Document ID: SEC-2009-1337-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange Inc.
Posted Date: 2009-09-21T04:00Z

[Federal Register: September 21, 2009 (Volume 74, Number 181)]
[Notices]               
[Page 48112-48114]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21se09-86]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60666; File No. SR-CBOE-2009-062]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to Dissemination of Certain Index Data

September 14, 2009.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on August 28, 2009, the Chicago Board Options Exchange, 
Incorporated (``CBOE'' or the ``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. The Exchange filed the proposal as ``non-controversial'' pursuant 
to Section 19(b)(3)(A)(iii) of the Act \4\ and Rule 19b-4(f)(6) 
thereunder, which renders it effective upon filing.\5\ The Commission 
is publishing this notice to solicit comments on the proposed rule 
change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \5\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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

    Chicago Board Options Exchange, Incorporated (``CBOE'' or 
``Exchange'') is not proposing any textual changes to the Constitution 
or Rules of CBOE in this filing. The Exchange is proposing to update 
statements that it made in Item 3 of previous filings made by the 
Exchange pursuant to Rule 19b-4, as described in subsection (a)(1) of 
Item 3 of this filing. 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.

[[Page 48113]]

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 
Statutory Basis for, Proposed Rule Change

1. Purpose
    CBOE currently disseminates values of its proprietary indexes and 
many of the indexes licensed by CBOE to underlie options traded on CBOE 
through the Options Price Reporting Authority (``OPRA''). Some of these 
indexes underlie options approved for listing and trading on CBOE by 
the Commission pursuant to filings submitted by CBOE pursuant to Rule 
19b-4. In some of these filings, CBOE stated that the values of the 
respective indexes would be disseminated through OPRA.\6\
---------------------------------------------------------------------------

    \6\ For example, in its filing with respect to the options on 
the RVX, CBOE stated that ``Volatility index levels [of the RVX] 
will be calculated by CBOE and disseminated at 15-second intervals 
to market information vendors via the Options Price Reporting 
Authority (``OPRA''),'' and the Commission noted this statement in 
its approval order for these options. See Securities Exchange Act 
Release No. 54643 (October 23, 2006), 71 FR 63367 (October 30, 2006) 
(notice of filing of File No. SR-CBOE-2006-73) and Securities 
Exchange Act Release No. 55425 (March 8, 2007), 72 FR 12238 (March 
15, 2007) (approval of File No. SR-CBOE-2006-73). Similar statements 
were made in CBOE filings with respect to options on the following 
indexes: See Securities Exchange Act Release Nos. 32893 (September 
14, 1993), 58 FR 49070 (September 21, 1993) (XSP); 58207 (July 22, 
2008), 73 FR 43963 (July 29, 2008) (BXM); 32244 (April 29, 1993), 58 
FR 27005 (May 6, 1993) (CEX); 48807 (November 19, 2003), 68 FR 66516 
(November 26, 2003) (VIX, VXD, VXN); 49698 (May 13, 2004), 69 FR 
29152 (May 20, 2004) (VXB); 39011 (September 3, 1997), 62 FR 47840 
(September 11, 1997) (DJX, DXL, WDX); 39012 (September 3, 1997), 62 
FR 47850 (September 11, 1997) (DTX); 39013 (September 3, 1997), 62 
FR 47845 (September 11, 1997) (DUX, LDU); 41112 (February 25, 1999), 
64 FR 10517 (March 4, 1999) (ECM, ZJ); 41009 (February 1, 1999), 64 
FR 6410 (February 9, 1999) (DJR); 38353 (February 28, 1997), 62 FR 
10888 (March 10, 1997) (NFT); 31382 (October 30, 1992), 57 FR 52802 
(November 5, 1992) (RUT); 48591 (October 2, 2003), 68 FR 58728 
(October 10, 2003) (RUI, RUA); 51220 (February 17, 2005), 70 FR 
09398 (February 25, 2005) (RMN); 32238 (April 29, 1993), 58 FR 27020 
(May 6, 1993) (BIX); 32241 (April 29, 1993), 58 FR 27012 (May 6, 
1993) (HCX); 32239 (April 29, 1993), 58 FR 27024 (May 6, 1993) 
(IUX); 32240 (April 29, 1993), 58 FR 27016 (May 6, 1993) (RLX); and 
34124 (May 27 1994), 59 FR 29310 (June 6 1994) (SGX, SVX).
---------------------------------------------------------------------------

