Document ID: SEC-2008-0961-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc., LLC
Posted Date: 2008-07-11T04:00Z

[Federal Register: July 11, 2008 (Volume 73, Number 134)]
[Notices]               
[Page 40000-40001]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11jy08-86]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58094; File No. SR-CBOE-2008-70]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated, LLC; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change To Extend the Short Term Option Series Pilot 
Program

July 3, 2008.
    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 July 2, 2008, 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 substantially prepared by 
the Exchange. The Exchange has designated this proposal as non-
controversial under Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 
19b-4(f)(6) thereunder,\4\ which renders the proposed rule change 
effective upon filing with 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)(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

    The Exchange proposes to extend the period for its Short Term 
Option Series pilot program (``Pilot Program'') through July 12, 2009. 
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.

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
    On July 12, 2005, the Commission approved the Pilot Program.\5\ The 
Pilot Program allows CBOE to list and trade Short Term Option Series, 
which would expire one week after the date on which a series is opened.
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    \5\ See Securities Exchange Act Release No. 52011 (July 12, 
2005), 70 FR 41451 (July 19, 2005) (SR-CBOE-2004-63) (``Pilot 
Program Approval Order''). The Pilot Program has since been extended 
and is currently scheduled to expire on July 12, 2008. See 
Securities Exchange Act Release Nos. 53984 (June 14, 2006), 71 FR 
35718 (June 21, 2006) (SR-CBOE-2006-48) (extending the Pilot Program 
through July 12, 2007) and 56050 (July 11, 2007), 72 FR 39472 (July 
18, 2007) (SR-CBOE-2007-76) (extending the Pilot Program through 
July 12, 2008); see also Securities Exchange Act Release No. 54338 
(August 21, 2006), 71 FR 50952 (August 28, 2006) (SR-CBOE-2006-49) 
(order approving an amendment to the Pilot Program that increased 
the number of series that may be listed for a class selected to 
participant in the Pilot Program from five series to seven series).
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    The Exchange has selected the following four options classes to 
participant in the Pilot Program: S&P 500 Index options (SPX), S&P 100 
Index American-style options (OEX), Mini-S&P 500 Index options (XSP), 
and S&P 100 Index European-style options (XEO). CBOE believes the Pilot 
Program has been successful and well received by its members and the 
investing public. Thus, CBOE proposes to extend the Pilot Program 
through July 12, 2009.
    In support of the proposed rule change, and as required by the 
Pilot

[[Page 40001]]

Program Approval Order, the Exchange is submitting to the Commission a 
Pilot Program report (the ``Report'') detailing the Exchange's 
experience with the Pilot Program. Specifically, the Report contains 
data and written analysis regarding the four options classes included 
in the Pilot Program. The Report is being submitted under separate 
cover and seeks confidential treatment under the Freedom of Information 
Act.
    The Exchange believes there is sufficient investor interest and 
demand to extend the Pilot Program another year based on the 
information provided in the Report. The Exchange believes that the 
Pilot 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 capacity-related 
problems with respect to Short Term Option Series. The Exchange also 
represents that it has the necessary system capacity to support the 
option series listed under the Pilot Program.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act \6\ and the rules and regulations thereunder 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, to 
remove impediments to and to perfect the mechanism for a free and open 
market and a national market system, and, in general, to protect 
investors and the public interest. The Exchange believes that extension 
of the Pilot Program will result in a continuing benefit to investors, 
by allowing them additional means to manage their risk exposures and 
carry out their investment objectives, and will allow the Exchange to 
further study investor interest in Short Term Option Series.
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    \6\ 15 U.S.C. 78s(b)(1).
    \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

    The Exchange believes that the proposed rule change does not 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

    The Exchange neither solicited nor received comments on the 
proposed rule change.

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

    The Exchange has designated the proposed rule change as one that: 
(1) Does not significantly affect the protection of investors or the 
public interest; (2) does not impose any significant burden on 
competition; and (3) does not become operative for 30 days from the 
date of filing, or such shorter time as the Commission may designate if 
consistent with the protection of investors and the public interest. 
Therefore, the foregoing rule change has become effective pursuant to 
Section 19(b)(3)(A) of the Act \9\ and subparagraph (f)(6) 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)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to provide the Commission 
with written notice of its intent to file the proposed rule change, 
along with a brief description and text of 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 Exchange has fulfilled this requirement.
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    The Exchange has asked the Commission to waive the operative delay 
to permit the proposed rule change to become operative prior to the 
30th day after filing. The Commission has determined that waiving the 
30-day operative delay of the Exchange's proposal is consistent with 
the protection of investors and the public interest and will promote 
competition because such waiver will allow CBOE to continue the 
existing Pilot Program without interruption.\11\ Therefore, the 
Commission designates the proposal operative upon filing.
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    \11\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 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 the 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 No. SR-CBOE-2008-70 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-2008-70. 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 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 No. SR-CBOE-2008-70 and should be 
submitted on or before August 1, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-15758 Filed 7-10-08; 8:45 am]

BILLING CODE 8010-01-P