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SECURITIES AND EXCHANGE COMMISSION

Securities and Exchange Commission

DOCUMENT ID: [Release No. 34-58094; File No. SR-CBOE-2008-70]

NOTICE: NOTICES

ACTION: Self-Regulatory Organizations; Proposed Rule Changes:

SUBJECT CATEGORY: Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Short Term Option Series Pilot Program

DOCUMENT SUMMARY: July 3, 2008.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b4 thereunder,\2\ notice is hereby given that on July 2, 2008, the Chicago Board Options Exchange, Incorporated (``Exchange'' or ``CBOE'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The Exchange has designated this proposal as non controversial under Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b4(f)(6) thereunder,\4\ which renders the proposed rule change effective upon filing with the Commission. 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\ 17 CFR 240.19b4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b4(f)(6).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

The Exchange proposes to extend the period for its Short Term Option Series pilot program (``Pilot Program'') through July 12, 2009. 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.
II. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, the Exchange 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. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
A. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

1. Purpose

On July 12, 2005, the Commission approved the Pilot Program.\5\ The Pilot Program allows CBOE to list and trade Short Term Option Series, which would expire one week after the date on which a series is opened. \5\ See Securities Exchange Act Release No. 52011 (July 12, 2005), 70 FR 41451 (July 19, 2005) (SRCBOE200463) (``Pilot Program Approval Order''). The Pilot Program has since been extended and is currently scheduled to expire on July 12, 2008. See Securities Exchange Act Release Nos. 53984 (June 14, 2006), 71 FR 35718 (June 21, 2006) (SRCBOE200648) (extending the Pilot Program through July 12, 2007) and 56050 (July 11, 2007), 72 FR 39472 (July 18, 2007) (SRCBOE200776) (extending the Pilot Program through July 12, 2008); see also Securities Exchange Act Release No. 54338 (August 21, 2006), 71 FR 50952 (August 28, 2006) (SRCBOE200649) (order approving an amendment to the Pilot Program that increased the number of series that may be listed for a class selected to participant in the Pilot Program from five series to seven series).

The Exchange has selected the following four options classes to participant in the Pilot Program: S&P 500 Index options (SPX), S&P 100 Index Americanstyle options (OEX), MiniS&P 500 Index options (XSP), and S&P 100 Index Europeanstyle options (XEO). CBOE believes the Pilot Program has been successful and well received by its members and the investing public. Thus, CBOE proposes to extend the Pilot Program through July 12, 2009.

In support of the proposed rule change, and as required by the Pilot
[[Page 40001]]
Program Approval Order, the Exchange is submitting to the Commission a Pilot Program report (the ``Report'') detailing the Exchange's experience with the Pilot Program. Specifically, the Report contains data and written analysis regarding the four options classes included in the Pilot Program. The Report is being submitted under separate cover and seeks confidential treatment under the Freedom of Information Act.

The Exchange believes there is sufficient investor interest and demand to extend the Pilot Program another year based on the information provided in the Report. The Exchange believes that the Pilot Program has provided investors with additional means of managing their risk exposures and carrying out their investment objectives. Furthermore, the Exchange has not experienced any capacityrelated problems with respect to Short Term Option Series. The Exchange also represents that it has the necessary system capacity to support the option series listed under the Pilot Program.

2. Statutory Basis

The Exchange believes the proposed rule change is consistent with the Act \6\ and the rules and regulations thereunder and, in particular, the requirements of Section 6(b) of the Act.\7\ Specifically, the Exchange believes the proposed rule change is consistent with Section 6(b)(5) of the Act,\8\ which requires that the rules of an exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, 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. The Exchange believes that extension of the Pilot Program will result in a continuing benefit to investors, by allowing them additional means to manage their risk exposures and carry out their investment objectives, and will allow the Exchange to further study investor interest in Short Term Option Series. \6\ 15 U.S.C. 78s(b)(1).
\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
B. SelfRegulatory Organization's Statement on Burden on Competition

The Exchange believes that the proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
C. SelfRegulatory 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 proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

The Exchange has designated the proposed rule change as one that: (1) Does not significantly affect the protection of investors or the public interest; (2) does not impose any significant burden on competition; and (3) does not become operative for 30 days from the date of filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. Therefore, the foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act \9\ and subparagraph (f)(6) of Rule 19b 4 thereunder.\10\
\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b4(f)(6). In addition, Rule 19b4(f)(6)(iii) requires a selfregulatory 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 fulfilled this requirement.

The Exchange has asked the Commission to waive the operative delay to permit the proposed rule change to become operative prior to the 30th day after filing. The Commission has determined that waiving the 30day operative delay of the Exchange's proposal is consistent with the protection of investors and the public interest and will promote competition because such waiver will allow CBOE to continue the existing Pilot Program without interruption.\11\ Therefore, the Commission designates the proposal operative upon filing.
\11\ For purposes only of waiving the 30day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f).

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 email to rulecomments@sec.gov. Please include File No. SRCBOE200870 on the subject line.
    Paper Comments
  • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 205491090. All submissions should refer to File Number SRCBOE200870. This file number should be included on the subject line if email 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 No. SRCBOE200870 and should be submitted on or before August 1, 2008.

