Notice: Investment Company Act of 1940

65784 Federal Register / Vol. 72, No.
225 / Friday, November 23, 2007 / Notices
Market-Maker (like the FLEX Appointed minor changes to the overall proposal, Number SR–CBOE–2006–99 and should
Market-Maker) must submit a FLEX which was subject to a notice-and- be submitted on or before December 14,
Quote if called upon by a FLEX Official, comment period. Because no comments 2007.
including when no FLEX Quotes are were received, the Commission believes
V. Conclusion
submitted in response to a specific that good cause exists to grant
RFQ.69 FLEX Appointed Market-Makers accelerated approval and thereby allow It is therefore ordered, pursuant to
may be awarded a participation the Exchange to implement the proposal section 19(b)(2) of the Act,71 that the
entitlement, noted above. Both FLEX without further delay. proposed rule change (SR–CBOE–2006–
Market-Makers qualify for the market- 99), as amended, is approved.
IV. Solicitation of Comments
maker exception to section 11(a) of the For the Commission, by the Division of
Act. Interested persons are invited to Trading and Markets, pursuant to delegated
submit written data, views, and authority.72
C. Position and Exercise Limits arguments concerning Amendment Nos. Florence E. Harmon,
The Commission believes that the 2 and 3, including whether it is Deputy Secretary.
proposed position and exercise limits in consistent with the Act. Comments may [FR Doc. E7–22779 Filed 11–21–07; 8:45 am]
FLEX Options are reasonable and be submitted by any of the following
BILLING CODE 8011–01–P
consistent with the Act. They appear methods:
reasonably designed to prevent a Electronic Comments
member from establishing an imprudent SECURITIES AND EXCHANGE
position in FLEX Options. Moreover, • Use the Commission’s Internet
COMMISSION
the Commission believes that these comment form (http://www.sec.gov/
rules are reasonably designed to prevent rules/sro.shtml); or [Release No. 34–56801; File No. SR-CBOE–
a FLEX Trader from using FLEX Options • Send an e-mail to rule- 2007–125]
to evade the position limits applicable comments@sec.gov. Please include File
Number SR–CBOE–2006–99 on the Self-Regulatory Organizations;
to comparable Non-FLEX Options. In Chicago Board Options Exchange,
view of the explicit standards for subject line.
Incorporated; Notice of Filing of
position and exercise limits set forth in Paper Comments Proposed Rule Change and
Rules 24A.7, 24A.8, 24B.7, and 24B.8, • Send paper comments in triplicate Amendment No. 2 Thereto Relating to
the Commission believes it is reasonable to Nancy M. Morris, Secretary, the $1 Strike Pilot Program
to relieve the Exchange of the obligation Securities and Exchange Commission,
to propose new position and exercise November 16, 2007.
100 F Street, NE., Washington, DC
limits for FLEX Options whenever it 20549–1090. Pursuant to section 19(b)(1) of the
lists and trades a comparable non-FLEX Securities Exchange Act of 1934
All submissions should refer to File
product. (‘‘Act’’) 1 and Rule 19b-4 thereunder, 2
Number SR–CBOE–2006–99. This file
notice is hereby given that on October
D. Sponsored Access number should be included on the
31, 2007, the Chicago Board Options
The Commission believes that the subject line if e-mail is used. To help the
Exchange, Incorporated (‘‘CBOE’’ or
proposed sponsored access provisions Commission process and review your
‘‘Exchange’’) filed with the Securities
are reasonable and consistent with the comments more efficiently, please use
and Exchange Commission
Act. The Commission notes that these only one method. The Commission will
(‘‘Commission’’) the proposed rule
provisions are substantially similar to post all comments on the Commission’s
change as described in Items I, II, and
those of another exchange, which Internet Web site (http://www.sec.gov/
III below, which Items have been
previously were approved by the rules/sro.shtml). Copies of the
substantially prepared by the Exchange.
