[Federal Register Volume 63, Number 83 (Thursday, April 30, 1998)]
[Notices]
[Pages 23820-23821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-11515]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-39911; File No. SR-CBOE-98-07]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the Chicago Board Options Exchange, Incorporated Relating to
the Committee Responsible for Governing RAES Participant in SPX
April 24, 1998.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of
1934, U.S.C. 78s(b)(1), notice is hereby given that on February 20,
1998, 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, II,
and III below, which Items have been prepared by the CBOE. CBOE filed
an amendment on April 15, 1998, requesting that the filing be handled
as a regular way filing under Section 19(b)(2) of the Act.\1\ The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ See, letter from Timothy H. Thompson, Director, Regulatory
Affairs, Legal Department, Chicago Board Options Exchange to
Victoria Berberi-Doumar, Division of Market Regulation, SEC, dated
April 15, 1998.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
the CBOE proposes to change the Committee responsible for governing
RAES eligibility in options on the Standard & Poor's 500 Index
(``SPX'') from the appropriate Floor Procedure Committee to the
appropriate Market Performance Committee. The text of the proposed rule
change is available at the Office of the Secretary, CBOE and at the
Commission.
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. The 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
The Exchange has decided to change the body governing eligibility
for RAES in SPX from the appropriate Floor Procedure Committee to the
appropriate Market Performance Committee. Currently, SPX is the only
options class in which the issues concerning the eligibility of market-
makers to participate in RAES is governed by a Floor Procedure
Committee instead of by a Market Performance Committee. Rule 8.16 (in
the case of option classes other than OEX \2\, SPX, and DJX \3\) and
Rule 24.17 (in the case of OEX and DJX option classes) provide that the
appropriate Market Performance Committee will govern the RAES market-
maker eligibility issues. This change, therefore, will make the
regulation of SPX RAES eligibility consistent with that of the other
option classes traded on the Exchange. The governance of eligibility
issues for SPX RAES will initially be delegated to the newly formed
Index Market Performance Committee.
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\2\ OEX stands for options on the Standard & Poor's 100 Index.
\3\ DJX stands for options on the Dow Jones Industrial Average.
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As with the other options classes, the Index Market Performance
Committee will have authority to exempt market-markers from: the
requirement that the market-maker be present in the crowd to log onto
or remain on RAES (Rule 24.16(a)(iii)), the requirement that the
market-maker must log onto RAES at any time during an expiration month
when he is present in the crowd and when he has logged on previously
during that expiration month (Rule 24.16(b)), certain requirements
concerning the participation of joint accounts (Rule 24.16(c)), and
certain requirements concerning the participation of member
organizations with multiple nominees (Rule 24.16(d)). The Index Market
Performance Committee will also take over the broader authority of the
SPX Floor Procedure Committee to set the maximum number of RAES
participants in RAES groups, to disallow the participation of certain
RAES groups
[[Page 23821]]
(Rule 24.16(e)), to require market-makers of the trading crowd to log
onto RAES if there is inadequate participation (Rule 24.16(f)), and to
take other remedial action as appropriate (Rule 24.16(g)).
2. Statutory Basis
By moving the authority for the governance of RAES eligibility
issues in SPX from a Floor Procedure Committee to a Market Performance
Committee, thus, making SPX RAES consistent with RAES for the other
option classes traded on the Exchange, the proposed rule change is
consistent with Section 6 of the Act in general and Section 6(b)(5) in
particular in that it is designed to promote just and equitable
principles of trade and to protect investors and the public interest.
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.
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
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) by order approve such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.
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, N.W., Washington,
D.C. 20549. Copies of such filing will also be available for inspection
and copying at the principal office of the CBOE. All submissions should
refer to File No. SR-CBOE-98-07 and should be submitted by May 21,
1998.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\4\
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\4\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-11515 Filed 4-29-98; 8:45 am]
BILLING CODE 8010-01-M
