[Federal Register Volume 60, Number 243 (Tuesday, December 19, 1995)]
[Notices]
[Pages 65360-65362]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30762]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36575; File No. SR-CBOE-95-69]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Chicago Board Options
Exchange, Incorporated Relating to Membership Fees
December 12, 1995.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on November
29, 1995, the Chicago Board Options Exchange, Incorporated (``CBOE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') 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.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The CBOE hereby gives notice that it is proposing to amend certain
membership fees imposed by the Exchange.
The text of the proposed rule change is available at the Office of
the Secretary, CBOE and at the Commission.
[[Page 65361]]
II. Self-Regulatory Organizations' 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 section
(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
The purpose of this proposed rule change is to amend the membership
fees imposed by the Exchange in two respects. These amendments will
take effect on January 1, 1996.
First, the Exchange proposes to reduce from $1,500 and $500 the fee
that it assesses member organizations that apply for Exchange approval
to conduct a non-member customer business.
Second, the Exchange proposes to amend its Inactive Nominee Status
Change Fee. Currently, the Exchange assesses member organizations a $55
whenever an inactive nominee of a member organization becomes an active
nominee of the member organization, regardless of when the Exchange's
Membership Department is notified of that status change. As is more
fully described below, in order to encourage member organizations to
provide the Membership Department which advance notice of such status
changes, the Exchange is proposing to make the amount of this fee
depend on when the Membership Department receives notice of these
status changes.
In order to consummate a nominee status change, a member
organization is required to submit a Notification of Change in Nominee
Status Form (``Notification Form'') to the Membership Department
setting forth, among other things, the designated effective date of the
status change. If the Notification Form is submitted prior to the
opening of trading on the designated effective date of the status
change, the status change becomes effective upon the opening of trading
on such designated effective date. If the Notification Form is
submitted subsequent to the opening of trading on the designated
effective date of the status change, the status changer becomes
effective upon the submission of the Notification Form. Upon the
effectiveness of the status change, the person moving from inactive to
active nominee status is granted trading privileges on the Exchange.
Although a nominee status change can become immediately effective
(or can become effective within minutes) if notice of the status change
is submitted to the Membership Department on its designated effective
date, it taken time for the Membership Department to update the
Exchange's membership records to reflect the status change.
Specifically, the Membership Department must enter the status change
information into the Exchange's membership database and must validate
the acronym for the person moving from inactive to active nominee
status in the Exchange's Trade Match System so that trades can be
matched to the nominee by that System. Ordinarily, the Membership
Department is able to quickly process nominee status changes and to
validate the acronyms of nominee moving from inactive to active status
before these nominees begin consummating trades on the Exchange.
However, if the Membership Department receives notification of a number
of nominee status changes either late in the day on the date prior to
the designated effective date of such status changes and/or on the
designated effective date of such status changes, it is more difficult
for the Membership Department to process all of the changes before the
newly activated nominees begin their trading activities. This can
result in outtrades being created because the Trade Match System is
unable to match trades with the acronyms of those nominees whose status
changes have not yet been processed, and these outtrades then need to
be corrected later in the day.
In order to encourage member organizations to provide the
Membership Department with sufficient notice of nominee status changes
so that the Membership Department has time to process such changes
prior to the time that the newly activated nominees begin to trade, the
Exchange is proposing the following three-tiered fee structure for
nominee status changes: If a Notification Form is submitted before 4
p.m. on the date prior to the designated effective date of the status
change, the fee is proposed to be $40. If a Notification Form is
submitted after 4 p.m. on the date prior to the designated effective
date of the status change or before 8 a.m. on the designated effective
date of the status change, the fee is proposed to be $75. If a
Notification Form is submitted after 8 a.m. on the designated effective
date of the status change, the fee is proposed to be $150.
The CBOE represents that the proposed rule change is consistent
with section 6 of the Act, in general, and furthers the objectives of
Section 6(b)(4) of the Act in particular, in that it is designed to
provide for the equitable allocation of reasonable dues, fees, and
other changes among CBOE members.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any inappropriate 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
Because the foregoing rule change establishes or changes a due,
fee, or other charge imposed by the Exchange, it has become effective
pursuant to Section 19(b)(3)(A) of the Act and subparagraph (e) of Rule
19b-4 thereunder. At any time within 60 days of the filing of the
proposed rule changes, 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.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 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 Section, 450 Fifth Street, NW.,
Washington, DC 20549. Copies of such
[[Page 65362]]
filing will also be available for inspection and copying at the
principal office of the CBOE. All submissions should refer to the File
No. SR-CBOE-95-69 and should be submitted by January 8, 1996.
For the Commission, by the Division of Market Regulation, pursuant
to delegated authority.\1\
\1\ 17 CFR 200.30-3(a)(12) (1994).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-30762 Filed 12-18-95; 8:45 am]
BILLING CODE 8010-01-M