Commission.70 The Exchange has submission, all subsequent
On November 14, 2007, the Exchange
proposed to offer sponsored access only amendments, all written statements
filed Amendment No. 1 to the proposed
to the new FLEX Hybrid Trading with respect to the proposed rule
rule change. The Exchange subsequently
System, not to open-outcry FLEX change that are filed with the
withdrew Amendment No. 1 and filed
trading or to other Exchange trading Commission, and all written
Amendment No. 2 to the proposed rule
facilities. If the Exchange in the future communications relating to the
change on November 15, 2007. The
would seek to offer sponsored access to proposed rule change between the
Commission is publishing this notice to
its other trading facilities, it would have Commission and any person, other than
solicit comments on the proposed rule
to file a proposed rule change pursuant those that may be withheld from the
change, as amended, from interested
to section 19(b) of the Act. public in accordance with the
persons.
provisions of 5 U.S.C. 552, will be
E. Acceleration available for inspection and copying in I. Self-Regulatory Organization’s
The Commission finds good cause for the Commission’s Public Reference Statement of the Terms of Substance of
approving the proposal, as modified by Room, 100 F Street, NE., Washington, the Proposed Rule Change
Amendment Nos. 2 and 3, prior to the DC 20549, on official business days CBOE proposes to amend its rules
thirtieth day after the date of between the hours of 10 a.m. and 3 p.m. relating to the $1 Strike Pilot Program
publication of notice of the amended Copies of such filing also will be (‘‘Pilot Program’’). 3 The text of the
proposal in the Federal Register. available for inspection and copying at
Amendment Nos. 2 and 3 made only the principal office of the Exchange. All 71 15 U.S.C. 78s(b)(2).
comments received will be posted 72 17 CFR 200.30–3(a)(12).
mstockstill on PROD1PC66 with NOTICES
69 See proposed Rule 24B.9(d). without change; the Commission does 1 15 U.S.C. 78s(b)(1).
70 See NYSE Arca Equities Rule 7.29; Securities not edit personal identifying 2 17 CFR 240.19b-4.
Exchange Act Release No. 44983 (October 25, 2001), information from submissions. You 3 The Commission approved the Pilot Program on
66 FR 55225 (November 1, 2001) (SR–PCX–00–25) June 5, 2003. See Securities Exchange Act Release
(approving proposal to establish Archipelago
should submit only information that No. 47991 (June 5, 2003), 68 FR 35243 (June 12,
Exchange as the equities trading facility of the you wish to make available publicly. All 2003) (SR–CBOE–2001–60). The Pilot Program has
Pacific Exchange). submissions should refer to File been subsequently extended through June 5, 2008.
VerDate Aug<31>2005 16:16 Nov 21, 2007 Jkt 214001 PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 E:\FR\FM\23NON1.SGM 23NON1
Federal Register / Vol. 72, No. 225 / Friday, November 23, 2007 / Notices 65785
proposed rule change is available at the stock’s closing price in its primary 3.96% of the industry’s 10,412,091
Exchange, the Commission’s Public market on the previous day. The average contracts per day. The 21
Reference Room, and http:// Exchange also may list $1 strikes on any classes involved totaled 2,754 series or
www.cboe.com. other option class designated by another 1.80% of all series listed. 6 CBOE notes
securities exchange that employs a that these quoting statistics may
II. Self-Regulatory Organization’s
similar Pilot Program under their overstate the contribution of $1 strike
Statement of the Purpose of, and
respective rules. The Exchange may not prices because these figures also include
Statutory Basis for, the Proposed Rule
list long-term option series (‘‘LEAPS’’) quotes for series listed in intervals
Change
at $1 strike price intervals for any class higher than $1 (i.e., $2.50 strikes) in the
In its filing with the Commission, the selected for the Pilot Program. The same option classes. Even with the non-
Exchange included statements Exchange also is restricted from listing $1 strike series quotes included in these
concerning the purpose of, and basis for, any series that would result in strike figures, CBOE believes that the overall
the proposed rule change and discussed prices being $0.50 apart. impact on capacity is still minimal.
any comments it received on the The Exchange proposes to amend CBOE represents that it has sufficient
proposed rule change. The text of these Interpretation and Policy .01 to CBOE capacity to handle an expansion of the
statements may be examined at the Rule 5.5 to expand the Pilot Program Pilot Program, as proposed.
