Document ID: SEC-2007-0240-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Chicago Board Options Exchange, Inc.
Posted Date: 2007-02-15T05:00Z

[Federal Register: February 15, 2007 (Volume 72, Number 31)]
[Notices]               
[Page 7489-7490]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15fe07-119]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55262; File No. SR-CBOE-2007-09]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change and Amendment No. 1 Thereto to Amend CBOE Rules Relating to 
CBOE's Determination to Trade Options on the NASDAQ 100 Index (NDX) on 
the Hybrid 2.0 Platform and Options on the S&P 100 (XEO) on the Hybrid 
Trading System

February 8, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on January 26, 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 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 Exchange filed Amendment No. 1 to 
the proposed rule change on February 7, 2007. 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 amend its rules relating to CBOE's determination 
to trade options on the NASDAQ 100 Index (NDX) on the Hybrid 2.0 
Platform and options on the S&P 100 (XEO) on the Hybrid Trading System. 
The text of the proposed rule change is available on CBOE's Web site 
(http://www.cboe.org/Legal), at the CBOE'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 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 these 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this rule change is to amend CBOE Rule 8.3 in 
connection with CBOE's determination to trade options on the NASDAQ 100 
Index (NDX) on the Hybrid 2.0 Platform.\5\ Additionally, CBOE proposes 
to amend Rule 8.3 in connection with CBOE's determination to trade 
options on the S&P 100 (XEO) on the Hybrid Trading System.
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    \5\ CBOE Rule 1.1(aaa) defines Hybrid Trading System and Hybrid 
2.0 Platform.
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    NDX currently has an appointment cost of 1.0. CBOE intends to lower 
NDX's appointment cost to .50 when NDX trades on the Hybrid 2.0 
Platform. As a result, NDX will be classified in Tier AA. CBOE intends 
to trade NDX on the Hybrid 2.0 Platform beginning on February 6, 2007.
    CBOE proposes to amend Rule 8.3(c)(ii) to specifically reference 
XEO as an option class trading on the Hybrid Trading System.\6\ 
Presently, XEO and options on the S&P 100 (OEX) collectively have an 
appointment cost of 1.0. CBOE proposes to maintain the same appointment 
cost when XEO trades on the Hybrid Trading System. CBOE intends to 
trade XEO on the Hybrid Trading System beginning on January 30, 2007.
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    \6\ Reference to XEO will also be deleted in the table listing 
the non-Hybrid option classes and their related appointment costs. 
(See Rule 8.3(c)(iv).)
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
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.\7\ Specifically, the Exchange believes the 
proposed rule change is consistent with 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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    \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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(iii) of the Act \9\ and subparagraph (f)(6) of Rule 19b-4 
\10\ thereunder because it does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; (iii) become operative for 30 days 
from the date on which it was filed, or such shorter time as the 
Commission may designate; and the Exchange has given the Commission

[[Page 7490]]

written notice of its intention to file the proposed rule change at 
least five business days prior to filing. At any time within 60 days of 
the filing of such 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
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    Under Rule 19b-4(f)(6) of the Act,\11\ the proposal does not become 
operative for 30 days after the date of its filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest. The Exchange has requested that 
the Commission waive the 30-day operative date, so that the proposal 
may take effect on January 30, 2007 for XEO options and on February 6, 
2007 for NDX options. The Exchange believes that the proposed rule 
change does not raise any new regulatory issues. The Commission agrees 
and, consistent with the protection of investors and the public 
interest, has determined to waive the 30-day operative date, which 
renders the proposal effective on January 30, 2007 for XEO options and 
on February 6, 2007 for NDX options.\12\
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    \11\ Id. Rule 19b-4(f)(6) also requires the self-regulatory 
organization to give the Commission notice of its intention to file 
the proposed rule change, along with a brief description and text of 
the proposed rule change, at leave five business days prior to the 
date of filing the proposed rule change, or such shorter time 
designated by the Commission. CBOE has satisfied the five-day 
prefiling requirement.
    \12\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition and capital formation. 15 U.S.C. 
78c(f).
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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, as amended, 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-2007-09 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-2007-09. 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. 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-2007-09 and should be 
submitted on or before March 8, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E7-2612 Filed 2-14-07; 8:45 am]

BILLING CODE 8010-01-P