[Federal Register Volume 75, Number 105 (Wednesday, June 2, 2010)]
[Notices]
[Pages 30889-30890]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-13160]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62170; File No. SR-CBOE-2010-048]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Permit CBOE To Open Short Term Option Series on
Thursdays
May 25, 2010.
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 May 19, 2010, the Chicago Board Options Exchange, Incorporated
(``Exchange'' or ``CBOE'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I, II, and III 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
CBOE proposes to modify its rules to permit the Exchange, on any
Thursday or Friday, to open Short Term Option Series that expire on the
Friday of the following business week. The Exchange is not proposing
any rule text changes. The rule proposal 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 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
The Securities and Exchange Commission previously approved CBOE's
proposed rule change to permanently establish the Short Term Option
Series Pilot Program (``Program'').\5\ The Program allows CBOE to list
and trade equity and index option series that expire one week after
being opened for trading. Specifically, Rules 5.5(d) and 24.9 provide
that, after an option class has been approved for listing and trading
on the Exchange, the Exchange may open for trading on any Friday that
is a business day series of options on that class that expire on the
next Friday that is a business day.\6\ Under the Program, CBOE may
select up to five approved option classes on which Short Term Options
Series may be opened. The Exchange has selected the following four
option classes to participate in the Program: S&P 500 Index options
(SPX), S&P 100 Index American-style options (OEX), Mini-S&P 500 Index
options (XSP), and S&P 100 Index European-style options (XEO).
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\5\ See Securities Exchange Act Release No. 59824 (April 27,
2009), 74 FR 20518 (May 4, 2009) (SR-CBOE-2009-018).
\6\ If the Exchange is not open for business on a Friday, the
Short Term Opening Date will be the first business day immediately
prior to that Friday. Similarly if the Exchange is not open for
business on a Friday, the Short Term Option Expiration Date will be
the first business day immediately prior to that Friday.
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The purpose of this filing is to permit the Exchange to open Short
Term Option Series on any Thursday (or Friday) that expire on the
Friday of the following business week. In support of this modification,
the Exchange states that it has received requests to begin certain
Short Term Options on Thursday so that market participants may have an
opportunity to ``roll'' expiring positions; that is, trade out of an
expiring Short Term Option Series and re-establish a new position in
Short Term Option Series expiring one week later. Since the last
trading day for A.M.-settled Short Term Options on indexes is generally
a Thursday, and new A.M.-settled Short Term Option Series on indexes
are generally listed on Friday, new and expiring A.M.-settled Short
Term Option Series on indexes are never available concurrently.
As a result, it is impossible to implement a position roll in A.M.-
settled Short Term Options on indexes. The Exchange has been advised
that opening A.M.-settled Short Term Options on indexes just one day
earlier, and providing an opportunity to roll, would enhance the value
A.M.-settled Short Term Options on indexes as a risk management tool.
In order to avoid investor confusion, the Exchange is proposing to
permit the listing of all Short Term Option series (equity and index)
on any Thursday or Friday. As proposed, the rule changes give the
Exchange the flexibility to list Short Term Option series on any
Thursday or Friday, and do not restrict listing to a particular day.
2. Statutory Basis
The Exchange believes this rule proposal 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.\7\ Specifically, the Exchange believes that the
proposed rule change is consistent with the Section 6(b)(5) Act \8\
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. In particular, the
[[Page 30890]]
proposed rule change will benefit market participants by allowing them
to more closely manage their risk exposures and carry out their
investment objectives.
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\7\ 15 U.S.C. 78f(b).
\8\ 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
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 proposed rule 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 if consistent with the protection of
investors and the public interest, provided that the self-regulatory
organization has given the Commission written notice of its intent to
file 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 proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6) thereunder.\10\ 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.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6). Rule 19b-4(f)(6)(iii) requires the
self-regulatory organization to submit to the Commission 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.
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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 [email protected]. Please include
File Number SR-CBOE-2010-048 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-2010-048. 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 Web site viewing and
printing 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 the 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-2010-048 and should be
submitted on or before June 23, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-13160 Filed 6-1-10; 8:45 am]
BILLING CODE 8010-01-P