[Federal Register Volume 64, Number 144 (Wednesday, July 28, 1999)]
[Notices]
[Pages 40924-40925]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19264]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41625; File No. SR-CBOE-99-25]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Chicago Board Options
Exchange, Inc. Relating to the Market-Maker Surcharge Fee Schedule
July 19, 1999.
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 June 17, 1999, the Chicago Board Options Exchange, Inc. (``CBOE'' or
``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. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The CBOE is proposing to make changes to its fee schedule pursuant
to CBOE rule 2.40, Market-Maker Surcharge for Brokerage.\3\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 41121 (February 26,
1999), 64 FR 11523 (March 9, 1999) (order approving CBOE Rule 2.40).
---------------------------------------------------------------------------
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 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, the Proposed Rule Change
1. Purpose
Pursuant to CBOE Rule 2.40, the Equity Floor Procedure Committee
(``Committee'') approved the following fees for the following option
classes:
------------------------------------------------------------------------
Market- Order book
maker official
Option class surcharge brokerage
(per rate (per
contract) contract)
-----------------------------------------------------------------\4\----
AboveNet Communications...................... $0.08 $0.00
Prodigy Communications Corp.................. 0.03 0.00
------------------------------------------------------------------------
The fees for AboveNet will be effective retroactive to May 10,
1999, and the fees for Prodigy will be effective
[[Page 40925]]
retroactive to May 18, 1999.\5\ Both fees will remain in effect until
such time as the Committee or the Board determines to change these fees
and files the appropriate rule change with the Commission.
---------------------------------------------------------------------------
\4\ The surcharge will be used to reimburse the Exchange for the
reduction in the Order Book Official brokerage rate from $0.20 in
the relevant option classes. Any remaining funds will be paid to
Stationary Floor Brokers as provided in Exchange Rule 2.40.
\5\ At its May 20, 1999, meeting, the Committee approved these
fees retroactive to the respective dates the fees began. Although
the fees are planned to be calculated for activity that occurred as
of the dates referred to above, the actual bills for payment will be
sent in June.
---------------------------------------------------------------------------
These fees are being implemented mid-month because both of these
fees are for new options classes, which have not traded before. As a
result, changes had to be made to the billing program to account for
these new classes in the middle of the month.\6\
---------------------------------------------------------------------------
\6\ Through miscommunication, certain Exchange Staff believed
these fees could be instituted in mid-month and presented in a
filing at the end of the month since the actual charges would not be
invoiced until that point. However, CBOE has instituted procedures
to ensure that a filing be done prior to the fees being implemented,
regardless of whether the fees are being implemented mid-month or at
the beginning of the next month. Telephone conversation between
Michael Walinskas, Associate Director, Division of Market
Regulation, Commission, and Timothy Thompson, Director, Regulatory
Affairs, CBOE, on May 27, 1999.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b)(4) \7\ of the Act because it is designed to provide for
the equitable allocation of reasonable dues, fees, and other charges
among its members.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is 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
Written comments on the proposed rule change were neither solicited
nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
The foregoing rule change establishes or changes a due, fee, or
other charge imposed by the Exchange and, therefore, has become
effective pursuant to Section 19(b)(3)(A)(ii) \8\ and paragraph (f)(2)
of Rule 19b-4 thereunder.\9\ 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.\10\
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 17 CFR 240.19b-4(f)(2).
\10\ In reviewing this proposal, the Commission has considered
the proposal's impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
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, NW, Washington, DC 20549-0609.
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 at the
Commission's Public Reference Room. Copies of such filing also will be
available for inspection and copying at the principal office of the
CBOE. All submissions should refer to File No. SR-CBOE-99-25 and should
be submitted by August 18, 1999.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Jonathan G. Katz,
Secretary.
[FR Doc. 99-19264 Filed 7-27-99; 8:45 am]
BILLING CODE 8010-01-M
