
[Federal Register: April 29, 2008 (Volume 73, Number 83)]
[Notices]               
[Page 23280-23281]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29ap08-113]                         

=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57702; File No. SR-CBOE-2008-48]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Regarding the Handling of Odd-lot Orders on the CBOE Stock 
Exchange

April 23, 2008.
    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 22, 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, II, and III below, which Items have been substantially 
prepared by the Exchange. The Exchange has designated this proposal as 
one effecting a change in an existing order-entry or trading system 
pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(5) thereunder,\4\ which renders it 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 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(5).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to change CBOE Stock Exchange (``CBSX'') Rule 
52.8, which governs the handling of odd-lot orders. The text of the 
proposed rule change is available at the Exchange's principal office, 
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. The Exchange 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
    The purpose of this proposed rule change is to revise CBSX Rule 
52.8, which governs the handling of odd-lot orders. Currently, a 
marketable odd-lot order received by CBSX is executed against the best 
price being displayed by CBSX Market-Makers. As proposed, an odd-lot 
order (including the odd-lot portion of a mixed-lot order) received by 
CBSX would be displayed to CBSX Traders for a period of time not to 
exceed one second as determined by CBSX. The exposure would also 
include information regarding the applicable NBBO price for that 
product. Responses to trade against the odd-lot order could be 
submitted only at the applicable NBBO price or better and would have to 
be for the full size of the odd-lot order. The first CBSX Trader to 
respond would trade against the odd-lot order. If no responses are 
received, then the order would trade against the best price being 
displayed by a CBSX Market-Maker. If the odd-lot order has a limit 
price that is not marketable, it would be entered into an odd-lot order 
book, where CBSX Traders may submit orders to trade against resting 
interest. A final feature of the proposal is that odd-lot order senders 
would be able to specify that, if an NBBO execution is not attainable, 
the order should be cancelled. The Exchange believes this new method 
for handling odd-lot orders will result in better executions for odd-
lots orders.

[[Page 23281]]

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Act \5\ in general and furthers the objectives of 
Section 6(b)(5) of the Act \6\ in particular in that, by offering 
opportunities for price improvement for odd-lot orders, it is designed 
to promote just and equitable principles of trade and to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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 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

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    The Exchange has designated this proposal as effecting a change in 
an existing order-entry or trading system that: (i) Does not 
significantly affect the protection of investors or the public 
interest; (ii) does not impose any significant burden on competition; 
and (iii) does not have the effect of limiting the access to or 
availability of the system, thereby qualifying this proposal for filing 
under Section 19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(5) 
thereunder,\8\ which renders the proposal effective upon filing with 
the Commission.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(5).
---------------------------------------------------------------------------

    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 No. SR-CBOE-2008-48 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-2008-48. 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 Commissions 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-2008-48 and should be submitted on 
or before May 20, 2008.
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-9305 Filed 4-28-08; 8:45 am]

BILLING CODE 8010-01-P
