[Federal Register Volume 70, Number 157 (Tuesday, August 16, 2005)]
[Notices]
[Page 48214]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4424]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52234; File No. SR-CBOE-2005-40]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Order Approving a Proposed Rule Change and Amendment No. 
1 Thereto Relating to the Hybrid Opening System

August 10, 2005.
    On May 16, 2005, the Chicago Board Options Exchange, Incorporated 
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to allow the Hybrid Opening 
System (``HOSS'') to open an option series as long as any market 
participant,\3\ not just the Designated Primary Market-Maker (``DPM''), 
has submitted an opening quote that complies with the legal width quote 
requirements.\4\ The proposal would also change the method for 
determining the acceptable range the opening price must be in before 
the series may open to use the highest bid and the lowest offer. The 
Exchange submitted Amendment No. 1 on June 24, 2005.\5\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ This includes a quote from a DPM, e-DPM, market maker, or a 
remote market maker. See CBOE Rule 6.45A.
    \4\ Even though HOSS can open a series without a DPM's quote, 
DPMs, as well as electronic DPMs, remain obligated under CBOE rules 
to timely submit opening quotes.
    \5\ Amendment No. 1 revised the rule text to reflect language 
recently approved in another filing.
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    The proposed rule change was published for comment in the Federal 
Register on July 6, 2005.\6\ The Commission received no comments on the 
proposal.
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    \6\ See Securities Exchange Act Release No. 51938 (June 29, 
2005), 70 FR 39537.
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    The Commission finds that the proposed rule change, as amended, is 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange\7\ 
and, in particular, the requirements of Section 6 of the Act \8\ and 
the rules and regulations thereunder. The Commission specifically finds 
that the proposed rule change is consistent with Section 6(b)(5) of the 
Act \9\ in that it is designed to promote just and equitable principles 
of trade, to remove impediments and to perfect the mechanism of a free 
and open market and a national market system, and, in general, to 
protect investors and the public interest. The Commission believes that 
the proposal should help to ensure that all options series are promptly 
opened on CBOE, and may help to provide for a tighter opening price 
range.
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    \7\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(2).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-CBOE-2005-40), as amended, 
is approved.
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    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4424 Filed 8-15-05; 8:45 am]
BILLING CODE 8010-01-P