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44892 Federal Register / Vol. 72, No.

153 / Thursday, August 9, 2007 / Notices

The orders routed as a result of an change is consistent with the Act. SECURITIES AND EXCHANGE
NMS Cross Order will be added to the Comments may be submitted by any of COMMISSION
Exchange’s other order routing products the following methods:
[Release No. 34–56190; File No. SR–CBOE–
and will be charged at a rate of $0.0020
Electronic Comments 2007–04]
per share if a firm uses its own give-up
on another market center and $0.0060 • Use the Commission’s Internet Self-Regulatory Organizations;
per share if a firm used a BeX provided comment form (http://www.sec.gov/ Chicago Board Options Exchange,
give-up on another market center. rules/sro.shtml); or Incorporated; Notice of Filing of a
2. Statutory Basis • Send an e-mail to rule- Proposed Rule Change and
comments@sec.gov. Please include File Amendment No. 1 Thereto Amending
The Exchange believes that the
Number SR–BSE–2007–32 on the Its Obvious Error Rule for Equity
proposed rule change is consistent with
subject line. Options
the requirements of section 6(b) of the
Act,10 in general, and furthers the Paper Comments August 2, 2007.
objectives of section 6(b)(4) of the Act,11 Pursuant to section 19(b)(1) of the
in particular, in that it is designed to • Send paper comments in triplicate
to Nancy M. Morris, Secretary, Securities Exchange Act of 1934
provide for the equitable allocation of (‘‘Act’’),1 and Rule 19b–4 thereunder,2
reasonable dues, fees and other charges Securities and Exchange Commission,
Station Place, 100 F Street, NE., notice is hereby given that on February
among Exchange members and issuers 21, 2007, the Chicago Board Options
and other persons using Exchange Washington, DC 20549–1090.
Exchange, Incorporated (‘‘CBOE’’ or
facilities. All submissions should refer to File ‘‘Exchange’’) filed with the Securities
Number SR–BSE–2007–32. This file and Exchange Commission
B. Self-Regulatory Organization’s
number should be included on the (‘‘Commission’’) the proposed rule
Statement on Burden on Competition
subject line if e-mail is used. To help the change as described in Items I, II, and
The Exchange does not believe that Commission process and review your III below, which Items have been
the proposed rule change will impose comments more efficiently, please use substantially prepared by the Exchange.
any burden on competition that is not only one method. The Commission will On July 2, 2007, the CBOE submitted
necessary or appropriate in furtherance post all comments on the Commission’s Amendment No. 1 to the proposed rule
of the purposes of the Act. Internet Web site (http://www.sec.gov/ change.3 The Commission is publishing
C. Self-Regulatory Organization’s rules/sro.shtml). Copies of the this notice to solicit comments on the
Statement on Comments on the submission, all subsequent proposed rule change, as amended, from
Proposed Rule Change Received From amendments, all written statements interested persons.
Members, Participants, or Others with respect to the proposed rule
change that are filed with the I. Self-Regulatory Organization’s
The Exchange has neither solicited Commission, and all written Statement of the Terms of Substance of
nor received comments on the proposed the Proposed Rule Change
communications relating to the
rule change.
proposed rule change between the The Exchange proposes to amend
III. Date of Effectiveness of the Commission and any person, other than CBOE Rule 6.25, which is the
Proposed Rule Change and Timing for those that may be withheld from the Exchange’s rule applicable to the
Commission Action public in accordance with the nullification and adjustment of
The foregoing proposed rule change provisions of 5 U.S.C. 552, will be transactions in equity options, to revise
has been designated as a fee change available for inspection and copying in its obvious error provision related to
pursuant to section 19(b)(3)(A)(ii) of the the Commission’s Public Reference ‘‘no bid’’ series. The Exchange is also
Act 12 and Rule 19b–4(f)(2) Room, 100 F Street, NE., Washington, proposing to make a non-substantive
thereunder,13 because it establishes or DC 20549, on official business days change by adding a cross-reference
changes a due, fee, or other charge between the hours of 10 a.m. and 3 p.m. within the text of Rule 6.25.
imposed by the Exchange. Accordingly, Copies of such filing also will be Below is the text of the proposed rule
the proposal will take effect upon filing available for inspection and copying at change. Proposed new language is in
with the Commission. the principal office of the BSE. All italics and proposed deletions are in
At any time within 60 days of the comments received will be posted [brackets].
filing of the proposed rule change the without change; the Commission does Chicago Board Options Exchange,
Commission may summarily abrogate not edit personal identifying Incorporated Rules
such rule change if it appears to the information from submissions. You
Commission that such action is should submit only information that Rule 6.25—Nullification and
necessary or appropriate in the public you wish to make available publicly. All Adjustment of Equity Options
interest, for the protection of investors, submissions should refer to File Transactions
or otherwise in furtherance of the Number SR–BSE–2007–32 and should RULE 6.25. This Rule governs the
purposes of the Act. be submitted on or before August 30, nullification and adjustment of
2007. transactions involving equity options.
IV. Solicitation of Comments
For the Commission, by the Division of Rule 24.16 governs the nullification and
Interested persons are invited to Market Regulation, pursuant to delegated adjustment of transactions involving
submit written data, views, and authority.14 index options and options on ETFs and
arguments concerning the foregoing, HOLDRs. Paragraphs (a)(1), [and] (2)
mstockstill on PROD1PC66 with NOTICES

