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Federal Register / Vol. 73, No.

35 / Thursday, February 21, 2008 / Notices 9607

SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s contracts. Subparagraphs (i) through (iv)
COMMISSION Statement of the Purpose of, and of Ch. IV, Sec. 3(b) of the BOX Rules
Statutory Basis for, the Proposed Rule further set forth minimum requirements
[Release No. 34–57324; File No. SR–BSE– Change for an underlying security such as
2008–07] 1. Purpose shares outstanding, number of holders
and trading volume.
Self-Regulatory Organizations; Boston The purpose of this proposed rule Under this proposed rule change, an
Stock Exchange, Inc.; Notice of Filing change is to revise the Exchange’s option may be multiply-listed and
options listing standards so that as long traded as long as one other options
and Order Granting Accelerated
as the options maintenance listing exchange is trading the particular option
Approval of a Proposed Rule Change
standards as set forth in Ch. IV, Sec. 4 and such underlying security of the
To List and Trade Options Already
of the BOX Rules are met and the option option meets the Exchange’s continued
Listed on Another National Securities
is listed and traded on another national listing requirements. The BSE notes that
Exchange
securities exchange, the Exchange will the requirements for listing additional
February 13, 2008. be able to list and trade the option. Ch. series of an existing listed option (i.e.,
IV, Sec. 3(b) of the BOX Rules sets forth continued listing guidelines) are less
Pursuant to Section 19(b)(1) of the the requirements that an underlying
Securities Exchange Act of 1934 stringent, largely because, in total, the
equity security must meet before the Exchange’s guidelines assure that
(‘‘Act’’)1 and Rule 19b–4 thereunder,2 Exchange may initially list options on
notice is hereby given that on January options will be listed and traded on
that security. The BSE notes that the securities of companies that are
28, 2008, the Boston Stock Exchange requirements that an underlying equity
(‘‘BSE’’ or ‘‘Exchange’’) filed with the financially sound and subject to
security must meet for initial listing of adequate minimum standards.
Securities and Exchange Commission options on that security are uniform
(‘‘Commission’’) the proposed rule The Exchange believes that although
among all the options exchanges. the continued listing requirements are
change as described in Items I and II BOX Rule Ch. IV, Sec. 3(b)(v) applies
below, which Items have been prepared uniform among the other options
to the listing of individual equity exchanges, the application of both the
by the Exchange. This order provides options on both ‘‘covered’’ and
notice of the proposal and approves the original and continued listing standard
‘‘uncovered’’ underlying securities, and in the current market environment have
proposal on an accelerated basis. sets forth the minimum market price at had an anti-competitive effect.
I. Self-Regulatory Organization’s which an underlying security must Specifically, the Exchange notes that on
Statement of the Terms of Substance of trade for an option to be listed. In the several occasions it has been unable to
the Proposed Rule Change case of an underlying security that is a list and trade options classes that trade
‘‘covered security’’ as defined under elsewhere because the underlying
The Exchange proposes to amend section 18(b)(1)(A) of the Securities Act security of such option did not at that
BOX Rule Ch. IV, Sec. 3(b)(v) to enable of 1933 (‘‘1933 Act’’),3 the closing time meet original listing standards.
it to list and trade equity options that market price of the underlying security However, the other options exchange(s)
are otherwise ineligible for listing and must be at least $3 per share for five may continue to trade such options (and
trading on the Exchange if such options previous consecutive business days list additional series) based on the lower
are listed and traded on another prior to the date on which the Exchange maintenance listing standards, while the
national securities exchange and the submits an option class certification to Exchange is precluded from listing any
security or securities underlying such The Options Clearing Corporation options on such underlying security.
options meet BSE’s continued listing (‘‘OCC’’). In connection with underlying The Exchange believes this is anti-
requirements. securities deemed to be ‘‘uncovered,’’ competitive and inconsistent with the
The text of the proposed rule change BOX rules require that such underlying aims and goals of a national market
is available on BSE’s Web site security be at least $7.50 for the majority system in options.
(http://www.bse.com), at BSE’s principal of business days during the three To address this situation, the
office, and at the Commission’s Public calendar months preceding the date of Exchange proposes to add a new rule to
Reference Room. selection for such listing. In addition, an the BOX Rules and to amend the current
alternative listing procedure for listing requirements. Specifically, the
II. Self-Regulatory Organization’s ‘‘uncovered’’ securities also permits the
Statement of the Purpose of, and proposed addition of Ch. IV, Sec.
listing of such options so long as: (1) 3(b)(vi) of the BOX Rules provides that
Statutory Basis for, the Proposed Rule The underlying security meets the
Change notwithstanding that a particular
guidelines for continued approval underlying security may not meet the
contained in Ch. IV, Sec. 4 of the BOX requirements set forth in Ch. IV, Sec.
In its filing with the Commission, the
Rules; (2) options on such underlying 3(b)(i), (ii), (iv) and (v), the Exchange
Exchange included statements
security are traded on at least one other nonetheless could list and trade an
concerning the purpose of, and basis for,
registered national securities exchange; option on such underlying security if (i)
the proposed rule change and discussed
and (3) the average daily volume the underlying security meets continued
any comments it received on the
(‘‘ADV’’) for such options over the last listing requirements under Ch. IV, Sec.
proposed rule change. The text of these
three calendar months preceding the 4 of the BOX Rules; and (ii) options on
statements may be examined at the
date of selection has been at least 5,000 such underlying security are listed and
places specified in Item III below. The
BSE has prepared summaries, set forth 3 Section 18(b)(1)(A) of the 1933 Act provides that
traded on at least one other registered
in Sections A, B, and C below, of the national securities exchange.4 In
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‘‘[a] security is a covered security if such security