    For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\12\
    \12\ 17 CFR 200.303(a)(12).
    Florence E. Harmon,
    Acting Secretary.
    [FR Doc. E815758 Filed 71008; 8:45 am]
    BILLING CODE 801001P

    SUMMARY: Chicago Board Options Exchange, Inc., LLC,


    DOCUMENT BODY 2: July 3, 2008.

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b4 thereunder,\2\ notice is hereby given that on July 2, 2008, the Chicago Board Options Exchange, Incorporated (``Exchange'' or ``CBOE'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I and II below, which Items have been substantially prepared by the Exchange. The Exchange has designated this proposal as non controversial under Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b4(f)(6) thereunder,\4\ which renders the proposed rule change effective upon filing with the Commission. 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\ 17 CFR 240.19b4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b4(f)(6).
    I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

    The Exchange proposes to extend the period for its Short Term Option Series pilot program (``Pilot Program'') through July 12, 2009. 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.
    II. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange 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. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
    A. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

    1. Purpose

    On July 12, 2005, the Commission approved the Pilot Program.\5\ The Pilot Program allows CBOE to list and trade Short Term Option Series, which would expire one week after the date on which a series is opened. \5\ See Securities Exchange Act Release No. 52011 (July 12, 2005), 70 FR 41451 (July 19, 2005) (SRCBOE200463) (``Pilot Program Approval Order''). The Pilot Program has since been extended and is currently scheduled to expire on July 12, 2008. See Securities Exchange Act Release Nos. 53984 (June 14, 2006), 71 FR 35718 (June 21, 2006) (SRCBOE200648) (extending the Pilot Program through July 12, 2007) and 56050 (July 11, 2007), 72 FR 39472 (July 18, 2007) (SRCBOE200776) (extending the Pilot Program through July 12, 2008); see also Securities Exchange Act Release No. 54338 (August 21, 2006), 71 FR 50952 (August 28, 2006) (SRCBOE200649) (order approving an amendment to the Pilot Program that increased the number of series that may be listed for a class selected to participant in the Pilot Program from five series to seven series).

    The Exchange has selected the following four options classes to participant in the Pilot Program: S&P 500 Index options (SPX), S&P 100 Index Americanstyle options (OEX), MiniS&P 500 Index options (XSP), and S&P 100 Index Europeanstyle options (XEO). CBOE believes the Pilot Program has been successful and well received by its members and the investing public. Thus, CBOE proposes to extend the Pilot Program through July 12, 2009.

    In support of the proposed rule change, and as required by the Pilot
    [[Page 40001]]
    Program Approval Order, the Exchange is submitting to the Commission a Pilot Program report (the ``Report'') detailing the Exchange's experience with the Pilot Program. Specifically, the Report contains data and written analysis regarding the four options classes included in the Pilot Program. The Report is being submitted under separate cover and seeks confidential treatment under the Freedom of Information Act.

    The Exchange believes there is sufficient investor interest and demand to extend the Pilot Program another year based on the information provided in the Report. The Exchange believes that the Pilot Program has provided investors with additional means of managing their risk exposures and carrying out their investment objectives. Furthermore, the Exchange has not experienced any capacityrelated problems with respect to Short Term Option Series. The Exchange also represents that it has the necessary system capacity to support the option series listed under the Pilot Program.

    2. Statutory Basis

    The Exchange believes the proposed rule change is consistent with the Act \6\ and the rules and regulations thereunder and, in particular, the requirements of Section 6(b) of the Act.\7\ Specifically, the Exchange believes the proposed rule change is consistent with Section 6(b)(5) of the Act,\8\ which requires that the rules of an exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, 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. The Exchange believes that extension of the Pilot Program will result in a continuing benefit to investors, by allowing them additional means to manage their risk exposures and carry out their investment objectives, and will allow the Exchange to further study investor interest in Short Term Option Series. \6\ 15 U.S.C. 78s(b)(1).
    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    B. SelfRegulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
    C. SelfRegulatory 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 proposed rule change.
    III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

    The Exchange has designated the proposed rule change as one that: (1) Does not significantly affect the protection of investors or the public interest; (2) does not impose any significant burden on competition; and (3) does not become operative for 30 days from the date of filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. Therefore, the foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act \9\ and subparagraph (f)(6) of Rule 19b 4 thereunder.\10\
    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b4(f)(6). In addition, Rule 19b4(f)(6)(iii) requires a selfregulatory 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 fulfilled this requirement.

    The Exchange has asked the Commission to waive the operative delay to permit the proposed rule change to become operative prior to the 30th day after filing. The Commission has determined that waiving the 30day operative delay of the Exchange's proposal is consistent with the protection of investors and the public interest and will promote competition because such waiver will allow CBOE to continue the existing Pilot Program without interruption.\11\ Therefore, the Commission designates the proposal operative upon filing.
    \11\ For purposes only of waiving the 30day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f).

    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 email to rulecomments@sec.gov. Please include File No. SRCBOE200870 on the subject line.
    Paper Comments
  • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 205491090. All submissions should refer to File Number SRCBOE200870. This file number should be included on the subject line if email 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 No. SRCBOE200870 and should be submitted on or before August 1, 2008.

    For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\12\
    \12\ 17 CFR 200.303(a)(12).
    Florence E. Harmon,
    Acting Secretary.
    [FR Doc. E815758 Filed 71008; 8:45 am]
    BILLING CODE 801001P


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