Document ID: SEC-2010-0109-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify Trading Hours for CBSX
Posted Date: 2010-01-21T05:00Z

[Federal Register: January 21, 2010 (Volume 75, Number 13)]
[Notices]               
[Page 3511-3513]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21ja10-98]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61349; File No. SR-CBOE-2010-004]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Modify Trading Hours for CBSX

January 14, 2010.
    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 12, 2010, 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 and II below, which Items have been prepared by CBOE. CBOE has 
submitted the proposed rule change under Section 19(b)(3)(A) of the Act 
\3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal 
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).
    \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 modify trading hours for the CBOE Stock 
Exchange (``CBSX''). 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 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 III below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

[[Page 3512]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    CBSX proposes to designate the time period from 8:30 a.m. CT until 
3 p.m. CT as ``CBSX Regular Trading Hours'' for stock, IPR and IPS 
transactions and to make certain corresponding changes. CBSX also 
proposes to designate the time periods from 8 a.m. CT until 8:30 a.m. 
CT and 3 p.m. CT until 3:30 p.m. CT as ``CBSX Extended Trading Hours'' 
and to make certain corresponding changes. The proposed change would be 
effective as of February 1, 2010. CBOE also proposes to make changes 
corresponding to SR-CBOE-2009-083, which changed the time at which CBSX 
opens from 8:15 a.m. CT to 8 a.m. CT.\5\ All changes have been 
requested by CBSX users. Other US-based exchanges permit trading after 
3 p.m. CT, including the Nasdaq Stock Market.\6\
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    \5\ See SR-CBOE-2009-083, 74 FR 57718 (November 9, 2009).
    \6\ See Nasdaq Stock Market Rules 4617 and 4120(b)(4), NYSEArca 
Rule 7.34(a), and BATS Rule 11.1(a).
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    These changes do not change the effective ``normal trading hours,'' 
on CBSX, which is and will remain from 8:30 a.m. CT to 3 p.m. CT. The 
periods from 8 a.m. CT until 8:30 a.m. CT and 3 p.m. CT until 3:30 p.m. 
CT will not qualify as ``normal trading hours.'' Therefore, trading 
rules, policies and Designated Primary Market-Maker (``DPM'') 
obligations during these periods may differ from those during normal 
trading hours, [sic] Some of these differences already exist in CBSX 
rules.
    Specifically, the ``Unusual Market Conditions'' rule pertaining to 
trading halts for trading of IPRs and IPSs imposes different procedures 
during normal trading hours than it does during the 8 a.m. CT to 8:30 
a.m. CT and 3:15 p.m. to 3:30 p.m. periods.\7\ This difference already 
existed in CBSX rules; the proposed rule change would adjust the time 
periods listed in Rule 52.3(c)(1).
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    \7\ See CBOE Rule 52.3(c)(1).
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    CBSX rules also already included differences between normal trading 
hours and the non-normal trading periods in the numerical guidelines 
used to determine whether or not a trade qualifies as ``clearly 
erroneous.'' The proposed rule change would also adjust the time 
periods listed in Rule 52.4(c)(1).
    Because the periods from 8 a.m. CT to 8:30 a.m. CT and 3 p.m. CT to 
3:30 p.m. CT are not ``normal trading hours,'' CBSX DPMs will not be 
required to provide continuous quotes during these periods. The 
proposed rule change would amend Rule 53.56 to reflect this.
    The Exchange represents that the later closing time will have no 
implications for CBSX systems. The Exchange represents that CBSX 
traders will have been notified of the time change via circular prior 
to the rule change taking effect.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the Securities Exchange Act of 1934 (``Act'') \8\ and the rules 
and regulations thereunder and, in particular, the requirements of 
Section 6(b) of the Act.\9\ Specifically, the Exchange believes that 
the proposed rule change is consistent with the Section 6(b)(5) \10\ 
requirements 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 perfect the mechanism 
for a free and open market and a national market system, and, in 
general, to protect investors and the public interest. Permitting 
trading until later in the day will permit investors greater 
opportunity to participate in the market, thereby removing an 
impediment to trading.
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    \8\ 15 U.S.C. 78s(b)(1).
    \9\ 15 U.S.C. 78f(b).
    \10\ 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

    The Exchange neither solicited nor received comments on the 
proposal.

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

    CBOE 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 
proposed rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6). Rule 19b-4(f)(6)(iii) also requires 
an exchange 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 the proposed rule change 
or such shorter time as the Commission may designate. The Exchange 
satisfied this requirement.
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    CBOE has requested that the Commission waive a portion of the 30-
day operative delay to permit the proposed rule change to become 
operative on February 1, 2010. CBOE believes that such waiver will 
facilitate CBSX providing its members with extended trading 
opportunities that are already available on other exchanges.\13\ The 
Commission grants CBOE's request.\14\ The Commission believes that such 
action is consistent with the protection of investors and the public 
interest because other U.S. exchanges currently provide extended 
trading hours subject to similar rules relating to investor 
protection.\15\ Accordingly, CBOE's proposal does not appear to present 
any novel regulatory issues.
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    \13\ See note 6, supra.
    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposal's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \15\ See CBOE Rule 31.5P.(2)(a); CBOE Rule 51.2, Interpretation 
and Policy .01 (providing required disclosures for CBSX extended 
trading hours); and CBOE Rule 51.8(a) (prohibiting the entry of 
market orders during CBSX extended trading hours). See also BATS 
Rules 3.21 and 11.9(a)(2); Nasdaq Rules 4631 and 5740(a)(2); and 
NYSEArca Rule 7.34(e).
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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-2010-004 on the subject line.

[[Page 3513]]

Paper Comments:

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

All submissions should refer to File Number SR-CBOE-2010-004. 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 publicly available. All 
submissions should refer to File Number SR-CBOE-2010-004 and should be 
submitted on or before February 11, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-1020 Filed 1-20-10; 8:45 am]
BILLING CODE 8011-01-P