most significant aspects of such is* * *listed, or authorized for listing, on the New
statements. York Stock Exchange or the American Stock 4 Telephone conversation between John Katovich,

Exchange, or listed or authorized for listing on the Executive Vice President and Chief Legal Officer,
National Market System of the Nasdaq Stock Market BSE and Mitra Mehr, Special Counsel, Division of
1 15 U.S.C. 78s(b)(1). (or any successor to such entities)* * *’’ See, 15 Trading and Markets, Commission on February 12,
2 17 CFR 240.19b–4. U.S.C. 77r(b)(1)(A). Continued

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9608 Federal Register / Vol. 73, No. 35 / Thursday, February 21, 2008 / Notices

connection with the proposed changes, Electronic Comments particular, the Commission finds that
the Exchange represents that the • Use the Commission’s Internet the proposed rule change is consistent
procedures currently employed to comment form (http://www.sec.gov/ with Section 6(b)(5) of the Act,8 which
determine whether a particular rules/sro.shtml); or requires that the rules of an exchange be
underlying security meets the initial • Send an e-mail to rule- designed to prevent fraudulent and
listing criteria will similarly be applied comments@sec.gov. Please include File manipulative acts and practices, to
to the continued listing criteria. Number SR–BSE–2008–07 on the promote just and equitable principles of
The Exchange believes that this subject line. trade, to remove impediments to and
proposal is narrowly tailored to address perfect the mechanism of a free and
the circumstances where an options Paper Comments
open market and a national market
class is currently ineligible for listing on • Send paper comments in triplicate system, and, in general, to protect
the Exchange while at the same time, to Nancy M. Morris, Secretary,
investors and the public interest. The
such option is trading on another Securities and Exchange Commission,
proposal is narrowly tailored to address
options exchange(s). The BSE notes that 100 F Street, NE., Washington, DC
20549–1090. the circumstances where an equity
when an underlying security meets the
maintenance listing requirements and at option class is currently ineligible for
All submissions should refer to File
least one other exchange lists and trades initial listing on the Exchange even
Number SR–BSE–2008–07. This file
options on the underlying security, the number should be included on the though it meets the Exchange’s
option is available to the investing subject line if e-mail is used. To help the continued listing standards and is
public. Therefore, the Exchange notes Commission process and review your trading on another options exchange.
that the current proposal will not comments more efficiently, please use Allowing BSE to list and trade options
introduce any inappropriate additional only one method. The Commission will on such underlying securities should
listed options classes. The BSE submits post all comments on the Commission’s help promote competition among the
that the adoption of the proposal is Internet Web site (http://www.sec.gov/ exchanges that list and trade options.
essential for competitive purposes and rules/sro.shtml). Copies of the The Commission notes, and the
to promote a free and open market for submission, all subsequent Exchange represents, that the
the benefit of investors. amendments, all written statements procedures that the Exchange currently
with respect to the proposed rule employs to determine whether a
2. Statutory Basis
change that are filed with the particular underlying security meets the
The Exchange believes that the Commission, and all written initial equity option listing criteria for
proposal is consistent with the communications relating to the the Exchange will similarly be applied
requirements of Section 6(b) of the Act,5 proposed rule change between the when determining whether an
in general, and Section 6(b)(5) of the Commission and any person, other than underlying security meets the
Act,6 in particular, in that it will serve those that may be withheld from the Exchange’s continued listing criteria.
to remove impediments to and perfect public in accordance with the
the mechanisms of a free and open provisions of 5 U.S.C. 552, will be The Commission finds good cause,
market and a national market system available for inspection and copying in pursuant to Section 19(b)(2)(B) of the
and, in general, to protect investors and the Commission’s Public Reference Act,9 for approving the proposed rule
the public interest. Room, 100 F Street, NE., Washington, change prior to the 30th day after the
DC 20549, on official business days publication of the notice of the filing
B. Self-Regulatory Organization’s
Statement on Burden on Competition between the hours of 10 a.m. and 3 p.m. thereof in the Federal Register. The
Copies of such filing also will be Commission notes that the proposed
The Exchange does not believe that available for inspection and copying at rule change is substantially identical to
the proposed rule change will impose the principal office of BSE. All a proposed rule change submitted by the
any burden on competition not comments received will be posted American Stock Exchange LLC,10 which
necessary or appropriate in furtherance without change; the Commission does was previously approved by the
of the purposes of the Act. not edit personal identifying Commission after an opportunity for
C. Self-Regulatory Organization’s information from submissions. You notice and comment, and therefore does
Statement on Comments on the should submit only information that not raise any new regulatory issues.
Proposed Rule Change Received From you wish to make available publicly. All
Members, Participants, or Others submissions should refer to File 8 15 U.S.C. 78f(b)(5).

