[Federal Register Volume 61, Number 68 (Monday, April 8, 1996)]
[Notices]
[Pages 15539-15540]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-8540]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37052; File No. SR-CBOE-96-22]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Board Options 
Exchange, Incorporated Relating to the Effective Date of the Standing 
Assurance Provision Relating to the Requirement to Make Prior 
Arrangements or Obtain Other Assurances Before Short Selling

March 29, 1996.
    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 March 
29, 1996, 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 proposes to change the 
effective date of a certain aspect of a rule change, Interpretation .04 
to Rule 30.20, previously approved by the Commission.\1\ The previously 
approved rule change relates to the requirement to make prior 
arrangements to borrow stock or to obtain other assurances that 
delivery can be made on settlement date before a member or person 
associated with a member may sell short. Specifically, the CBOE 
proposes to delay, until May 10, 1996, the effectiveness of that 
portion of Interpretation .04 to Rule 30.20 that prohibits CBOE members 
from using blanket assurances that securities are available for 
borrowing to satisfy their affirmative determination requirements.

    \1\ See Securities Exchange Act Release No. 36245 (Nov. 27, 
1995), 60 FR 62273 (Dec. 5, 1995).
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    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, 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

    The purpose of this rule proposal is to delay the effectiveness of 
a certain aspect of a rule change previously approved by the Commission 
relating to the requirement to make prior arrangements to borrow stock, 
warrants, or other securities that trade subject to Chapter 30 of the 
Exchange's rules, or to otherwise ensure availability of the subject 
securities before engaging in short sales. Specifically, the CBOE 
proposes to delay, until May 10, 1996, the effectiveness of that 
portion of the rule change that prohibits CBOE members from using 
blanket or standing assurances that securities are available for 
borrowing to satisfy their affirmative determination requirements.
    The Exchange delayed the effectiveness of this provision while the 
NASD determined how to address the feedback from a broad spectrum of 
members who believed that the standing assurance provisions created an 
unnecessarily burdensome regulatory requirement on NASD members. Since 
that time, the NASD has adopted a new rule that would allow members to 
rely on standing assurances in certain circumstances. The CBOE has 
decided to adopt the same provision for its short sale rule. However, 
because the deadline for the earlier delay in effectiveness of March 
30, 1996 has nearly arrived, the Exchange is again delaying the 
effectiveness of the standing assurance provision until May 10, 1996 in 
order to allow it to submit a rule change that brings CBOE's rule into 
conformity with that of the NASD.
    By delaying the effectiveness of the standing assurance provision 
until May 10, 1996, this rule proposal will allow the Commission to 
present the proposal for public comment and will ensure that the CBOE 
rule can be made consistent with a similar rule of the NASD.

[[Page 15540]]
Therefore, 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 by the 
Exchange as constituting a stated policy with respect to the 
enforcement of an existing rule.

(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 constitutes a stated policy, 
practice or interpretation with respect to the enforcement of an 
existing CBOE rule, 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 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.

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. 552, will be available for inspection and copying in the 
Commission's Public Reference Section, 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 the File No. SR-CBOE-96-22 and should be 
submitted by April 29, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\2\

    \2\ CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-8540 Filed 4-5-96; 8:45 am]
BILLING CODE 8010-01-M