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Notice

Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Dissemination of Certain Index Data

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Start Preamble September 14, 2009.

Pursuant to Section 19(b)(1) [1] of the Securities Exchange Act of 1934 (the “Act”) [2] and Rule 19b-4 thereunder,[3] notice is hereby given that on August 28, 2009, the Chicago Board Options Exchange, Incorporated (“CBOE” or the “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by CBOE. The Exchange filed the proposal as “non-controversial” pursuant to Section 19(b)(3)(A)(iii) of the Act [4] and Rule 19b-4(f)(6) thereunder, which renders it effective upon filing.[5] The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

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

Chicago Board Options Exchange, Incorporated (“CBOE” or “Exchange”) is not proposing any textual changes to the Constitution or Rules of CBOE in this filing. The Exchange is proposing to update statements that it made in Item 3 of previous filings made by the Exchange pursuant to Rule 19b-4, as described in subsection (a)(1) of Item 3 of this filing. The text of the proposed rule change is available on the Exchange's Web site (http://www.cboe.org/​legal), at the Exchange's Office of the Secretary, and at the Commission.Start Printed Page 48113

II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, CBOE 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. CBOE 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, Proposed Rule Change

1. Purpose

CBOE currently disseminates values of its proprietary indexes and many of the indexes licensed by CBOE to underlie options traded on CBOE through the Options Price Reporting Authority (“OPRA”). Some of these indexes underlie options approved for listing and trading on CBOE by the Commission pursuant to filings submitted by CBOE pursuant to Rule 19b-4. In some of these filings, CBOE stated that the values of the respective indexes would be disseminated through OPRA.[6]

Since 2006, CBOE has also disseminated values of its proprietary indexes and certain licensed indexes to major market data vendors outside of OPRA. For its proprietary and other indexes subject to a requirement that dissemination of the index values occur through OPRA pursuant to the filings noted above, the Exchange proposes to amend such requirement to permit dissemination of these values to major market data vendors solely outside of OPRA.

CBOE believes that its proposal to permit dissemination of its proprietary and certain other index values to major market data vendors solely outside of OPRA will continue to be in full compliance with the Commission's requirements with respect to the dissemination of values of indexes underlying options and CBOE's own applicable rules. CBOE Rule 24.2 requires that values of an underlying index be widely disseminated at least once every fifteen seconds if the listing of a class of options on the index is not the subject of a separate filing, and this will continue to be the case for index values that cease to be disseminated on OPRA.[7] CBOE Rule 24.3(a) requires that “The Exchange shall disseminate or shall assure that the current index value is disseminated after the close of business and from time-to-time on days on which transactions in index options are made on the Exchange,” and this also will continue to be the case for index values that cease to be disseminated on OPRA.

2. Statutory Basis

The Exchange believes the proposed rule change is consistent with Section 6(b) of the Act [8] in general, and Section 6(b)(5) of the Act [9] in particular, in that it updates statements made by the Exchange in previous filings that would either become inaccurate or impede the Exchange from modifying its dissemination of index values in a manner that is consistent with the objectives of the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of 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

Because the forgoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act [10] and Rule 19b-4(f)(6) thereunder.[11]

The long standing policy of the Commission with respect to the dissemination of values of indexes underlying index options has been to ensure the wide dissemination and wide availability of index values to market participants. This policy is reflected in CBOE Rule 24.2, which requires that values of an underlying index be widely disseminated at least once every fifteen seconds if the listing of a class of options on the index is not the subject of a separate filing.[12] The Exchange believes the proposed rule change is consistent both with CBOE Rule 24.2 and this Commission policy. Based on the foregoing, the Exchange designates this proposed rule change as Start Printed Page 48114immediately effective under Rule 19b-4(f)(6) [13] of the Act.

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

Paper Comments

  • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2009-062. 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 Commission's 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 CBOE. 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-2009-062 and should be submitted on or before October 13, 2009.

Start Signature

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14

Florence E. Harmon,

Deputy Secretary.

