1) of Rule 19b-4 thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(1).
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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-2008-74 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CBOE-2008-74. 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 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-2008-74 and should be 
submitted on or before August 28, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-18074 Filed 8-6-08; 8:45 am]

BILLING CODE 8010-01-P