Florence E. Harmon,
including whether the proposed rule Deputy Secretary.
1 15 U.S.C. 78s(b)(1).
10 15
[FR Doc. E7–15545 Filed 8–8–07; 8:45 am]
U.S.C. 78f(b). 2 17 CFR 240.19b–4.
11 15 U.S.C. 78f(b)(4). BILLING CODE 8010–01–P
3 Amendment No. 1 supersedes and replaces the
12 15 U.S.C. 78s(b)(3)(A)(ii).
original filing in its entirety. The substance of
13 17 CFR 240.19b–4(f)(2). 14 17 CFR 200.30–3(a)(12). Amendment No. 1 is incorporated into this notice.

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Federal Register / Vol. 72, No. 153 / Thursday, August 9, 2007 / Notices 44893

and (5) of this Rule have no (for puts) in the same options class was the no bid provision is intended to
applicability to trades executed in open quoted no bid at the time of execution. apply.
outcry. Under the revised Rule, additional The Exchange is also proposing to
(a) Trades Subject to Review criteria and clarifying language would make a revision to the introductory
A member or person associated with be added. Specifically, an electronic language in Rule 6.25 in order to cross
a member may have a trade adjusted or transaction in a series quoted no bid on reference paragraph (a)(5), which
nullified if, in addition to satisfying the the Exchange would be subject to pertains to erroneous trades resulting
procedural requirements of paragraph nullification provided: (i) The bid in from an erroneous quote in the
(b) below, one of the following that series immediately preceding the underlying, as one of the three obvious
conditions is satisfied: execution was, and for five (5) seconds error provisions that have no
(1) No change. prior to the execution remained, zero; applicability to trades executed in open
(2) No Bid Series. Electronic and (ii) at least one strike price below outcry.5 The Exchange is proposing to
transactions in series quoted no bid on (for calls) or above (for puts) in the same include the cross-reference in the
the Exchange will be nullified provided: options class was quoted no bid at the introductory language in Rule 6.25 for
(i) The bid in that series immediately time of execution. Thus, for example, if consistency and completeness. The
preceding the execution was, and for a trade occurs in the ABC 45 call option Exchange asserts that this proposed
five seconds prior to the execution series when the series was quoted change is non-substantive because the
remained, zero; and $0.00–$0.10, the trade may be nullified text of paragraph (a)(5) already
(ii) at least one strike price below (for if: (i) The bid was at $0.00 for at least explicitly provides that the provision is
calls) or above (for puts) in the same five (5) seconds prior to the execution; not applicable to trades executed in
options class was quoted no bid at the and (ii) at least one call option series in open outcry.
time of execution. ABC with a strike below 45 (e.g., the
ABC 30, 35 or 40 call option series) had 2. Statutory Basis
For purposes of subparagraphs
(a)(2)(i) and (a)(2)(ii), bids and offers of a bid of $0.00 at the time of execution. The Exchange believes the proposed
the parties to the subject trade that are The revised no bid provision would rule change is consistent with section
in any of the series in the same options also provide that, when determining the 6(b) of the Act,6 in general, and furthers
class shall not be considered. In Exchange’s quotes in the relevant series the objectives of section 6(b)(5) of the
addition, each group of series in an for purposes of (i) and (ii) above, bids Act,7 in particular, in that it is designed
options class with a non-standard and offers of the parties to the subject to promote just and equitable principles
deliverable will be treated as a separate trade that are in any of the series in the of trade, prevent fraudulent and
options class. same options class shall not be manipulative acts, remove impediments
(3)–(5) No change. considered. The revised rule would also to and perfect the mechanism of a free
(b)–(e) No change. provide that each group of series in an and open market and a national market
* * * Interpretations and Policies: options class with a non-standard system, and, in general, to protect
.01–.03 No change. deliverable will be treated as a separate investors and the public interest.
options class. Thus, for example, if due
II. Self-Regulatory Organization’s to a reorganization, certain of the series B. Self-Regulatory Organization’s
Statement of the Purpose of, and in the ABC option class have a Statement on Burden on Competition
Statutory Basis for, the Proposed Rule deliverable of 150 shares per options The Exchange does not believe that
Change contract (as compared to the standard the proposed rule change will impose
In its filing with the Commission, the 100 shares per option contract), all ABC any burden on competition not
Exchange included statements option series that are subject to the 150 necessary or appropriate in furtherance
concerning the purpose of and basis for contract delivery requirements would be of the purposes of the Act.
the proposed rule change and discussed considered separately from the ABC
option series that are subject to the 100 C. Self-Regulatory Organization’s
any comments it received on the Statement on Comments on the
proposed rule change. The text of these contract delivery requirements for
purposes of applying the no bid Proposed Rule Change Received From
statements may be examined at the Members, Participants or Others
places specified in Item IV below. The provision. Finally, the revised Rule
Exchange has prepared summaries, set would clarify that the no bid provision No written comments were solicited
forth in sections A, B, and C below, of is intended to apply to series quoted no or received by the Exchange with
the most significant aspects of such bid on the Exchange (as opposed to respect to the proposed rule change.
statements. series for which the national best bid is III. Date of Effectiveness of the
quoted no bid).4 Proposed Rule Change and Timing for
A. Self-Regulatory Organization’s The Exchange states that the proposed
Statement of the Purpose of, and Commission Action
changes to the no bid provision are
Statutory Basis for, the Proposed Rule intended to address the Exchange’s Within 35 days of the date of
Change experience in applying the provision to publication of this notice in the Federal
particular trading scenarios that have Register or within such longer period (i)
1. Purpose
occurred. The Exchange believes that as the Commission may designate up to
The Exchange is proposing to amend the additional criteria and clarifications 90 days of such date if it finds such
Rule 6.25, which is its obvious error are reasonable and objective, and would longer period to be appropriate and
rule pertaining to equity options, in serve to better identify instances where publishes its reasons for so finding, or
order to modify the nullification
mstockstill on PROD1PC66 with NOTICES

