[Federal Register Volume 62, Number 83 (Wednesday, April 30, 1997)]
[Notices]
[Pages 23516-23519]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11086]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-38541; File No. SR-CBOE-97-14]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Inc., Order Approving Proposed Rule Change Relating to the Issuance of 
Trading Permits and Other Procedures Resulting from the Transfer of the 
Options Business of the New York Stock Exchange to the Chicago Board 
Options Exchange

April 23, 1997.

I. Introduction

    On March 3, 1997, the Chicago Board Options Exchange, Inc., 
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'' or ``SEC'') pursuant to Section 19(b)(1) of 
the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 
thereunder \2\ a proposed rule change relating to issues arising from 
the transfer of the New York Stock Exchange's (``NYSE'') options 
business to the CBOE. The proposed rule change was published for 
comment in Securities Exchange Act Release No. 38375 (March 7, 1997), 
62 FR 12667 (March 17, 1997). The Commission received two comment 
letters in response to the proposal.\3\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Letters from Simon Erlich, Option Member, NYSE to Commission 
(March 10, 1997) (``Erlich Letter); Michael Schwartz, Chairman, 
Committee on Options Proposals, to Jonathan G. Katz, Secretary, 
Commission (April 8, 1997) (``COOP Letter'').
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II. Description of the Proposal

    The purpose of the proposed rule change is to authorize the 
issuance of 75 ``Options Trading Permits'' (``Permits'') in connection 
with the proposed transfer of the NYSE's options business to CBOE, and 
to define the rights and obligations associated with such Permits.\4\ 
In addition, the proposed rule change amends CBOE rules as necessary to 
provide for the trading on CBOE of options on the NYSE Composite Index. 
The 75 Permits are proposed to be issued pursuant to the terms of an 
agreement between CBOE and NYSE. The agreement represents the 
culmination of a process initiated by NYSE in the summer of 1996 when 
it announced that it intended to discontinue its options business. At 
that time, NYSE invited interested parties wishing to continue NYSE's 
options business to bid for its acquisition by offering trading rights 
and other benefits to NYSE members, including payment for the ``going 
business'' value of the business to be acquired. Based on its bid in 
response to NYSE's invitation, NYSE determined to enter into exclusive 
negotiations with CBOE. A definitive agreement between CBOE and NYSE 
(``Transfer Agreement'') was executed as of February 5, 1997.\5\
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    \4\ See also Securities Exchange Act Release No. 38376 (March 7, 
1997), 62 FR 12671 (March 17, 1997) (notice of filing of proposed 
rule change regarding the transfer of the NYSE options business to 
the CBOE).
    \5\ A copy of the Agreement is attached as Exhibit B to File No. 
SR-CBOE-97-14 and is available for review at the Office of the 
Secretary of CBOE, and in the Public Reference Room of the 
Commission.
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    The Transfer Agreement contemplates that trading in NYSE Options 
\6\ will commence on the CBOE trading floor on April 28, 1997, 
(``Effective Date''), subject to the fulfillment of specified 
conditions and the approval of this proposed rule change and the 
parallel filing by NYSE.\7\ The Transfer Agreement provides that CBOE 
will pay $5,000,000 as the purchase price for the business to be 
transferred, of which $1,200,000 will be retained by NYSE to cover its 
costs associated with the termination of its options activities and as 
payment for a ten-year license granted to CBOE to enable it to trade 
options on the NYSE Composite Index, and $3,800,000 net of a tax 
reserve will be distributed pro rata to all NYSE members, or the NYSE 
Foundation, depending on the tax treatment by the Internal Revenue 
Service.\8\
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    \6\ ``NYSE Options'' are defined as those classes of options 
that were traded on NYSE immediately prior to the Effective Date and 
not then also traded on CBOE, and those classes of options on at 
least 14 additional underlying stocks which CBOE has agreed to 
designate as NYSE Options during each of the seven years following 
the Effective Date.
    \7\ On April 23, 1997, the Commission approved the NYSE filing. 
See Securities Exchange Act Release No. 38542 (April 23, 1997).
    \8\ Details of the cash distribution to NYSE members were 
described in Item 3 of the parallel proposed rule change filed by 
NYSE.
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    The Transfer Agreement also provides that CBOE will issue up to a 
total of 75 Permits to those NYSE specialist and non-specialist firms 
and sole proprietors who operated pursuant to options trading rights on 
NYSE on December 5, 1996, and who agree to transfer their options 
activities to CBOE. In the case of a NYSE specialist, the specialist 
firm may select any qualified person to act as its nominee on CBOE. In 
the case of a non-specialist, the individual acting pursuant to an 
options trading badge on NYSE on December 5, 1996, must personally 
relocate to Chicago in order to receive a Permit. If less than 75 
Permits are issued to NYSE specialists and non-specialists, the 
Transfer Agreement provides that the difference between 75 Permits and 
the number of Permits so issued will be deposited in a lease pool to be 
leased to qualified persons who wish to trade NYSE Options on CBOE. The 
proceeds from the lease of these Permits will be paid to certain 
designated persons who held options trading rights on NYSE, as 
described below.
    The issuance of 75 Permits is proposed to be authorized pursuant to 
a new Section 2(e) to the Exchange's Constitution. That section 
provides that all Permits expire on the seventh anniversary of the date 
when trading begins on the floor of CBOE in NYSE Options. It also 
specifies that Permit holders shall have none of the rights of members 
except as specified in the Rules of the Exchange.
    The rights and obligations of holders of Permits are set forth in 
proposed new Exchange Rule 3.27, which incorporates by reference many 
of the other rules of the Exchange pertaining to the rights and 
obligations of Exchange members generally. Subparagraph (a)(1) of Rule 
3.27 reflects the terms of the Transfer Agreement by providing that 
NYSE non-specialist firms and sole proprietors who were engaged in 
business on the options floor of NYSE immediately prior to the 
Effective Date are entitled to the same number of Permits as the number 
of options floor badges they held on NYSE on December 5, 1996, but that 
each individual who held an NYSE Options floor badge and acted as a 
non-specialist must personally relocate to Chicago in order to be 
entitled to a Permit in respect of that badge. Subparagraph (a)(2) 
provides that each specialist firm engaged in business on the options 
floor of NYSE is likewise entitled to the same number of Permits as the 
number of options floor badges they held on NYSE, and that, subject to 
the rules of CBOE, each such firm may designate any qualified person to 
be the firm's nominee on CBOE.
    Subparagraph (a)(3) of Rule 3.27 describes the terms of the lease 
pool pursuant to which any of the 75 Permits not issued to NYSE members 
active on the NYSE options floor, or any so issued but subsequently 
surrendered, will be leased by CBOE through an auction or other 
competitive process. The lease proceeds would ordinarily be paid to 
those persons identified by NYSE as having used or leased NYSE Options 
trading rights on December 5, 1996, or holders of options trading 
rights that,

