
[Federal Register: April 4, 2008 (Volume 73, Number 66)]
[Notices]               
[Page 18596-18598]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04ap08-120]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57582; File No. SR-CBOE-2008-34]

 
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 Certain Option 
Classes

March 31, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or ``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on March 26, 2008, the Chicago Board Options 
Exchange, Incorporated (``CBOE'' or ``Exchange'') filed with the 
Securities and Exchange Commission (``Commission'' or ``SEC'') the 
proposed rule change as described in Items I, II, and III below, which 
Items have been prepared by the CBOE. The Exchange has designated this 
proposal as one

[[Page 18597]]

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

    The Exchange proposes to increase the class quoting limit in five 
option classes. The text of the proposed rule change is available on 
CBOE's Web site (http://www.cboe.org/legal), 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, 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 parts 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 or Hybrid 2.0 
Platform.\5\ A CQL is the maximum number of quoters that may quote 
electronically in a given product and Rule 8.3A, Interpretation .01(a) 
provides that the current levels are generally established at 50.
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    \5\ See Rule 8.3A.01.
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    In addition, Rule 8.3A, Interpretation .01(b) provides a procedure 
by which the President of the Exchange may increase the CQL for an 
existing or new product.\6\ 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.''\7\ 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\ The Exchange has increased the CQLs above 50 for certain 
classes. For example, Apple Inc. (AAPL) is at 60, Research in Motion 
(RIMM) is at 60, and Goldman Sachs Group Inc. (GS) is at 60. See 
Securities Exchange Act Release Nos. 55664 (April 24, 2007), 72 FR 
23867 (May 1, 2007) (SR-CBOE-2007-36) and 56772 (November 8, 2007), 
72 FR 64261 (November 15, 2007) (SR-CBOE-2007-126).
    \7\ ``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(b).
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     Bear Stearns (BSC) from its current limit of 50 to 60;
     Dryships, Inc. (DRYS) from its current limit of 50 to 65;
     Lehman Brothers (LEH) from its current limit of 50 to 60;
     Petro Bras SA (PBR) from its current limit of 50 to 60; 
and
     Visa, Inc. (V) from its current limit of 50 to 60.\8\
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    \8\ Options on Visa, Inc. (V) will be listed on the Exchange 
beginning approximately March 28, 2008.
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    The trading volume in these classes recently has increased 
substantially or is expected to increase. In addition, increasing these 
CQLs to 60 (or 65 in the case of DRYS) will accommodate Market-Makers 
that are currently on the wait-list to be appointed to the option 
classes. Increasing the CQLs in these options will enable the Exchange 
to enhance the liquidity offered, thereby offering deeper and more 
liquid markets. Lastly, CBOE represents that it has the systems 
capacity to support this increase in the CQLs.
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.\9\ Specifically, the Exchange believes the 
proposed rule change is consistent with the Section 6(b)(5) \10\ 
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. As indicated above, the Exchange believes that increasing the 
CQL in these options will enable the Exchange to enhance the liquidity 
offered, thereby offering deeper and more liquid markets.
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    \9\ 15 U.S.C. 78(f)(b).
    \10\ 15 U.S.C. 78(f)(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 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 \11\ 
and Rule 19b-4(f)(1) thereunder,\12\ 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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    \11\ 15 U.S.C. 78s(b)(3)(A)(i).
    \12\ 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-2008-34 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-2008-34. This file

[[Page 18598]]

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, 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 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-2008-34 and should be submitted on or before April 25, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-7028 Filed 4-3-08; 8:45 am]

BILLING CODE 8011-01-P