Number SR–BSE–2008–07 and should 9 15 U.S.C. 78s(b)(2)(B).


The Exchange has neither solicited be submitted on or before March 13, 10 See, Securities Exchange Act Release No. 56598
nor received comments on the proposed 2008. (October 2, 2007), 72 FR 57615 (October 10, 2007)
rule change. (SR–Amex–2007–48) (Order Approving Proposed
IV. Commission’s Findings and Order Rule Change Modifying the Options Listing Criteria
III. Solicitation of Comments Granting Accelerated Approval of the for Underlying Securities). See also, Securities
Exchange Act Release Nos. 56647 (October 11,
Interested persons are invited to Proposed Rule Change 2007), 72 FR 58702 (October 16, 2007) (SR–ISE–
submit written data, views, and After careful consideration, the 2007–80) (Notice of Filing and Order Granting
arguments concerning the foregoing, Accelerated Approval of Proposed Rule Change);
Commission finds that the proposed 56774 (November 8, 2007), 72 FR 64694 (November
including whether the proposed rule rule change is consistent with the 16, 2007) (SR–CBOE–2007–114) (Notice of Filing
change is consistent with the Act. requirements of the Act and the and Order Granting Accelerated Approval of
Comments may be submitted by any of regulations thereunder applicable to a Proposed Rule Change); 56797 (November 15,
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the following methods: 2007), 72 FR 65798 (November 23, 2007) (SR–


national securities exchange.7 In NYSEArca–2007–106) (Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule
2008 to conform this sentence to the text of the 7 In approving this rule change, the Commission Change); and 56717 (October 29, 2007), 72 FR
proposed rule change. notes that it has considered the proposed rule’s 62508 (November 5, 2007) (SR–Phlx–2007–73)
5 15 U.S.C. 78f(b).
impact on efficiency, competition, and capital (Notice of Filing and Order Granting Accelerated
6 15 U.S.C. 78f(b)(5). formation. See 15 U.S.C. 78c(f). Approval of Proposed Rule Change).

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Federal Register / Vol. 73, No. 35 / Thursday, February 21, 2008 / Notices 9609

