Document ID: SEC-2009-0672-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change Regarding Appointments and Obligations of CBSX DPMs
Posted Date: 2009-05-15T04:00Z

[Federal Register: May 15, 2009 (Volume 74, Number 93)]
[Notices]               
[Page 22991-22993]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15my09-113]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59896; File No. SR-CBOE-2009-030]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing of a Proposed Rule Change Regarding 
Appointments and Obligations of CBSX DPMs

May 11, 2009.
    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 May 7, 2009, the Chicago Board Options Exchange, Incorporated 
(``CBOE'' or ``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 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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[[Page 22992]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The filing proposes to modify the CBOE Stock Exchange (``CBSX'') 
Designated Primary Market-Maker (``DPM'') appointment and obligation 
rules. The text of the proposed rule change is available on the 
Exchange's Web site (http://www.cboe.org/legal), at the Exchange's 
principal office, 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 proposed rule change is to modify CBSX Rule 
53.54 to provide CBSX with flexibility to commence trading a security 
without an assigned CBSX DPM.\3\ Several stock exchanges provide a 
trading venue for equity securities without assigned specialists or 
primary market makers. On CBSX, CBSX DPMs do not act as agent for 
orders submitted to CBSX and the matching of trades is handled by the 
CBSX system. Accordingly, trading can occur on the CBSX platform 
without participation by a CBSX DPM. The proposed rule change is not 
intended to in any way affect existing DPM appointments, instead it 
will allow CBSX to offer for trading a broader range of national market 
system securities. There are currently securities not traded on CBSX 
because CBSX DPMs have opted to not seek assignments in such securities 
(these are typically low volume securities). The proposed filing will 
allow CBSX users the ability to trade these stocks on CBSX. The 
Exchange does not believe that allowing trading in these stocks without 
a DPM will have an adverse impact on the Exchange's market in these 
securities. CBSX will notify participants, via circular, when stocks 
without assigned DPMs are added for trading.
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    \3\ A DPM is a Market-Maker with heightened responsibilities for 
assigned securities.
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    The filing also proposes to modify the CBSX DPM obligations in Rule 
53.56 to not require CBSX DPMs to quote until 8:30 a.m. Chicago time. 
Currently, CBSX DPMs are obligated to provide opening quotes (trading 
starts at 8:15 a.m. Chicago time) and to continuously quote throughout 
the day. As proposed, CBSX DPMs desiring to submit opening quotes could 
continue to do so, but would not be required to continuously quote 
until 8:30 Chicago time when trading volumes are more meaningful.
    Lastly, the filing proposes to eliminate Rule 53.54(c) which 
governed the allocation process used by CBSX prior to its initial 
launch.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Act \4\ in general and furthers the objectives of 
Section 6(b)(5) of the Act \5\ 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
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    \4\ 15 U.S.C. 78f(b).
    \5\ 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

    The Exchange neither solicited nor received comments on the 
proposal.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which CBOE consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-2009-030 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-2009-030. 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 the 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 available publicly. All 
submissions should refer to File Number SR-CBOE-2009-030 and should be 
submitted on or before June 5, 2009.

[[Page 22993]]

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-11360 Filed 5-14-09; 8:45 am]

BILLING CODE 8010-01-P