places specified in Item IV below. The and allow it to select a total of 10 Finally, the Exchange proposes to
Exchange has prepared summaries, set individual stocks on which option make a corresponding change to
forth in sections A, B, and C below, of series may be listed at $1 strike price Interpretation and Policy .11(e) to CBOE
the most significant aspects of such intervals. Additionally, CBOE proposes Rule 24.9, which pertains to the
statements. to expand the price range on which it expansion of the Pilot Program. In
A. Self-Regulatory Organization’s may list $1 strikes from $3 to $50. The addition, CBOE proposes to make a
Statement of the Purpose of, and existing restrictions on listing $1 strikes technical correction to paragraph (a) of
would continue, i.e., no $1 strike price Interpretation and Policy .01 to CBOE
Statutory Basis for, the Proposed Rule
may be listed that is greater than $5 Rule 5.5 where it references
Change
from the underlying stock’s closing ‘‘Interpretation and Policy .14 to Rule
1. Purpose price in its primary market on the 24.9.’’ Paragraph (a) of Interpretation .01
The purpose of the proposed rule previous day, and CBOE is restricted should reference Interpretation .11 to
change is to expand the Pilot Program from listing any series that would result Rule 24.9.
and to request permanent approval of in strike prices being $0.50 apart. In
2. Statutory Basis
the Pilot Program. The Pilot Program addition, because the Pilot Program has
been very successful by allowing The Exchange believes the proposed
currently allows CBOE to select a total
investors to establish equity options rule change is consistent with section
of 5 individual stocks on which option
positions that are better tailored to meet 6(b) of the Act, 7 in general, and furthers
series may be listed at $1 strike price
their investment objectives, CBOE the objectives of section 6(b)(5) of the
intervals. 4 In order to be eligible for
requests that the Pilot Program be Act, 8 in particular, in that it is designed
selection into the Pilot Program, the
approved on a permanent basis. to promote just and equitable principles
underlying stock must close below $20
As stated in the Commission order of trade, serve to remove impediments
in its primary market on the previous
approving CBOE’s Pilot Program and in to and perfect the mechanism of a free
trading day. If selected for the Pilot
the subsequent extensions of the Pilot and open market and a national market
Program, the Exchange may list strike
Program, 5 CBOE believes that $1 strike system, and protect investors and the
prices at $1 intervals from $3 to $20, but
price intervals provide investors with public interest.
no $1 strike price may be listed that is
greater flexibility in the trading of
greater than $5 from the underlying B. Self-Regulatory Organization’s
equity options that overlie lower priced
Statement on Burden on Competition
stocks by allowing investors to establish
See Securities Exchange Act Release Nos. 49799
(June 3, 2004), 69 FR 32642 (June 10, 2004) (SR- equity options positions that are better The Exchange does not believe that
CBOE–2004–34) (extending the Pilot Program tailored to meet their investment the proposed rule change will impose
through June 5, 2005); 51771 (May 31, 2005), 70 FR objectives. Indeed, member firms any burden on competition not
33228 (June 7, 2005) (SR-CBOE–2005–37) representing customers have repeatedly necessary or appropriate in furtherance
(extending the Pilot Program through June 5, 2006);
53805 (May 15, 2006), 71 FR 29690 (May 23, 2006) requested that CBOE seek to expand the of the purposes of the Act.
(SR-CBOE–2006–31) (extending the Pilot Program Pilot Program, both in terms of the C. Self-Regulatory Organization’s
through June 5, 2007); and 55673 (April 26, 2007), number of classes which can be selected Statement on Comments on the
72 FR 24646 (May 3, 2007) (SR-CBOE–2007–38) and the range in which $1 strikes may
(extending the Pilot Program through June 5, 2008). Proposed Rule Change Received From
4 Although the Pilot Program generally allows
be listed. Members, Participants, or Others
CBOE to select a total of 5 individual stocks on With regard to the impact on systems
which option series may be listed at $1 strike price capacities, CBOE’s analysis of the Pilot The Exchange neither solicited nor
interval, the Pilot Program was amended to provide Program shows that the impact on received comments on the proposal.
