[Federal Register Volume 61, Number 44 (Tuesday, March 5, 1996)]
[Notices]
[Pages 8698-8699]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5044]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36896; File No. SR-CBOE-96-05]


Self-Regulation Organizations; Notice of Filing of Proposed Rule 
Change by the Chicago Board Options Exchange, Inc., Relating to 
Limitation of Liability of Index Reporting Authorities

February 27, 1996.
    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 February 7, 1996, 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 self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.

    \1\ 15 U.S.C. Sec. 78s(b)(1) (1988).
    \2\ 17 CFR 240.19b-4 (1994).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the IProposed Rule Change

    The CBOE proposes to amend Exchange Rule 24.14, which provides for 
disclaimers of liability on behalf of designated index reporting 
authorities.

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
    The purpose of the proposed rule change is to amend Exchange Rule 
24.14, which in its present form contains four separate disclaimers of 
liability on behalf of four different index reporting authorities.\3\ 
Index reporting authorities provide index values to the Exchange that 
serve as the basis for the various classes of index options listed and 
traded on the Exchange. Pursuant to the terms of the Exchange's 
contracts with certain index reporting authorities, the Exchange has 
agreed to include these specific liability disclaimers in its rules. 
Although the substance of each of these disclaimers is the same, they 
differ somewhat in their language, as reflected in the four paragraphs 
of existing Exchange Rule 24.14. The proposed rule change would combine 
the four existing disclaimers in a single paragraph in order to 
eliminate editorial differences among them, and add the CBOE and any 
other designated index reporting authorities as persons entitled to the 
benefit of the disclaimer.

    \3\ In Exchange Rule 24.1(h), the CBOE defines the term 
``reporting authority'' in respect of a particular index as the 
institution or reporting service designated by the Exchange as the 
official source for calculating the level of the index from the 
reported prices of the underlying securities that are the basis of 
the index and reporting such level.
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2. Statutory Basis
    The CBOE believes that the proposed rule change is consistent with 
Section 6(b) of the Act in general, and with Section 6(b)(5) in 
particular,\4\ in that by 

[[Page 8699]]
retaining and clarifying existing disclaimers of liability that have 
been found to satisfy statutory standards, the proposed rule change 
will improve the basis on which index options are listed and traded on 
the CBOE, which, in turn, will serve to promote just and equitable 
principles of trade as well as to protect investors and the public 
interest.

    \4\ 15 U.S.C. Sec. 78f(b)(5) (1988).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The CBOE 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

    Within 35 days of the 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 CBOE consents, the Commission will:
    A. By order approve the 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. 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. Sec. 552, will be available for inspection and copying at 
the Commission's Public Reference Section, 450 Fifth Street, N.W., 
Washington, D.C. 20549. 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-96-05 and should be 
submitted by March 26, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\

    \5\ 17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-5044 Filed 3-4-96; 8:45 am]
BILLING CODE 8010-01-M