Document ID: SEC-2009-1388-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Board Options Exchange, Inc.
Posted Date: 2009-10-01T04:00Z

[Federal Register: October 1, 2009 (Volume 74, Number 189)]
[Notices]               
[Page 50853]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01oc09-126]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60710; File No. SR-CBOE-2009-057]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Order Approving Proposed Rule Change Related to Market-
Maker and Specialist Orders

September 23, 2009.

    On August 10, 2009, the Chicago Board Options Exchange, 
Incorporated (``CBOE'') filed with the Securities and Exchange 
Commission (``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to eliminate Rule 6.73(d) and its 
requirement to orally identify a Market-Maker or a Specialist order in 
open outcry before requesting a quote. The proposed rule change was 
published for comment in the Federal Register on August 19, 2009.\3\ 
The Commission received no comments on the proposal. This order 
approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 60491 (August 12, 
2009), 74 FR 41953.
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\4\ In 
particular, the Commission finds that the proposed rule change is 
consistent with the provisions of Section 6(b)(5) of the Act,\5\ which 
requires, among other things, that the CBOE rules be designed to 
promote just and equitable principles of trade, to prevent fraudulent 
and manipulative acts and practices, to remove impediments to and to 
perfect the mechanism for a free and open market and a national market 
system, and, in general, to protect investors and the public interest.
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    \4\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition and capital 
formation. See 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f(b)(5).
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    According to the CBOE, it adopted Rule 6.73(d) to ensure that 
Market-Maker and Specialist orders were not inadvertently represented 
as public customer orders, which receive preferential treatment in 
certain instances under CBOE rules.\6\ The CBOE proposes to eliminate 
the requirement in Rule 6.73(d) to orally identify the Market-Maker and 
Specialist orders in open outcry and represents that the requirement is 
superfluous and unnecessary because the preferential treatment afforded 
to public customer orders was system-enforced through the order marking 
requirement. In addition, the CBOE represents that it no longer 
utilizes the RAES trading platform for which the order identification 
procedure was introduced.
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    \6\ See Securities Exchange Act Release No. 46102 (June 21, 
2002), 67 FR 43692 (June 28, 2002) (SR-CBOE-2002-33) (immediately 
effective rule change relating to the identification of Market-Maker 
and Specialist orders).
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    In approving the proposed rule change, the Commission notes that it 
received no comments on the proposed rule change and bases its 
approval, in part, on the CBOE's representations that public customer 
orders will continue to receive appropriate preferential treatment 
under its Hybrid Trading System and existing rules.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-CBOE-2009-057) be, and it 
hereby is, approved.
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    \7\ 15 U.S.C. 78s(b)(2).
    \8\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-23624 Filed 9-30-09; 8:45 am]

BILLING CODE 8011-01-P