V. Conclusion in Item IV below. CBOE has prepared the objectives of section 6(b)(5) of the
It is therefore ordered, pursuant to summaries, set forth in Sections A, B, Act,7 in particular, in that it is designed
Section 19(b)(2) of the Act,11 that the and C below, of the most significant to prevent fraudulent and manipulative
proposed rule change (SR–BSE–2008– aspects of such statements. acts and practices, promote just and
07) be, and it hereby is, approved on an A. Self-Regulatory Organization’s equitable principles of trade, remove
accelerated basis. Statement of the Purpose of, and impediments to and perfect the
Statutory Basis for, the Proposed Rule mechanisms of a free and open market
For the Commission, by the Division of
Trading and Markets, pursuant to delegated Change and a national market system, and, in
authority.12 general, protect investors and the public
1. Purpose interest.
Florence E. Harmon,
Deputy Secretary. The Exchange is proposing to amend B. Self-Regulatory Organization’s
[FR Doc. E8–3167 Filed 2–20–08; 8:45 am] its priority provisions contained in Statement on Burden on Competition
CBOE Rules 6.45, 6.45A and 6.45B to
BILLING CODE 8011–01–P
provide that a complex order may be CBOE does not believe that the
executed at a net debit or credit price proposed rule change will impose any
with another member without giving burden on competition not necessary or
SECURITIES AND EXCHANGE appropriate in furtherance of the
COMMISSION priority to equivalent bids (offers) in the
individual series legs that are purposes of the Act.
[Release No. 34–57326; File No. SR–CBOE– represented in the public customer limit
2008–03]
C. Self-Regulatory Organization’s
order book, provided that one leg of the Statement on Comments on the
Self-Regulatory Organizations; complex order betters the corresponding Proposed Rule Change Received From
Chicago Board Options Exchange, bid (offer) in the public customer limit Members, Participants, or Others
Incorporated; Notice of Filing of order book by at least the amount
No written comments were either
Proposed Rule Change Relating to determined by the Exchange on a class-
solicited or received with respect to the
Complex Orders by-class basis. The amount shall be
proposed rule change.
either (i) one minimum trading
Feburary 13, 2008. increment (i.e., $0.10, $0.05 or $0.01, as III. Date of Effectiveness of the
Pursuant to section 19(b)(1) of the applicable) or (ii) a $0.01 increment.3 Proposed Rule Change and Timing for
Securities Exchange Act of 1934 Currently the rules provide that one Commission Action
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 leg of a complex order must better the
Within 35 days of the date of
notice is hereby given that on January corresponding bid (offer) in the public
14, 2008, the Chicago Board Options publication of this notice in the Federal
customer limit order book by at least
Exchange, Incorporated (‘‘CBOE’’ or Register or within such longer period (i)
one minimum trading increment.4 The
‘‘Exchange’’) filed with the Securities as the Commission may designate up to
Exchange believes that changing the
and Exchange Commission 90 days of such date if it finds such
rule to permit the minimum amount to
(‘‘Commission’’) a proposed rule change longer period to be appropriate and
be $0.01 would provide additional
as described in Items I, II, and III below, publishes its reasons for so finding or
flexibility to better facilitate the orderly
which Items have been prepared (ii) as to which CBOE consents, the
execution of complex orders, and would
substantially by CBOE. The Commission Commission will:
provide additional opportunities and
is publishing this notice to solicit (A) By order approve such proposed
incentives for members to provide price
comments on the proposed rule change rule change, or
improvement to complex orders.5 (B) Institute proceedings to determine
from interested persons.
2. Statutory Basis whether the proposed rule change
I. Self-Regulatory Organization’s should be disapproved.
The Exchange believes the proposed
Statement of the Terms of Substance of
rule change is consistent with section IV. Solicitation of Comments
the Proposed Rule Change
6(b) of the Act,6 in general, and furthers
The Exchange proposes to amend its Interested persons are invited to
rules regarding complex orders. The text 3 Additionally, the Exchange is proposing to make
submit written data, views, and
of the proposed rule change is available two non-substantive changes to Rule 6.45B(b) in arguments concerning the foregoing,
at CBOE, the Commission’s Public order to conform the text of that rule to Rule including whether the proposed rule
6.45A(b). Specifically, the Exchange is replacing the change is consistent with the Act.
Reference Room, and http:// phrase ‘‘the trading crowd’’ with the phrase ‘‘open
www.cboe.com/legal. outcry’’ in Rule 6.45B(b) and inserting the phrase
Comments may be submitted by any of
‘‘at a net debit or credit price’’ in Rule 6.45B(b)(ii). the following methods:
II. Self-Regulatory Organization’s 4 The rules also provide that a complex order may
Statement of the Purpose of, and be executed at the same derived net price as other
Electronic Comments
Statutory Basis for, the Proposed Rule individual series legs represented in the trading • Use the Commission’s Internet
Change crowd, which for purposes of the complex order
priority provision includes broker-dealer orders
comment form (http://www.sec.gov/
In its filing with the Commission, resting in the electronic book and electronic quotes rules/sro.shtml); or
CBOE included statements concerning of Market-Makers. • Send an e-mail to rule-
the purpose of, and basis for, the 5 Currently, for example, if a complex order
comments@sec.gov. Please include File
spread market is quoted on a net debit/credit basis Number SR–CBOE–2008–03 on the
proposed rule change and discussed any at $0.90 to $1.10 and there are orders represented
comments it received on the proposed in the public customer limit order book in the subject line.
rule change. The text of these statements individual series at each of the respective prices,
Paper Comments
the complex order may only be executed with
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may be examined at the places specified


another member at a net price of $0.95 to $1.05. • Send paper comments in triplicate
Under the proposed revisions, a complex order may
11 Id.
be executed at a net price of $0.91 to $1.09,
to Nancy M. Morris, Secretary,
12 17 CFR 200.30–3(a)(12). permitting price improvement at net prices ranging Securities and Exchange Commission,
1 15 U.S.C. 78s(b)(1). from $0.91–$0.94 and $1.06–$1.09.
2 17 CFR 240.19b–4. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5).

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