provisions for no bid series. Currently, 4 Consistent with the existing provisions, for a 5 The other two obvious error provisions that

the Rule simply provides that electronic nullification to be granted, any member or person have no applicability to trades executed in open
associated with a member that believes it outcry pertain to obvious price errors and no bid
transactions in series that are quoted no series. See introductory language to Rule 6.25 and
participated in a transaction that falls within the no
bid on the Exchange are subject to bid series parameters must also satisfy the paragraphs (a)(1) and (2) thereunder.
nullification provided that at least one notification procedures set forth in paragraph (b) of 6 15 U.S.C. 78f(b).

strike price below (for calls) or above Rule 6.25. 7 15 U.S.C. 78f(b)(5).

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44894 Federal Register / Vol. 72, No. 153 / Thursday, August 9, 2007 / Notices

(ii) as to which the Exchange consents, be submitted on or before August 30, options have no position and exercise
the Commission will: 2007. limits similarly have no position and
A. By order approve the proposed rule For the Commission, by the Division of exercise limits. In addition, the
change or; Market Regulation, pursuant to delegated Exchange proposes to make technical
B. Institute proceedings to determine authority.8 changes to Rules 24.4, 24.5, and 24A.7.
whether the proposed rule change Florence E. Harmon, The text of the proposed rule change is
should be disapproved. available on CBOE’s Web site (http://
Deputy Secretary.
IV. Solicitation of Comments [FR Doc. E7–15543 Filed 8–8–07; 8:45 am]
www.cboe.org/legal), at CBOE, and at
the Commission’s Public Reference
Interested persons are invited to BILLING CODE 8010–01–P
Room.
submit written data, views, and
arguments concerning the foregoing, II. Self-Regulatory Organization’s
including whether the proposed rule SECURITIES AND EXCHANGE Statement of the Purpose of, and
change is consistent with the Act. COMMISSION Statutory Basis for, the Proposed Rule
Comments may be submitted by any of [Release No. 34–56191; File No. SR–CBOE– Change
the following methods: 2007–79] In its filing with the Commission, the
Electronic Comments Exchange included statements
Self-Regulatory Organizations; concerning the purpose of and basis for
• Use the Commission’s Internet Chicago Board Options Exchange, the proposed rule change and discussed
comment form (http://www.sec.gov/ Incorporated; Notice of Filing of any comments it received on the
rules/sro.shtml); or Proposed Rule Change and proposed rule change. The text of these
• Send an e-mail to rule- Amendment No. 1 Thereto To Eliminate statements may be examined at the
comments@sec.gov. Please include File Position and Exercise Limits for places specified in Item IV below. The
Number SR–CBOE–2007–04 on the Options on the Russell 2000 Index, and Exchange has prepared summaries, set
subject line. To Specify That Reduced-Value forth in sections A, B, and C below, of
Paper Comments Options on Broad-Based Security the most significant aspects of such
Indexes for Which Full-Value Options statements.
• Send paper comments in triplicate Have No Position and Exercise Limits
to Nancy M. Morris, Secretary, Similarly Have No Position and A. Self-Regulatory Organization’s
Securities and Exchange Commission, Exercise Limits Statement of the Purpose of, and
100 F Street, NE., Washington, DC Statutory Basis for, the Proposed Rule
20549–1090. August 2, 2007. Change
All submissions should refer to File Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 1. Purpose
Number SR–CBOE–2007–04. This file
number should be included on the (‘‘Act’’) 11and Rule 19b–4 thereunder,2 The Exchange proposes to eliminate