that CBOE can designate no more than 4 individual CBOE’s, OPRA’s, and market data
stocks for inclusion in the Pilot Program at the same III. Date of Effectiveness of the
time there are strike prices listed for $1 intervals on vendors’ respective automated systems Proposed Rule Change and Timing for
Mini-SPX options in accordance with Interpretation has been minimal. Specifically, in Commission Action
and Policy .11 to CBOE Rule 24.9. If CBOE decides March 2007, CBOE states that the 21
to discontinue listing Mini-SPX option series at $1 classes participating in the Pilot Within 35 days of the date of
strike price intervals, CBOE would again be free to
Program industry-wide accounted for publication of this notice in the Federal
select up to 5 option classes for inclusion in the Register or within such longer period (i)
Pilot Program. See Securities Exchange Act Release 12,950,404 average quotes per day or
No. 52625 (October 18, 2005), 70 FR 61479 (October 1.20% of the industry’s 337,744,725 6 See Securities Exchange Act Release No. 55673
24, 2005) (SR-CBOE–2005–81) (providing that as average quotes per day. The 21 classes
long as there are open Mini-SPX option series listed (April 26, 2007), 72 FR 24646 (May 3, 2007) (SR–
at $1 strike price intervals, the Exchange would be averaged 412,007 contracts per day or CBOE–2007–38) (Pilot Program report).
7 15 U.S.C. 78f(b).
required to surrender one of its five selections
under the Pilot Program). 5 See supra note 3. 8 15 U.S.C. 78f(b)(5).
65786 Federal Register / Vol. 72, No. 225 / Friday, November 23, 2007 / Notices
as the Commission may designate up to should submit only information that MSRB’s Web site (http://www.msrb.org),
90 days of such date if it finds such you wish to make available publicly. All at the MSRB, and at the Commission’s
longer period to be appropriate and submissions should refer to File Public Reference Room.
publishes its reasons for so finding or Number SR–CBOE–2007–125 and
II. Self-Regulatory Organization’s
(ii) as to which CBOE consents, the should be submitted on or before
Statement of the Purpose of, and
Commission will: December 14, 2007.
A. By order approve such proposed Statutory Basis for, the Proposed Rule
For the Commission, by the Division of Change
rule change, or Trading and Markets, pursuant to delegated
B. Institute proceedings to determine authority. 9 In its filing with the Commission, the
whether the proposed rule change Florence E. Harmon, MSRB included statements concerning
should be disapproved. Deputy Secretary.
the purpose of and basis for the
proposed rule change and discussed any
IV. Solicitation of Comments [FR Doc. E7–22841 Filed 11–21–07; 8:45 am]
comments it received on the proposed
Interested persons are invited to BILLING CODE 8011–01–P
rule change. The text of these statements
submit written data, views, and may be examined at the places specified
arguments concerning the foregoing, in Item IV below. The MSRB has
including whether the proposed rule SECURITIES AND EXCHANGE
prepared summaries, set forth in
change is consistent with the Act. COMMISSION
Sections A, B, and C below, of the most
Comments may be submitted by any of [Release No. 34–56796; File No. SR–MSRB– significant aspects of such statements.
