
[Federal Register: May 30, 2008 (Volume 73, Number 105)]
[Notices]               
[Page 31172-31173]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30my08-99]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57865; File No. SR-CBOE-2008-02]

 
Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Order Approving Proposed Rule Change, as Modified by 
Amendment No. 1 Thereto, To Replace References to Certain Committees 
With a Reference to the Exchange

May 23, 2008.

I. Introduction

    On March 17, 2008, the Chicago Board Options Exchange, Incorporated 
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to amend its rules to replace 
references to certain committees with a reference to the ``Exchange.'' 
On April 7, 2008, CBOE submitted Amendment No. 1 to the proposed rule 
change. The proposed rule change was published for comment in the 
Federal Register on April 14, 2008.\3\ The Commission received no 
comments on the proposal. This order approves the proposed rule change, 
as modified by Amendment No. 1.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 57629 (April 7, 
2008), 73 FR 20076 (``Notice'').
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II. Description of the Proposal

    The Exchange proposes to amend CBOE Rules to delete certain 
references to the appropriate Procedure, Floor Officials, appropriate 
Market Performance, Membership, and Product Development Committees, as 
well as certain general references to committees such as the 
``appropriate Exchange committee.'' These references are being replaced 
with a reference to the ``Exchange.''
    The Exchange proposes to make these changes to simplify and 
standardize its delegations of authority with respect to these Exchange 
committees. Under CBOE's organizational structure, Exchange committees 
can derive their authority in one of two ways. In addition to any 
powers and duties specifically granted in CBOE's Constitution or Rules, 
each committee has such other powers and duties as may be delegated to 
it by the Board of Directors (``Board'').\4\ Thus, in some instances 
CBOE's Constitution or Rules specifically reference a particular 
committee or ``appropriate Exchange committee.'' In other instances, 
the Board separately delegates a particular authority to a committee. 
Because the authority exercised by committees may be delegated by the 
Board, the Exchange believes that referencing these committees in the 
rule text is not necessary. Instead, the Exchange believes a better 
approach than making a specific reference to the above-listed 
committees or a general reference to the ``appropriate Exchange 
committee'' in the rule text is to simply reference the ``Exchange.'' 
In this way, the Exchange would have the flexibility to determine who 
would perform the authorities under the CBOE Rules, which might include 
Exchange officials or the Board determining to delegate certain 
authorities to an appropriate Exchange committee.\5\ In addition, 
deleting references to these committees and specifying the ``Exchange'' 
instead would be more efficient from an administrative perspective 
because the Exchange would not have to make a rule change merely, for 
instance, to accommodate a change in the title of a committee or to 
accommodate the reassignment of an authority to another committee.\6\
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    \4\ See Rule 2.1(d).
    \5\ As indicated above, Exchange committees only have 
authorities to the extent specifically granted in CBOE's 
Constitution or Rules or by Board delegation. The Board may also 
exercise authorities of the ``Exchange'' under CBOE's Constitution 
and Rules. In addition, authorities of the ``Exchange'' may be 
performed by other Exchange officials. For example, the Exchange's 
Chief Executive Officer, President or other officials or designees 
may have authorities of the ``Exchange'' as long as it is not 
inconsistent with CBOE's Constitution or Rules or any Board 
directive.
    \6\ See, e.g., Securities Exchange Act Release Nos. 53537 (March 
21, 2006), 71 FR 15778 (March 29, 2006) (SR-CBOE-2006-15) (deleting 
from the CBOE Rules any specific references to the certain named 
committees because the Exchange determined to eliminate these 
committees and reassign their respective authorities to other 
committees and/or to Exchange staff) and 39479 (December 22, 1997), 
62 FR 68326 (December 31, 1997) (SR-CBOE-97-61) (deleting from the 
CBOE Rules any specific references to, and adding ``appropriate'' to 
all references that related to certain named committees).
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    In addition, the Exchange proposes various other amendments to CBOE 
Rules that would accommodate the above-described changes and simplify 
the pertinent rule text. The Exchange has not proposed any revisions to 
its current disciplinary, arbitration or appeals procedures (or related 
Business Conduct, Arbitration and Appeals Committees) as part of the 
proposed rule change.\7\
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    \7\ The Commission notes that CBOE's committees relating to 
disciplinary, arbitration, and appeals matters and procedures are 
specifically defined in the CBOE Rules; any amendments to the rules 
relating to such committees and procedures would require CBOE to 
file a proposed rule change under Section 19(b) of the Act. 15 U.S.C 
78s(b).
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\8\ In 
particular, the Commission finds that the proposal is consistent with 
Section 6(b)(1) of the Act,\9\ which requires that an exchange be so 
organized and have the capacity to be able to carry out the purposes of 
the Act and to comply, and to enforce compliance by its members and 
persons associated with its members, with the Act, the rules and 
regulations thereunder, and the rules of the exchange. In addition, the 
Commission finds that the proposal is consistent with Section 6(b)(5) 
of the Act,\10\ in that it is designed to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, to remove 
impediments to and perfect the mechanism of a free and open market

[[Page 31173]]

and a national market system, and, in general, to protect investors and 
the public interest.
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    \8\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78f(b)(1).
    \10\ 15 U.S.C. 78f(b)(5).
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    The Commission notes that the proposed rule change is designed to 
simplify and standardize delegations of authority under the CBOE Rules. 
The Commission notes that, under the proposed rule change, the Exchange 
would have the flexibility to delegate authorities under its rules to 
Exchange staff or an Exchange committee, as appropriate, which could 
foster greater efficiency from an administrative perspective. The 
Commission further notes that the Exchange has not proposed any 
revisions to its current disciplinary, arbitration or appeals 
procedures (or related Business Conduct, Arbitration and Appeals 
Committees) as part of the proposed rule change. The Commission 
believes that CBOE's proposal is consistent with the requirements of 
the Act.

III. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-CBOE-2008-02) is hereby 
approved.
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    \11\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-12076 Filed 5-29-08; 8:45 am]

BILLING CODE 8010-01-P
