[Federal Register Volume 61, Number 206 (Wednesday, October 23, 1996)]
[Notices]
[Page 55062]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27094]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37824; File No. SR-ODD-96-1]
Self-Regulatory Organizations; The Options Clearing Corporation;
Order Approving Proposed Supplement to Options Disclosure Document
Regarding Flexible Exchange Options (``FLEX Options'')
October 15, 1996.
On October 4, 1996, The Options Clearing Corporation (``OCC'')
submitted to the Securities and Exchange Commission (``SEC'' or
``Commission''), pursuant to Rule 9b-1 under the Securities Exchange
Act of 1934 (``Act''),\1\ five definitive copies of a Supplement to its
options disclosure document (``ODD''), which describes, among other
things, the risks and characteristics of trading in flexibly structured
options overlying individual stocks (``FLEX Equity Options'').
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\1\ 17 CFR 240.9b-1.
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The ODD currently contains general disclosures on the
characteristics and risks of trading flexibly structured options
(``FLEX Options''). At the time the FLEX Options disclosure was
approved,\2\ the Commission had approved Exchange proposals to trade
FLEX Options overlying particular indexes (``FLEX Index Options'').
Since that time, the Commission has approved Exchange proposals to
trade FLEX Equity Options.\3\ OCC now proposes this Supplement, which
is to be read in conjunction with the more general ODD entitled
``Characteristics and Risks of Standardized Options,'' that provides
disclosures to specifically accommodate the introduction of FLEX Equity
Options and to reflect current rules of the options markets on which
FLEX Equity Options are traded.\4\ Pursuant to Rule 9b-1, the
Supplement will have to be provided to investors in FLEX Equity Options
before their accounts are approved for FLEX Equity Options transactions
or their orders for FLEX Equity Options are accepted.
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\2\ See Securities Exchange Act Release Nos. 31910 (February 23,
1993), 58 FR 12056 (March 2, 1993), 31919 (February 24, 1993), 58 FR
12286 (March 3, 1993), and 33582 (February 4, 1994), 61 FR 6661
(February 11, 1994).
\3\ See Securities Exchange Act Release Nos. 36841 (February 14,
1996) (File Nos. SR-CBOE-95-43 and SR-PSE-95-24) and 37336 (June 19,
1996 (File No. SR-Amex-95-57) (orders approving the listing and
trading of FLEX Equity Options, and designating FLEX Equity Options
as standardized options pursuant to Rule 9b-1 under the Act. See
also Securities Exchange Act Release No. 37630 (September 3, 1996)
(File No. SR-OCC-96-03).
\4\ See e.g., Securities Exchange Act Release No. 37726
(September 25, 1996) (File Nos. SR-Amex-96-29, SR-CBOE-96-56, and
SR-PSE-96-31) (order approving proposals to restrict the available
exercise prices for FLEX equity call options).
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The Commission has reviewed the ODD Supplement and finds that it
complies with Rule 9b-1 under the Act. The Supplement is intended to be
read in conjunction with the ODD, which discusses the characteristics
and risks of options, including FLEX Options, generally. The Supplement
provides additional information regarding FLEX Equity Options
sufficient to further describe the special characteristics and risks of
these products.
Rule 9b-1 provides that an options market must file five
preliminary copies of an amended ODD with the Commission at least 30
days prior to the date definitive copies of the ODD are furnished to
customers, unless the Commission determines otherwise, having due
regard to the adequacy of information disclosed and the protection of
investors.\5\ The Commission has reviewed the Supplement, and finds
that it is consistent with the protection of investors and in the
public interest to allow the distribution of the Supplement as of the
date of this order.
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\5\ This provision is intended to permit the Commission either
to accelerate or extend the time period in which definitive copies
of a disclosure document may be distributed to the public.
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It is therefore ordered, pursuant to Rule 9b-1 under the Act,\6\
that the proposed Supplement regarding FLEX Equity Options is approved,
on an accelerated basis.
\6\ 17 CFR 240.9b-1.
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For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(39).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-27094 Filed 10-22-96; 8:45 am]
BILLING CODE 8010-01-M