03-4361. Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by OneChicago, LLC Relating to Block Trading

February 14, 2003.

Pursuant to section 19(b)(7) of the Securities Exchange Act of 1934 (“Act”),^[1] and rule 19b-7 under the Act,^[2] notice is hereby given that on February 6, 2003, OneChicago, LLC (“OneChicago”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule changes described in items I, II, and III below, which items have been prepared by OneChicago. The Commission is publishing this notice to solicit comments on the proposed rule changes from interested persons. OneChicago also filed a written certification with the Commodity Futures Trading Commission (“CFTC”) under section 5c(c) of the Commodity Exchange Act ^[3] on February 5, 2003.

I. Self-Regulatory Organization's Description of the Proposed Rule Change

OneChicago is proposing to reduce the minimum number of contracts that may be negotiated in a block trade from 10,000 contracts to 500 contracts.

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

OneChicago has prepared statements concerning the purpose of, and basis for, the proposed rule change, burdens on competition, and comments received from members, participants, and others. The text of these statements may be examined at the places specified in item IV below. These statements are set forth in sections A, B, and C below.

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

1. Purpose

OneChicago is proposing to amend its Block Trade Policy to reduce the minimum number of contracts that may be negotiated in a block trade to 500 contracts. OneChicago rule 417 permits block trade transactions that are “for at least the minimum number of Contracts as will from time to time be specified by the Exchange.” OneChicago's Block Trade Policy establishes a minimum number of 10,000 contracts for block trade transactions. The proposed rule change would amend OneChicago's Block Trade Policy to permit a minimum number of 500 contracts for block trade transactions.

OneChicago believes that this change is appropriate for competitive purposes.

2. Statutory Basis

OneChicago believes that the proposed rule change is consistent with section 6(b)(5) of the Act ^[4] in that it promotes competition, is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade and to protect investors and the public interest. The proposed rule change will permit OneChicago to better compete with other security futures markets. OneChicago also believes that the proposed rule change will also promote just and equitable principles of trade and protect investors by providing a prudent level of minimum contracts for block trade transactions for those sophisticated persons and professionals that are permitted to enter into these transactions.

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

OneChicago does not believe that the proposed rule change will have a negative impact on competition. In fact, OneChicago believes that the proposed rule change will promote competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others

Comments on the proposed rule change have not been solicited and no comments have been received on the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

Within 60 days of the date of effectiveness of the proposed rule change, the Commission, after consultation with the CFTC, may summarily abrogate the proposed rule change and require that the proposed rule change be refiled in accordance with the provisions of section 19(b)(1) of the Act.^[5]

IV. Solicitation of Comments

Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change conflicts with the Act. Persons making written submissions should file nine copies of the submission with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Comments also may be submitted electronically to the following e-mail address: [e-mail]. 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. Copies of these filings also will be available for inspection and copying at the principal office of OneChicago. Electronically submitted comments will be posted on the Commission's Web site (http://www.sec.gov). All submissions should refer to File No. SR-OC-2003-02 and should be submitted by March 18, 2003.

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.^[6]

Margaret H. McFarland,

Deputy Secretary.

Footnotes

1.  15 U.S.C. 78s(b)(7).

2.  17 CFR 240.19b-7.

3.  7 U.S.C. 7a-2(c).

4.  15 U.S.C. 78f(b)(5).

5.  15 U.S.C. 78s(b)(1).

6.  17 CFR 200.30-3(a)(75).