[[Page 23517]]

while not so used or leased, were formally separated from their NYSE 
memberships on that date, or transferees of such persons.
    Subparagraph (a)(4) of Rule 3.27 provides that if a Permit issued 
to a Options badge holder is not used during the first year following 
the Effective Date, the Permit shall be surrendered, and shall be added 
to the lease pool described above, unless the inactivity of the Permit 
has been consented to by CBOE.
    Subparagraph (a)(5) of Rule 3.27 provides that Permits issued to 
NYSE Options badge holders pursuant to subparagraphs (a) (1) and (2) 
are not transferable for one year following the Effective Date, except 
as consented to by the Exchange in the event of death, hardship or 
certain successions in ownership. Following this one year period, 
Permits are freely transferable in accordance with Exchange rules 
governing the transfer of memberships generally.
    Paragraph (b) of Rule 3.27 describes the trading rights to which 
the holder of a Permit is entitled. In general, these include the right 
to be admitted to the separate CBOE trading facility devoted 
exclusively to the trading of NYSE Options, as defined in the Rule, and 
to engage in the activities of a Market-Maker, Designated Primary 
Market-Maker (``DPM'') and/or Floor Broker in respect of those options, 
subject to the applicable rules of the Exchange. In addition, the 
holder of a Permit is entitled to trade by order as principal those 
classes of options traded on CBOE's regular trading floor that were 
dually traded on both CBOE and NYSE immediately prior to the Effective 
Date. Permit holders are also entitled to trade by order as principal 
all other classes of options traded on CBOE's regular trading floor, 
provided that such trades during any calendar quarter (as measured by 
contract volume) do not exceed twenty percent of the sum of the permit 
holder's total in person principal trades in Options and the Permit 
holder's principal trades by order in options that were dually traded 
on both CBOE and immediately prior to the Effective Date. Finally, a 
Permit holder is entitled to be admitted to the regular options trading 
floor in order to respond to the call of a Board Broker or Order Book 
Official for additional market-makers pursuant to Exchange Rule 7.5.
    Paragraph (c) of Rule 3.27 provides that each NYSE specialist firm 
to which a Permit is issued will be appointed as the DPM in the same 
classes of NYSE Options as those for which it was designated as a 
specialist on NYSE, subject to qualifying to act as such pursuant to 
CBOE rules. Paragraph (c) also provides that the DPMs for the 
additional classes of NYSE Options designated each year shall be chosen 
from among Permit holders. Subject to the rules of the Exchange, 
specialist firms appointed as DPMs in NYSE Options shall be entitled to 
continue to act as such during the term of the Permits, and thereafter 
if they become regular members of the Exchange. CBOE will allocate to 
the new program securities underlying at least 14 new options classes 
per year for the first seven years after the transfer.
    Paragraph (d) of Rule 3.27, together with Section 2(e) of the 
Exchange Constitution, provides that Permit holders shall have the same 
rights and obligations of members, except that they shall have no right 
to petition or vote or to be counted as part of a quorum at meetings of 
members, they shall have no interest in the assets or property of the 
Exchange, they shall not share in any distribution by the Exchange, 
they shall not participate in the Exchange's member death benefit 
program, and they shall not have the right to transact business with 
the public in any securities dealt in on the Exchange other than NYSE 
Options. Holders of Permits may serve on any committee of the Exchange 
to which they are appointed, and are deemed to be appointed market 
makers in all classes of NYSE Options pursuant to Exchange Rule 8.3.
    Paragraph (d) also provides that membership application fees shall 
be waived in connection with the approval of Permit holders or their 
nominees in connection with the original issuance of a Permit but not 
the subsequent transfer or lease of a Permit, and shall also be waived 
