Document ID: SEC-2008-1003-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2008-07-18T04:00Z

[Federal Register: July 18, 2008 (Volume 73, Number 139)]
[Notices]               
[Page 41386-41388]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18jy08-123]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58153; File No. SR-CBOE-2008-67]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Delete References to Hybrid 2.0 Platform and Hybrid 2.0 
Option Classes

July 14, 2008.
    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 July 9, 2008, the Chicago Board Options Exchange, Incorporated 
(the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange 
Commission (the ``Commission'') the proposed rule change as described 
in Items I and II 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

    The Exchange proposes to amend its rules to delete references to 
Hybrid 2.0 option classes and the Hybrid 2.0 Platform. The text of the 
proposed rule change is available at the Exchange, the Commission's 
Public Reference Room, and http://www.cboe.org/Legal.

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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    CBOE proposes to amend its rules to delete references to Hybrid 2.0 
option classes and the Hybrid 2.0 Platform. Initially, when CBOE 
implemented its Hybrid Trading System in 2003, it permitted Market-
Makers to stream electronic quotes in their appointed classes provided 
they were physically present at the trading station. CBOE subsequently 
implemented an enhanced version of Hybrid called the Hybrid 2.0 
Platform which allowed remote quoting in option classes, i.e., Hybrid 
2.0 option classes. (See Rule 1.1(aaa).) Over time, CBOE migrated 
nearly all of its option classes to the Hybrid 2.0 Platform and 
permitted Market-Makers and formerly Remote Market-Makers \5\ to quote 
remotely.\6\
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    \5\ CBOE recently deleted reference to Remote Market-Makers in 
its rules. All Remote Market-Makers are now called Market-Makers. 
See Securities Exchange Act Release No. 57615 (April 3, 2008), 73 FR 
19537 (April 10, 2008) (SR-CBOE-2007-120).
    \6\ Presently, only three option classes are not traded on the 
Hybrid 2.0 Platform--MVR, OEX, and SPX. These three option classes 
are traded on the Hybrid 3.0 Platform, which is an electronic 
trading platform on the Hybrid Trading System that allows a single 
quoter to submit an electronic quote which represents the aggregate 
Market-Maker quoting interest in a series for the trading crowd. 
(See Rule 1.1(aaa).) CBOE is not deleting reference to the Hybrid 
3.0 Platform in this rule filing.

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[[Page 41387]]

    In light of these changes, CBOE no longer believes it is necessary 
to distinguish in its rules between Hybrid option classes and Hybrid 
2.0 option classes. Accordingly, CBOE proposes to delete the references 
in its rules to the Hybrid 2.0 Platform and Hybrid 2.0 option classes. 
Going forward, all option classes, except for the three traded on the 
Hybrid 3.0 Platform, would be referred to as Hybrid classes and traded 
on the Hybrid Trading System. CBOE also proposes to delete reference to 
``non-Hybrid'' classes, since there are not any of these classes. 
Finally, CBOE proposes to make other technical changes to its rules 
necessitated by the deletion of Hybrid 2.0 option classes and the 
Hybrid 2.0 Platform, such as deleting duplicative material.
    CBOE believes that the foregoing changes to the rules are simply 
administrative in nature and are not substantive.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations under the Act applicable to a 
national securities exchange and, in particular, the requirements of 
Section 6(b) of the Act. Specifically, the Exchange believes the 
proposed rule change is consistent with the Section 6(b)(5) Act \7\ 
requirements that the rules of an exchange be designed to promote just 
and equitable principles of trade, to prevent fraudulent and 
manipulative acts and, in general, to protect investors and the public 
interest. Deleting the references to Hybrid 2.0 option classes and the 
Hybrid 2.0 Platform also will eliminate any confusion regarding the 
trading platforms on which certain option classes trade.
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    \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 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

    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 for 30 
days after the date of filing, 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 \8\ and subparagraph (f)(6) of Rule 
19b-4 thereunder.\9\ As required under Rule 19b-4(f)(6)(iii),\10\ CBOE 
provided 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 5 days prior to the filing of the 
proposed rule change.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6)(iii).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
not become operative prior to the 30th day after the date of 
filing.\11\ However, Rule 19b-4(f)(6)(iii) \12\ permits the Commission 
to designate a shorter time if such action is consistent with the 
protection of investors and the public interest. CBOE requested that 
the Commission waive the 30-day operative delay and make the proposed 
rule change operative upon filing because deleting the references to 
Hybrid 2.0 option classes and the Hybrid 2.0 Platform is administrative 
in nature and does not substantively change CBOE's rules. Additionally, 
by making these changes, CBOE believes it will eliminate confusion as 
to the whether an option class is traded on the Hybrid Trading System 
or Hybrid 2.0 Platform. For these reasons, the Commission believes that 
waiving the 30-day operative delay is consistent with the protection of 
investors and the public interest. Accordingly, the Commission 
designates the proposed rule change operative upon filing with the 
Commission.\13\
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    \11\ See id.
    \12\ Id.
    \13\ 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 Number SR-CBOE-2008-67 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-2008-67. 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 Number SR-CBOE-2008-67 and should be 
submitted on or before August 8, 2008.

[[Page 41388]]

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-16460 Filed 7-17-08; 8:45 am]

BILLING CODE 8010-01-P