[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]



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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).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-30762 Filed 12-18-95; 8:45 am]
BILLING CODE 8010-01-M