in connection with the approval of the initial holder or its nominee as 
a regular member of the Exchange or as the nominee of a regular member. 
Membership or nominee applications made by Permit holders or their 
nominees who are not subject to a statutory disqualification and are 
not the subjects of a self-regulatory organization investigation that 
may involve their fitness for membership shall be deemed effective for 
a temporary period of six months, so as not to interrupt their Exchange 
activities while their applications are being processed.
    CBOE also proposes to amend certain of the rules in Chapters XXIV 
and XXIVA of the Rules of the Exchange, which govern the trading of 
index options and FLEX options, respectively, in order to provide for 
the listing and trading of options on the NYSE Composite Index. 
(Hereafter, such index is referred to as the ``Index'' and such options 
as ``NYA Options''.) The Index is a capitalization-weighted index 
comprising all of the over 2,500 common stocks listed on NYSE. The 
Index is expressed in relation to the base period market value which 
has been adjusted for capitalization changes over time. The base value 
of the Index was set at 50 on December 31, 1965. NYSE will continue to 
act as the reporting authority for the Index, and CBOE will trade NYA 
Options pursuant to a license granted by NYSE.
    As traded on NYSE and as proposed to be traded on CBOE, NYA Options 
are European-style, A.M.-settled index options, strike prices for which 
are introduced at $2.50 or $5.00 intervals for strike prices below $200 
or at or above $200, respectively. The Index Multiplier for NYA Options 
is $100. CBOE proposes to apply to NYA Options the sane 45,000 contract 
position and exercise limits (no more than 25,000 contracts expiring in 
the nearest expiration month) and the same hedge exemption that 
currently apply to such options under NYSE rules. In addition to 
regular index options, CBOE proposes to provide for trading in 
Quarterly Index Expiration options (``QIX'' options), long-term and 
reduced-value long-term options (``LEAPS'' and ``reduced-value LEAPs'') 
and A.M.-settled FLEX Options on the Index pursuant to the same rules 
and procedures that currently govern trading on CBOE in these types of 
options.
    In addition, the proposed rule change includes a few corrections to 
the table of position limits set forth in Rule 24.4 in order to add 
references to classes of index options that were inadvertently omitted 
from the table when it was last revised, and a few clarifications to 
the language of Rule 24A.4(b) concerning the specification of the 
exercise settlement values for FLEX Index Options. No substantive 
changes will result from these corrections and clarifications.

III. Comments

    The Commission received two comment letters regarding the proposed 
rule change.\9\ The first commenter, Mr. Erlich, opposes the transfer 
of the options business, finding the agreement discriminatory and 
monopolistic.\10\ Mr. Erlich believes that the agreement treats 
specialists as a class over other options members, and treats lease 
pool participants with separated options trading rights less favorably 
than those lease pool participants with unseparated option trading 
rights. The commenter

[[Page 23518]]

finds the agreement monopolistic because it will result in more options 
being traded in fewer exchanges. Finally, Mr. Erlich questions how one 
exchange can sell to another exchange that which has been granted for 
free (i.e., the right to sell options).
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    \9\ See note 3 supra.
    \10\ See Erlich Letter.
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    The second commenter, the COOP, is in favor of the proposal, 
stating that the relative size of the NYSE Options program coupled with 
its lack of automatic execution capability has led to cost 
inefficiencies.\11\ The COOP believes that the efficiencies resulting 
from the consolidation of the NYSE Options market with CBOE will more 
than off-set the small reduction in intermarket competition.
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    \11\ See COOP Letter.
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IV. Discussion

