

[Federal Register: April 20, 2007 (Volume 72, Number 76)]
[Notices]               
[Page 19997-19998]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20ap07-128]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55637; File No. SR-CBOE-2007-35]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Increase the Class Quoting Limit in Several Option 
Classes

April 16, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on April 10, 2007, the Chicago Board Options Exchange, Incorporated 
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been substantially 
prepared by the CBOE. The Exchange has designated this proposal as one 
constituting a stated policy, practice, or interpretation with respect 
to the meaning, administration, or enforcement of an existing rule 
under Section 19(b)(3)(A)(i) of the Act,\3\ and Rule 19b-4(f)(1) 
thereunder,\4\ which renders the proposal effective upon filing with 
the Commission. 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)(i).
    \4\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CBOE proposes to increase the class quoting limit in several option 
classes. The text of the proposed rule change is available on CBOE's 
Web site (http://www.cboe.com), at the CBOE'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, CBOE 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 CBOE has prepared summaries, set forth in Sections 
A, B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    CBOE Rule 8.3A, Maximum Number of Market Participants Quoting 
Electronically per Product, establishes class quoting limits (``CQLs'') 
for each class traded on the Hybrid Trading System.\5\ A CQL is the 
maximum number of quoters that may quote electronically in a given 
product and the current levels are established from 25-40, depending on 
the trading activity of the particular product.
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    \5\ See Rule 8.3A.01.
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    Rule 8.3A, Interpretation .01(c) provides a procedure by which the 
President of the Exchange may increase the CQL for a particular 
product. In this regard, the President of the Exchange may increase the 
CQL in exceptional circumstances, which are defined in the rule as 
``substantial trading volume, whether actual or expected.'' \6\ The 
effect of an increase in the CQL is procompetitive in that it increases 
the number of market participants that may quote electronically in a 
product. The purpose of this filing is to increase the CQL in the 
following option classes as described below:
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    \6\ ``Any actions taken by the President of the Exchange 
pursuant to this paragraph will be submitted to the SEC in a rule 
filing pursuant to Section 19(b)(3)(A) of the Exchange Act.'' Rule 
8.3A.01(c).

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                                                       Current
                    Option class                         CQL     New CQL
------------------------------------------------------------------------
American Home Mortgage Investment Corp. (AHM).......        25        30
Dendreon Corporation (DNDN).........................        25        40
Imergent Inc. (IIG).................................        25        30
Accredited Home Lenders Holding (LEND)..............        35        45
Novastar Financial, Inc. (NFI)......................        30        40
Neurochem, Inc. (NRMX)..............................        25        35
------------------------------------------------------------------------

    The trading volume in these option classes recently has increased 
substantially. Increasing the CQL in these classes will enable the 
Exchange to enhance the liquidity offered, thereby offering deeper and 
more liquid markets.
2. Statutory Basis
    Accordingly, CBOE 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.\7\ Specifically, the Exchange believes the 
proposed rule change is consistent with the Section 6(b)(5) \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.
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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

[[Page 19998]]

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 received nor solicited written comments on the 
proposal.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing proposed rule change will take effect upon filing 
with the Commission pursuant to Section 19(b)(3)(A)(i) of the Act \9\ 
and Rule 19b-4(f)(1) thereunder,\10\ because it constitutes a stated 
policy, practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(i).
    \10\ 17 CFR 240.19b-4(f)(1).
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    At any time within 60 days of the filing of the 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.

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-2007-35 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2007-35. 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. Copies of such 
filing also will be available for inspection and copying at the 
principal office of the CBOE. 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-2007-35 and should be submitted on or before May 
11, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E7-7554 Filed 4-19-07; 8:45 am]

BILLING CODE 8010-01-P
