[Federal Register Volume 69, Number 242 (Friday, December 17, 2004)]
[Notices]
[Pages 75573-75575]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-3700]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50840; File No. SR-CBOE-2004-79]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by 
the Chicago Board Options Exchange, Incorporated Relating to the 
Trading Hours for Options on Units and Options on the Nasdaq-100 Index 
Tracking Stock

December 10, 2004.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on November 30, 2004, the Chicago Board Options Exchange, Incorporated 
(``CBOE'' or ``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 the Exchange. 
On December 10, 2004, the Exchange filed Amendment No. 1 to the 
proposed rule change.\3\ The

[[Page 75574]]

Exchange filed the proposal, as amended, as a ``non-controversial'' 
proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 
\4\ and Rule 19b-4(f)(6) thereunder.\5\ The Commission is publishing 
this notice to solicit comments on the proposed rule change, as 
amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 is incorporated into this notice.
    \4\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \5\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its rules relating to the hours of 
trading for options on Units \6\ and options on the Nasdaq-100 Index 
Tracking Stock. The text of the proposed rule change is set forth 
below.
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    \6\ ``Units'' are defined in Interpretation and Policy .06 to 
CBOE Rule 5.3.
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    Proposed new language is in italics. Proposed deletions are in 
brackets.
* * * * *
CHAPTER VI
Doing Business on the Exchange Floor (Rule 6.1-6.85)
Section A: General
    Rule 6.1--Days and Hours of Business.
    Rule 6.1.--No Change.
    * * * Interpretations and Policies:
    .01-.02 No Change.
    .03 Options on Units, as defined under Interpretation and Policy 
.06 to Rule 5.3, and options on the Nasdaq-100 Index Tracking Stock may 
be traded on the Exchange until 3:15 p.m. each business day.
    .04 The Board of Directors has determined that the Exchange will 
not be open for business on New Year's Day, Martin Luther King, Jr. 
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, 
Labor Day, Thanksgiving Day or Christmas Day. The Board has also 
determined that, when any holiday observed by the Exchange falls on a 
Saturday, the Exchange will not be open for business on the preceding 
Friday, and that when any holiday observed by the Exchange falls on a 
Sunday, the Exchange will not be open for business on the following 
Monday, unless unusual business conditions exist at the time.
    .05 [.04] No Change.
    Rule 6.2-6.85 No Change.
* * * * *

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

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of, and statutory basis for, the proposed rule 
change and discussed any comments it received on the proposed rule 
change. The text of those statements may be examined at the places 
specified in Item IV below. The Exchange 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend CBOE Rule 6.1 (``Days and Hours of 
Business'') by adding a new Interpretation and Policy .03 that will 
codify CBOE's practice of trading options on Units \7\ and options on 
the Nasdaq-100 Index Tracking Stock (``QQQs'') until 3:15 p.m. (CST). 
Since CBOE began trading options on Units and options on the QQQs, the 
trading hours for these options have lasted until 3:15 p.m. (CST).
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    \7\ Interpretation and Policy .06 to CBOE Rule 5.3 provides the 
listing standards for Units and other similar types of products.
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    The 3:15 p.m. termination time coincides with the trading hours 
termination time for options on stock indexes, including options on the 
NDX index. Recently, the Nasdaq Stock Market, Inc. (``Nasdaq'') 
announced its intention to transfer the listing of the QQQs from the 
American Stock Exchange (``Amex'') to Nasdaq with trading to begin on 
December 1, 2004. The QQQs traded on the Amex until 3:15 p.m. (CST), 
and as of December 1, 2004, Nasdaq will close trading on the QQQs at 3 
p.m. (CST), but will allow trading in the QQQs to continue in after 
hours trading until 7 p.m. (CST). CBOE intends to continue to trade 
options on the QQQs during its regular trading session until 3:15 p.m. 
(CST), as it does options on other index or basket products.
    CBOE notes that the Amex and the Pacific Exchange, Inc. (``PCX'') 
are allowed under their respective rules to specifically trade options 
on QQQs until 3:15 p.m. (CST).\8\ The new Interpretation and Policy .03 
will codify CBOE's longstanding practice of trading options on QQQs and 
Units until 3:15 p.m. (CST). CBOE represents that this will serve to 
avoid any confusion in the marketplace over the trading hours of QQQs 
options in light of Nasdaq's shift of the listing venue of QQQs and to 
codify the trading hours for options on Units and on QQQs.
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    \8\ See Commentary .02 to Amex Rule 1 and Commentary .02 to PCX 
Rule 7.1.
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2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\9\ in general, and Section 
6(b)(5) of the Act,\10\ in particular, in that it is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, to remove impediments to and perfect 
the mechanism of a free and open market and a national market system, 
and, in general, to protect investors and the public interest.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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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 not necessary or appropriate in furtherance of 
the 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

    The Exchange has designated the proposed rule change, as amended, 
as a ``non-controversial'' rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act\11\ and subparagraph (f)(6) of Rule 19b-4 
thereunder.\12\ The Exchange represents that the foregoing rule change: 
(1) Does not significantly affect the protection of investors or the 
public interest; (2) does not impose any significant burden on 
competition; and (3) by its terms, does not become operative for 30 
days after the date of this filing, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest. The Exchange has requested that the Commission 
waive the five-day pre-filing notice requirement and the 30-day 
operative delay period for ``non-controversial'' proposals and make the 
proposed rule

[[Page 75575]]

change, as amended, effective and operative upon filing.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 17 CFR 240.19b-4(f)(6).
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    The Commission has determined to waive the five-day pre-filing 
notice requirement and the 30-day operative delay period.\13\ The 
Commission notes that accelerating the operative date will allow the 
trading hours for options on Units and options on the QQQs to remain 
unchanged and provide continuity to the marketplace. Therefore, the 
foregoing rule change has become immediately effective and operative 
upon filing pursuant to Section 19(b)(3)(A)(iii) of the Act \14\ and 
Rule 19b-4(f)(6) thereunder.\15\
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    \13\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
    \14\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \15\ 17 CFR 240.19b-4(f)(6).
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    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.\16\
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    \16\ For purposes of calculating the 60-day period within which 
the Commission may summarily abrogate the proposed rule change under 
Section 19(b)(3)(C) of the Act, the Commission considers that period 
to commence on December 10, 2004, the date the Exchange filed 
Amendment No. 1 to the proposed rule change. See 15 U.S.C. 
78s(b)(3)(C).
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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

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number SR-CBOE-2004-79 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-CBOE-2004-79. 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, 450 Fifth 
Street, NW., Washington, DC 20549. Copies of such filing also will be 
available for inspection and copying at the principal office of the 
Exchange. 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-2004-79 and should be submitted on or before January 7, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E4-3700 Filed 12-16-04; 8:45 am]
BILLING CODE 8010-01-P