the following methods: 2007–05]
A. Self-Regulatory Organization’s
Electronic Comments: Self-Regulatory Organizations; Statement of the Purpose of, and
• Use the Commission’s Internet Municipal Securities Rulemaking Statutory Basis for, the Proposed Rule
comment form (http://www.sec.gov/ Board; Notice of Filing and Immediate Change
rules/sro.shtml); or Effectiveness of Proposed Rule 1. Purpose
• Send an e-mail to rule- Change Relating to Rule G–27, on
comments@sec.gov. Please include File Supervision The proposed rule change will amend
Number SR–CBOE–2007–125 on the Rule G–27, on supervision, to clarify
subject line. November 15, 2007. that the requirements of the rule apply
Pursuant to Section 19(b)(1) of the solely in connection with the municipal
Paper Comments: Securities Exchange Act of 1934 securities activities of dealers and their
• Send paper comments in triplicate (‘‘Act’’),1 and Rule 19b–4 thereunder,2 associated persons. Rule G–27 has
to Nancy M. Morris, Secretary, notice is hereby given that on November previously been amended, with an
Securities and Exchange Commission, 8, 2007, the Municipal Securities effective date of February 29, 2008, to
100 F Street, NE., Washington, DC Rulemaking Board (‘‘MSRB’’ or strengthen the supervisory procedures
20549–1090. ‘‘Board’’), filed with the Securities and and controls of dealers effecting
All submissions should refer to File Exchange Commission (‘‘Commission’’ transactions in municipal securities, as
Number SR–CBOE–2007–125. This file or ‘‘SEC’’) the proposed rule change as well as to ensure a coordinated
number should be included on the described in Items I, II and III below, regulatory approach with, and to
subject line if e-mail is used. To help the which Items have been substantially facilitate inspection and enforcement in
Commission process and review your prepared by the MSRB. The MSRB has this area by, the Financial Industry
comments more efficiently, please use filed the proposal as a ‘‘non- Regulatory Authority (the ‘‘new
only one method. The Commission will controversial’’ rule change pursuant to supervisory requirements’’).5 In its filing
post all comments on the Commission’s Section 19(b)(3)(A)(iii) of the Act,3 and with the SEC of the new supervisory
Internet Web site (http://www.sec.gov/ Rule 19b–4(f)(6) thereunder,4 which requirements, the MSRB had stated that,
rules/sro.shtml). Copies of the renders the proposal effective upon as a general principle, the requirements
submission, all subsequent filing with the Commission. The of Rule G–27 apply only with respect to
amendments, all written statements Commission is publishing this notice to those registered persons who engage in
with respect to the proposed rule solicit comments on the proposed rule municipal securities activities and those
change that are filed with the change from interested persons. offices in which municipal securities
Commission, and all written activities are undertaken.6 The proposed
I. Self-Regulatory Organization’s rule change will explicitly incorporate
communications relating to the Statement of the Terms of Substance of
proposed rule change between the this limitation on the applicability of
the Proposed Rule Change Rule G–27 throughout the language of
Commission and any person, other than
The MSRB is filing with the the rule, in addition to correcting
those that may be withheld from the
Commission a proposed rule change certain cross-references and making
public in accordance with the
consisting of amendments to Rule G–27 certain formatting changes to improve
provisions of 5 U.S.C. 552, will be
to clarify that the requirements of the clarity.
available for inspection and copying in
rule apply solely in connection with the
the Commission’s Public Reference 2. Statutory Basis
municipal securities activities of
Room, 100 F Street, NE., Washington, The MSRB believes that the proposed
brokers, dealers and municipal
DC 20549, on official business days rule change is consistent with Section
securities dealers (‘‘dealers’’) and their
between the hours of 10 a.m. and 3 p.m.
associated persons. The text of the
Copies of the filing also will be available 5 See Securities Exchange Act Release No. 55830
proposed rule change is available on the
for inspection and copying at the (May 30, 2007), 72 FR 31122 (June 5, 2007) (SR–
principal office of the Exchange. All 9 17 CFR 200.30–3(a)(12).
MSRB–2006–09). See also Securities Exchange Act
comments received will be posted Release No. 56478 (September 20, 2007), 72 FR
1 15 U.S.C. 78s(b)(1). 54702 (September 26, 2007) (SR–MSRB–2007–03).
without change; the Commission does 2 17 CFR 240.19b–4. 6 See Securities Exchange Act Release No. 54930
not edit personal identifying 3 15 U.S.C. 78s(b)(3)(A)(iii).
(December 13, 2006), 71 FR 76400 (December 20,
information from submissions. You 4 17 CFR 240.19b–4(f)(6). 2006) (SR–MSRB–2006–10).

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65784 Federal Register / Vol. 72, No.

225 / Friday, November 23, 2007 / Notices

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