[Federal Register Volume 61, Number 213 (Friday, November 1, 1996)]
[Notices]
[Page 56586]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27997]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37871; Filed No. SR-CBOE-96-65]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Board Options 
Exchange, incorporated Relating to Exchange Fees

October 25, 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 
October 24, 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 is proposing to waive Exchange fees on transactions in 
Equity FLEX options from the start of trading of Equity FLEX options, 
which is scheduled to begin on October 24, 1996, until January 31, 
1997. 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, Proposed Rule Change

    The purpose of this proposed rule change is to waive Exchange fees 
related to transactions in Equity FLEX options from the start of 
trading of these options on the Exchange until January 31, 1997. The 
Exchange plans to begin trading Equity FLEX options on October 24, 
1996. The fees affected and the amount of the fees absent any reduction 
or rebate \1\ are: (1) Exchange transaction fees, which are $.05 per 
contract side for market-makers, $.06 for member firm proprietary 
trades, $.15 for customer trades for options under $1, and $.30 for 
customer trades for options of $1 or more; (2) trade match fees, which 
are $.04 per contract side for all trades; and (3) floor broker fees, 
which are $.03 per contract side for all trades. The foregoing fee 
changes are being implemented by the Exchange pursuant to CBOE Rule 
2.22. The Exchange will distribute a circular to its members to notify 
them of this waiver of Exchange fees.
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    \1\ The fees may actually be less than these amounts pursuant to 
the Exchange's Prospective Fee Reduction Schedule, the Customer 
Large Trade Discount Program, and rebate programs that have been 
filed with the Commission as part of the Exchange's fee schedule.
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    The Exchange is adopting this waiver of fees related to 
transactions in Equity FLEX options in order to promote trading in the 
these options at the outset of their trading on the Exchange. The 
Exchange believes that the reduction in the fees may encourage more 
participation in the trading of these options and enhance the prospect 
that Equity FLEX options will prosper on the Exchange in the future. 
The fee reduction also will place the Exchange in a position to compete 
effectively for business in Equity FLEX options with other exchanges 
trading the same product.
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) 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 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 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 File No. SR-CBOE-96-65 and should be 
submitted by November 22, 1996.

    For the Commission, by the Division of market Regulation, 
pursuant to delegated authority.\2\
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    \2\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-27997 Filed 10-31-96; 8:45 am]
BILLING CODE 8010-01-M