Document ID: SEC-2009-1632-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposal To Codify Certain Provisions
Posted Date: 2009-11-19T05:00Z

[Federal Register: November 19, 2009 (Volume 74, Number 222)]
[Notices]               
[Page 60008-60009]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19no09-82]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60995; File No. SR-CBOE-2009-084]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposal To Codify Certain Provisions of the Options Listing Procedures 
Plan Into CBOE's Rules

November 13, 2009.
    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 October 30, 2009, the Chicago Board Options Exchange, 
Incorporated (``Exchange'' or ``CBOE'') filed with the Securities and 
Exchange Commission (the ``Commission'') the proposed rule change as 
described in Items I, II, and III 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

    For ease of reference, CBOE proposes to codify certain provisions 
of the Options Listing Procedures Plan (``OLPP'') into its rules. 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
    The Options Listing Procedures Plan (``OLPP'') was approved by the 
Securities and Exchange Commission (the ``Commission'') on July 6, 2001 
and has been amended several times.\5\ The OLPP provides procedures 
for: (i) Listing and trading new option classes; (ii) selecting new 
options series; (iii) petitioning The Options Clearing Corporation 
(``OCC'') to review the eligibility, pursuant to the exchanges' listing 
standards, of a selected option class without delaying the trading of 
that option class; (iv) determining operational details for option 
contracts adjusted pursuant to OCC By-Laws; (v) admitting new sponsors; 
and (vi) losing eligibility to participate in the OLPP.
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    \5\ See e.g., Securities Exchange Act Release Nos. 44521 (July 
6, 2001), 66 FR 36809 (July 13, 2001) (order approving OLPP); 58205 
(July 22, 2008), 73 FR 43798 (July 28, 2008) (order granting 
permanent approval to amendment no. 1 to the OLPP); 58630 (September 
24, 2008) 73 FR 57166 (October 1, 2008) (order granting permanent 
approval to amendment no. 2 to the OLPP); and 60531 (August 19, 
2009), 74 FR 43173 (August 26, 2009) (order approving amendment no. 
3 to the OLPP).
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    This current filing is primarily concerned with codifying certain 
provisions of the OLPP pertaining to selecting new option series and 
certain strike setting parameters that have been adopted under the 
OLPP. The Exchange believes that it is helpful to codify select 
provisions into CBOE's rules so that all applicable rules governing 
series selection and applicable strike setting parameters are located 
in a single place. In addition, the Exchange understands that other 
Sponsor Exchanges to the OLPP will be submitting similar filings to 
codify portions of the OLPP in their respective rulebooks. Below the 
Exchange briefly describes the provisions of the OLPP that the Exchange 
is proposing to codify into CBOE's rules.

OLPP Amendments Pertaining to LEAPS

    Amendments 1 and 2 to the OLPP adopted provisions governing the 
listing of Long-Term Equity Option Series (``LEAPS''). Amendment 1 
provided for a uniform time frame for the introduction of new LEAPS on 
equity option classes, options on exchange traded funds (``ETFs''), or 
options on Trust Issued Receipts (``TIRs''). The Exchange is proposing 
to codify the changes made to the OLPP by Amendment 1 as new 
subparagraph (c) to Rule 5.8, Long-Term Equity Option Series 
(LEAPS[supreg]). Amendment 2

[[Page 60009]]

provided for a uniform minimum volume threshold per underlying class to 
qualify for the introduction of a new expiration year of LEAPs on 
equity, ETF and TIR classes. The Exchange is proposing to codify the 
changes made to the OLPP by Amendment 2 as new subparagraph (d) to Rule 
5.8.

Strike Setting Parameters

    Amendment 3 to the OLPP adopted uniform objective standards to the 
range of options series exercise (or strike) prices available for 
trading on Sponsor Exchanges to the OLPP as a quote mitigation 
strategy. The Exchange is proposing to codify the changes made to the 
OLPP by Amendment 3 as new Rule 5.5A, Select Provisions of Options 
Listing Procedures Plan. The Exchange is proposing to create a new rule 
that can be easily amended in the future if other amendments to the 
OLPP are made which similarly warrant being codified into CBOE's rules.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \6\ of the Act, in general, and furthers the 
objectives of Section 6(b)(5),\7\ in particular, in that it is designed 
to prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, and to remove impediments to and perfect the mechanisms of 
a free and open market and a national market system, and, in general, 
to protect investors and the public interest. The Exchange believes 
that codifying certain provisions of the OLPP, as amended, serves to 
foster investor protection.
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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 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 Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
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, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6)(iii) thereunder.\11\
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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires the Exchange to give the Commission written 
notice of the Exchange's intent to file the proposed rule change 
along with a brief description and the 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 satisfied the pre-filing requirement.
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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-2009-084 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-2009-084. 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 self-regulatory 
organization. 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-2009-084 and should be submitted on or before December 10, 2009.

    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,
Deputy Secretary.
[FR Doc. E9-27749 Filed 11-18-09; 8:45 am]

BILLING CODE 8011-01-P