

[Federal Register: December 26, 2007 (Volume 72, Number 246)]
[Notices]               
[Page 73052-73053]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26de07-109]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56977; File No. SR-CBOE-2007-148]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend its Equity Options Obvious Error Rule

December 18, 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 December 14, 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 Exchange. CBOE has designated this proposal as one 
concerned solely with the administration of the Exchange under section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(3) 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)(iii).
    \4\ 17 CFR 240.19b-4(f)(2).
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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 Rule 6.25, which is the 
Exchange's rule applicable to the nullification and adjustment of 
equity options transactions. The text of the proposed rule change is 
available at the Exchange, the Commission's Public Reference Room, and 
http://www.cboe.com.


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 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. CBOE has substantially 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
    Under CBOE's equity obvious error rule, an Obvious Error Panel may 
be formed to review decisions made by Trading Officials under the rule. 
The Obvious Error Panel is currently comprised of at least one Trading 
Floor Liaison (``TFL'') staff member and four Exchange members. The 
purpose of the proposed rule change is to replace the reference to the 
``TFL'' staff with a reference to the ``Exchange's staff designated to 
perform Obvious Error Panel functions.'' The Exchange is proposing to 
make this change because it recently determined to reassign the Obvious 
Error Panel function from the CBOE TFL group to a group of designated 
Exchange personnel within CBOE's market control center. In trying to 
accommodate the reassignment of these particular TFL functions, the 
Exchange believes a better approach than specifically referencing a 
particular Exchange staff group is to reference the ``Exchange's staff 
designated to perform'' the particular function. In this way, the 
Exchange will have the flexibility to delegate the authorities under 
the obvious error rules to the appropriate Exchange staff and will not 
have to make a rule change merely, for instance, to accommodate a 
future change in the title of a staff group or to accommodate the 
reassignment of the authority to another staff group. The Exchange 
believes that because the authority exercised by Exchange staff is 
delegated pursuant to Exchange rules, the title of the particular group 
exercising their authority should not be relevant.\5\
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    \5\ The Exchange recently made a similar change when it deleted 
specific references to TFLs in its obvious error rules in order to 
accommodate the reassignment of Trading Official functions under the 
rules from the TFL group to a group of designated Exchange personnel 
within CBOE's market control center. See Securities Exchange Act 
Release No. 56494 (September 21, 2007), 72 FR 55264 (September 28, 
2007) (SR-CBOE-2007-110). Under the revised rules, ``Trading 
Officials'' now means two Exchange members designated as Floor 
Officials and one member of the Exchange's staff designated to 
perform Trading Official functions. See CBOE Rules 6.25, Commentary 
02 and 24.16, Commentary 02.

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[[Page 73053]]

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act \6\ in general, and furthers the 
objectives of section 6(b)(5) of the Act \7\ in particular, in that it 
is designed to promote just and equitable principles of trade, foster 
cooperation among persons engaged in facilitating securities 
transactions, and protect investors and the public interest. The 
Exchange believes that this proposal complies with the Act because the 
Exchange is amending its rules to update and/or generalize references 
to certain Exchange staff in order to facilitate compliance.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange 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 with respect 
to the proposed rule change.

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

    The foregoing proposed rule change has been designated as concerned 
solely with the administration of the Exchange pursuant to section 
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(3) \9\ thereunder. 
Accordingly, the proposal will take effect upon filing with the 
Commission. At any time within 60 days of the filing of such proposed 
rule change, the Commission may summarily abrogate such proposed 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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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(3).
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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 rule-comments@sec.gov. Please include 

File Number SR-CBOE-2007-148 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-2007-148. 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, 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 Number SR-CBOE-2007-148 and should be 
submitted on or before January 16, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-24890 Filed 12-21-07; 8:45 am]

BILLING CODE 8011-01-P