subject line if e-mail is used. To help the notice is hereby given that on July 17, position and exercise limits for options
Commission process and review your 2007, the Chicago Board Options on RUT, a broad-based securities index
comments more efficiently, please use Exchange, Incorporated (‘‘CBOE’’ or that is multiply-listed and heavily
only one method. The Commission will ‘‘Exchange’’) filed with the Securities traded.4 The Exchange also proposes to
post all comments on the Commission’s and Exchange Commission amend Rules 24.4(a) and 24.5 to specify
Internet Web site (http://www.sec.gov/ (‘‘Commission’’) the proposed rule that reduced-value options on broad-
rules/sro.shtml). Copies of the change as described in Items I, II, and based security indexes for which full-
submission, all subsequent III below, which Items have been value options have no position and
amendments, all written statements substantially prepared by CBOE. On exercise limits similarly have no
with respect to the proposed rule August 2, 2007, the Exchange filed position and exercise limits. In addition,
change that are filed with the Amendment No. 1 to the proposed rule the Exchange proposes to make
Commission, and all written change.3 The Commission is publishing technical changes to Rules 24.4, 24.5,
communications relating to the this notice to solicit comments on the and 24A.7 to specify that there are no
proposed rule change between the proposed rule change, as amended, from position and exercise limits for
Commission and any person, other than interested persons. European-Style Exercise S&P 100 Index
those that may be withheld from the options (‘‘XEO’’) and to add ‘‘XEO’’ to
I. Self-Regulatory Organization’s the position reporting and margin rules.
public in accordance with the Statement of the Terms of Substance of
provisions of 5 U.S.C. 552, will be the Proposed Rule Change Eliminate Position and Exercise Limits
available for inspection and copying in for RUT Options
the Commission’s Public Reference The Exchange proposes to eliminate
Room, 100 F Street, NE., Washington, position and exercise limits for options The Exchange believes that the
DC 20549, on official business days on the Russell 2000 Index (‘‘RUT’’), a circumstances and considerations relied
between the hours of 10 a.m. and 3 p.m. broad-based securities index that is
4 The current position and exercise limits for RUT
Copies of such filing also will be multiply-listed and heavily traded. The
options are 50,000 contracts, with no more than
available for inspection and copying at Exchange also proposes to amend CBOE 30,000 of such contracts in a series in the nearest
the principal office of the Exchange. All Rules 24.4(a) and 24.5 to specify that expiration month, were established almost 15 years
comments received will be posted reduced-value options on broad-based ago when the Commission approved the rule
security indexes for which full-value change that provided for the listing and trading of
without change; the Commission does RUT options and have since remained unchanged.
mstockstill on PROD1PC66 with NOTICES

not edit personal identifying See Securities Exchange Act Release No. 31382
8 17 CFR 200.30–3(a)(12).
information from submissions. You 1 15
(October 30, 1992), 57 FR 52802 (November 5, 1992)
U.S.C. 78s(b)(1). (SR–CBOE–1992–02). See also Rule 24.4, Position
should submit only information that 2 17 CFR 240.19b–4.
Limits for Broad-Based Index Options, and Rule
you wish to make available publicly. All 3 In Amendment No. 1, the Exchange made minor 24.5, Exercise Limits, (providing that exercise limits
submissions should refer to File corrections to the rule text and purpose section of for index option contracts are equivalent to
Number SR–CBOE–2007–04 and should the proposed rule change. prescribed position limits).

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