End Signature End Preamble

Footnotes

1.  15 U.S.C.78s(b)(1).

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4.  15 U.S.C. 78s(b)(3)(A)(iii).

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6.  For example, in its filing with respect to the options on the RVX, CBOE stated that “Volatility index levels [of the RVX] will be calculated by CBOE and disseminated at 15-second intervals to market information vendors via the Options Price Reporting Authority (“OPRA”),” and the Commission noted this statement in its approval order for these options. See Securities Exchange Act Release No. 54643 (October 23, 2006), 71 FR 63367 (October 30, 2006) (notice of filing of File No. SR-CBOE-2006-73) and Securities Exchange Act Release No. 55425 (March 8, 2007), 72 FR 12238 (March 15, 2007) (approval of File No. SR-CBOE-2006-73). Similar statements were made in CBOE filings with respect to options on the following indexes: See Securities Exchange Act Release Nos. 32893 (September 14, 1993), 58 FR 49070 (September 21, 1993) (XSP); 58207 (July 22, 2008), 73 FR 43963 (July 29, 2008) (BXM); 32244 (April 29, 1993), 58 FR 27005 (May 6, 1993) (CEX); 48807 (November 19, 2003), 68 FR 66516 (November 26, 2003) (VIX, VXD, VXN); 49698 (May 13, 2004), 69 FR 29152 (May 20, 2004) (VXB); 39011 (September 3, 1997), 62 FR 47840 (September 11, 1997) (DJX, DXL, WDX); 39012 (September 3, 1997), 62 FR 47850 (September 11, 1997) (DTX); 39013 (September 3, 1997), 62 FR 47845 (September 11, 1997) (DUX, LDU); 41112 (February 25, 1999), 64 FR 10517 (March 4, 1999) (ECM, ZJ); 41009 (February 1, 1999), 64 FR 6410 (February 9, 1999) (DJR); 38353 (February 28, 1997), 62 FR 10888 (March 10, 1997) (NFT); 31382 (October 30, 1992), 57 FR 52802 (November 5, 1992) (RUT); 48591 (October 2, 2003), 68 FR 58728 (October 10, 2003) (RUI, RUA); 51220 (February 17, 2005), 70 FR 09398 (February 25, 2005) (RMN); 32238 (April 29, 1993), 58 FR 27020 (May 6, 1993) (BIX); 32241 (April 29, 1993), 58 FR 27012 (May 6, 1993) (HCX); 32239 (April 29, 1993), 58 FR 27024 (May 6, 1993) (IUX); 32240 (April 29, 1993), 58 FR 27016 (May 6, 1993) (RLX); and 34124 (May 27 1994), 59 FR 29310 (June 6 1994) (SGX, SVX).

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7.  See CBOE Rules 24.2(b)(10) (values of narrow-based index options must be “reported at least once every fifteen seconds during the time the index options are traded on the Exchange”), 24.2(d)(8) (values of micro narrow-based index options must be “reported at least once every fifteen seconds during the time the index options are traded on the Exchange”), and 24.2(f)(11) (the Exchange may trade options on a broad-based index pursuant to Rule 19b-4(c) of the Exchange act if “ * * * (11) The current index value is widely disseminated at least once every fifteen (15) seconds by the Options Price Reporting Authority, CTA/CQ, NIDS or one or more major market data vendors during the time options on the index are traded on the Exchange”). It has been pointed out to CBOE that the language of 24.2(f)(11) is not parallel to the language of 24.2(b)(10) and 24.2(d)(8), particularly in the use of the word “disseminated” in the first of these provisions and the word “reported” in the second and third of them. CBOE believes that the three provisions are intended to be substantively parallel, and CBOE intends to amend these Rules in a separate filing to conform their language by using the word “disseminate” in all three provisions.

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11.  17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires a self-regulatory organization to provide the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement.

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12.  See supra note 2.

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[FR Doc. E9-22684 Filed 9-18-09; 8:45 am]

BILLING CODE 8010-01-P