[Federal Register Volume 75, Number 213 (Thursday, November 4, 2010)]
[Notices]
[Pages 68015-68017]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-27858]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63213; File No. SR-CBOE-2010-098]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Related to Market Maker Tier Appointment Cost for SPX
October 29, 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 October 25, 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 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 CBOE rules relating to the
appointment cost for options on the Standard and Poor's 500 Index
(SPX). 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'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, 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.
[[Page 68016]]
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this rule change is to amend CBOE Rule 8.3,
Appointment of Market-Makers, to revise the appointment cost for SPX
options. Specifically, CBOE is proposing to amend Rule 8.3(c)(iii) to
increase the appointment cost for SPX from .95 to 1.0. Among other
reasons, the Exchange believes the appointment cost change is
reasonable in light of the planned introduction of a multi-platform
feature to SPX (discussed below).
By way of background, CBOE currently operates the Hybrid Trading
System and the Hybrid 3.0 Platform.\5\ The particular trading platform
on which index options and options on exchange-traded funds (``ETFs'')
are traded are designated by the Exchange on a class-by-class basis
pursuant to Rule 8.14, Index Hybrid Trading System Classes: Market-
Maker Participants. However, CBOE recently submitted a rule change to
amend Rule 8.14 to provide that, for each Hybrid 3.0 class, the
Exchange may determine to authorize a group of series of the class for
trading on the Hybrid Trading System.\6\
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\5\ The ``Hybrid Trading System'' refers to the Exchange's
trading platform that allows Market-Makers to submit electronic
quotes in their appointed classes. The ``Hybrid 3.0 Platform'' is an
electronic trading platform on the Hybrid Trading System that allows
one or more quoters to submit electronic quotes which represent the
aggregate Market-Maker quoting interest in the series for the
trading crowd. See Rule 1.1(aaa).
\6\ See SR-CBOE-2010-095.
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Currently, all series of the SPX option class trade on the Hybrid
3.0 Platform. Pursuant to Rule 8.14, as amended, the Exchange may
determine to designate a group of series in the SPX index option class
for trading on the Hybrid Trading System. In conjunction with this
change, the Exchange is proposing to increase the SPX appointment cost
from .95 back to 1.0 effective December 1, 2010.\7\ The appointment
cost would confer the right to trade in open outcry the SPX series that
are traded on the Hybrid 3.0 Platform and also confer the right to
trade any group of series of SPX that the exchange may determine to
authorize for trading on the Hybrid Trading System pursuant to Rule
8.14, as amended.
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\7\ The Exchange notes that the appointment cost for SPX had
previously been 1.0. See Securities Exchange Act Release No. 57752
(May 1, 2008), 73 FR 25813 (May 7, 2008) (SR-CBOE-2008-051)
(immediately effective rule change that changed the SPX appointment
cost from 1.0 to .95).
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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.\8\ Specifically, the Exchange believes the
proposed rule change is consistent with the Section 6(b)(5) Act \9\
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. Among other reasons, the Exchange believes that the
appointment cost change for SPX is reasonable in light of the
introduction of the multi-platform feature to SPX.
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\8\ 15 U.S.C. 78f(b).
\9\ 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 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
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 foregoing 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 prior to 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, the proposed rule
change has become effective pursuant to Section 19(b)(3)(A) of the Act
\10\ and Rule 19b-4(f)(6)(iii) thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires the self-regulatory organization to give the
Commission 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. CBOE has satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend 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 [email protected]. Please include
File Number SR-CBOE-2010-098 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-2010-098. 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 self-regulatory
organization. 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-2010-098 and should be submitted on or before November 26, 2010.
[[Page 68017]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-27858 Filed 11-3-10; 8:45 am]
BILLING CODE 8011-01-P