Document ID: SEC-2007-1010-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Chicago Board Options Exchange, Inc.
Posted Date: 2007-07-27T04:00Z

[Federal Register: July 27, 2007 (Volume 72, Number 144)]
[Notices]               
[Page 41365-41366]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27jy07-90]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56109; File No. SR-CBOE-2007-75]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to the Extension of the Customer 
Portfolio Margin Pilot Program

July 19, 2007.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on June 29, 2007, 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 CBOE. CBOE has filed the proposed rule as a 
``non-controversial'' proposed rule change pursuant to 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

    CBOE proposes to extend an existing customer portfolio margining 
pilot program (``Pilot Program'') through July 31, 2008. The Pilot 
Program is codified in CBOE Rules 12.4, 9.15(c), 13.5 and 15.8A. There 
is no change to the rule

[[Page 41366]]

text in conjunction with this proposed rule change. The text of the 
proposed rule change is available on CBOE's Web site (http://www.cboe.org/legal
), at CBOE'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, 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 IV below. CBOE 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Pilot Program, as previously approved by the Commission, allows 
broker-dealers, for eligible securities, to compute customer margin 
requirements based on a portfolio margining methodology.
    The purpose of the proposed rule change is to extend the Pilot 
Program for a twelve-month period, commencing on August 1, 2007, 
through July 31, 2008. The existing Pilot Program expires on July 31, 
2007. The Exchange believes that extending the Pilot Program for twelve 
months is warranted in that time is needed to assess the operation of 
the rules, especially in light of the fact that amendments to the rule 
effective April 2, 2007, made equities, equity options, narrow-based 
index options, unlisted derivatives and security futures eligible for 
portfolio margining.\5\ CBOE has not encountered any problems or 
difficulties relating to the Pilot Program since its inception. For 
these reasons and the reasons cited in the Pilot Adoption Filing, CBOE 
requests that the Commission extend the Pilot Program through July 31, 
2008. CBOE proposes to make the proposed rule change operative on July 
31, 2007.
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    \5\ See Exchange Act Release No. 54919 (December 12, 2006), 71 
FR 75781 (December 18, 2006); see also Exchange Act Release No. 
52032 (July 14, 2005), 70 FR 42118 (July 21, 2005) (``Pilot Adoption 
Filing'').
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2. Statutory Basis
    CBOE believes that the proposed rule change is consistent with the 
section 6(b) of the Act,\6\ in general, and furthers the objectives of 
section 6(b)(5) \7\ of the Act, in particular, because it is designed 
to promote just and equitable principles of trade, to prevent 
fraudulent and manipulative acts and practices, and, in general, to 
protect investors and the public interest.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78(f)(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

    Because the foregoing 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 after the date of filing, or such shorter time as the 
Commission may designate, it has become effective pursuant to section 
19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
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    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.

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-2007-75 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-2007-75. 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 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-2007-75 and 
should be submitted on or before August 17, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-14505 Filed 7-26-07; 8:45 am]

BILLING CODE 8010-01-P