    Since 2006, CBOE has also disseminated values of its proprietary 
indexes and certain licensed indexes to major market data vendors 
outside of OPRA. For its proprietary and other indexes subject to a 
requirement that dissemination of the index values occur through OPRA 
pursuant to the filings noted above, the Exchange proposes to amend 
such requirement to permit dissemination of these values to major 
market data vendors solely outside of OPRA.
    CBOE believes that its proposal to permit dissemination of its 
proprietary and certain other index values to major market data vendors 
solely outside of OPRA will continue to be in full compliance with the 
Commission's requirements with respect to the dissemination of values 
of indexes underlying options and CBOE's own applicable rules. CBOE 
Rule 24.2 requires that values of an underlying index be widely 
disseminated at least once every fifteen seconds if the listing of a 
class of options on the index is not the subject of a separate filing, 
and this will continue to be the case for index values that cease to be 
disseminated on OPRA.\7\ CBOE Rule 24.3(a) requires that ``The Exchange 
shall disseminate or shall assure that the current index value is 
disseminated after the close of business and from time-to-time on days 
on which transactions in index options are made on the Exchange,'' and 
this also will continue to be the case for index values that cease to 
be disseminated on OPRA.
---------------------------------------------------------------------------

    \7\ See CBOE Rules 24.2(b)(10) (values of narrow-based index 
options must be ``reported at least once every fifteen seconds 
during the time the index options are traded on the Exchange''), 
24.2(d)(8) (values of micro narrow-based index options must be 
``reported at least once every fifteen seconds during the time the 
index options are traded on the Exchange''), and 24.2(f)(11) (the 
Exchange may trade options on a broad-based index pursuant to Rule 
19b-4(c) of the Exchange act if `` * * * (11) The current index 
value is widely disseminated at least once every fifteen (15) 
seconds by the Options Price Reporting Authority, CTA/CQ, NIDS or 
one or more major market data vendors during the time options on the 
index are traded on the Exchange''). It has been pointed out to CBOE 
that the language of 24.2(f)(11) is not parallel to the language of 
24.2(b)(10) and 24.2(d)(8), particularly in the use of the word 
``disseminated'' in the first of these provisions and the word 
``reported'' in the second and third of them. CBOE believes that the 
three provisions are intended to be substantively parallel, and CBOE 
intends to amend these Rules in a separate filing to conform their 
language by using the word ``disseminate'' in all three provisions.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Act \8\ in general, and Section 6(b)(5) of the Act 
\9\ in particular, in that it updates statements made by the Exchange 
in previous filings that would either become inaccurate or impede the 
Exchange from modifying its dissemination of index values in a manner 
that is consistent with the objectives of the Act.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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 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 forgoing 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 for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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 satisfied this requirement.
---------------------------------------------------------------------------

    The long standing policy of the Commission with respect to the 
dissemination of values of indexes underlying index options has been to 
ensure the wide dissemination and wide availability of index values to 
market participants. This policy is reflected in CBOE Rule 24.2, which 
requires that values of an underlying index be widely disseminated at 
least once every fifteen seconds if the listing of a class of options 
on the index is not the subject of a separate filing.\12\ The Exchange 
believes the proposed rule change is consistent both with CBOE Rule 
24.2 and this Commission policy. Based on the foregoing, the Exchange 
designates this proposed rule change as

[[Page 48114]]

immediately effective under Rule 19b-4(f)(6) \13\ of the Act.
---------------------------------------------------------------------------

    \12\ See supra note 2.
    \13\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    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-2009-062 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-2009-062. 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-2009-062 and should be 
submitted on or before October 13, 2009.
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-22684 Filed 9-18-09; 8:45 am]

BILLING CODE 8010-01-P