    The Commission believes CBOE's proposed rule change is consistent 
with Section 6(b)(5) of the Act.\12\ Section 6(b)(5) requires, among 
other things, that the rules of an exchange be designed to promote just 
and equitable principles of trade, perfect the mechanism of a free and 
open national market system, and, in general, to further investor 
protection and the public interest.
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    \12\ 15 U.S.C. 78f(b)(5).
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    Pursuant to the terms of the Transfer Agreement, CBOE proposes to 
distribute 75 Permits to those NYSE specialist and non-specialist firms 
and sole proprietors who operated pursuant to options trading rights on 
NYSE on December 5, 1996, and who agree to transfer their options 
activities to CBOE. The Commission believes the method by which the 75 
Permits are distributed is equitable in that it will enable those 
holders of NYSE Option trading rights who actively traded NYSE Options 
as of December 5, 1996, to continue trading such options on the CBOE. 
The requirement that non-specialists must relocate to Chicago in order 
to obtain a Permit is a reasonable means of ensuring that a certain 
level NYSE Options trading expertise will be present at CBOE, and 
should help facilities the smooth transition of trading in NYSE 
Options. By contrast, NYSE specialist firms may either trade in person 
on CBOE, or appoint any qualified person to be the firm's nominee. The 
NYSE has indicated that this distinction in treatment by CBOE among 
NYSE specialist and non-specialist firms reflects CBOE's desire to 
attract experienced traders, while encouraging all options specialists 
to participate in the transfer.\13\
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    \13\ See Securities Exchange Act Release No. 38376 (March 7, 
1997), 62 FR 12671 (March 17, 1997).
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    The Commission believes it is within the reasonable business 
judgement of the CBOE to treat the two types of options traders 
differently. Due to the expertise of the specialist firms in trading 
NYSE Options, the capital commitment of the specialist firms, and the 
relationships they have established with order routing firms, it is 
reasonable for the CBOE to grant them more flexible Permits than other 
NYSE options members.
    CBOE proposes to deposit into a ``lease pool'' any of the 75 
Permits not issued to, or those Permits surrendered by, NYSE specialist 
and non-specialist firms. The Permits in the lease pool will be leased 
through an auction or other competitive process, with lease proceeds 
being paid to persons identified by the NYSE. The Commission believes 
that the creation of a lease pool and the distribution of the remaining 
Permits via a competitive process is an appropriate method for 
assessing and distributing such Permits. This will establish a 
mechanism that helps to assure that an acceptable number of options 
market making firms that trade NYSE Options, thereby promoting 
liquidity for those options. Furthermore, an auction or other 
competitive process is a fair and equitable manner of distributing the 
remaining Permits.
    CBOE is requiring Permit holders to use the Permit during the first 
year following the Effective Date or otherwise surrender the Permit to 
the lease pool. The Commission believes this will encourage Permit 
holders to utilize their trading rights, and assure that the Permits 
are being used effectively and productively in the trading of NYSE 
Options. CBOE also proposes to limit the rights of Permit holders to 
transfer the Permits for one year following the Effective Date (except 
with the consent of CBOE). This restriction also appropriately serves 
to encourage Permit holders to maximize the use of the Permits. While 
the Permit holders are restricted from transferring the Permits for one 
year from the Effective Date, they may freely transfer the Permits 
thereafter. Furthermore, NYSE specialist firms are not forbidden from 
changing their nominee. Overall, the Commission believes the 
restrictions on the transfer of Permits in the first year will provide 
an acceptable method for CBOE to obtain the trading experts of the 
Permit holders during the transition in trading of NYSE Options, 
thereby encouraging a stable trading environment for NYSE Options.
    CBOE's proposed rule change delineates clearly the trading rights 
to which holders of the Permits are entitled (i.e., as principal in 
options that were dually traded on CBOE and NYSE prior to the Effective 
Date, as well as other classes of options traded on CBOE's regular 
trading floor), and limits Permit holders' access to the separate CBOE 
trading facility, except in special instances. The Commission believes 
that the restrictions on Permit holders with regard to trading in 
former dually listed options and those options traded on CBOE's regular 
trading floor are appropriate requirements, consistent with the purpose 
of the Transfer Agreement. These limitations allow Permit holders to 
benefit from trading in dually listed options and options traded on 
CBOE's trading floor, while ensuring their concentration on the trading 
of NYSE Options. Moreover, the proposed limitations are merely 
limitations on the benefits afforded solely by the Permit. The 
Commission notes that CBOE encourages Permit holders to apply to become 
CBOE members. Once approved, such Permit holders would receive all the 
rights, and be subject to the same obligations, of other CBOE members.
    CBOE proposes to appoint each NYSE specialist firm to which a 
Permit is issued as the DPM in the same classes of NYSE Options as 
those for which it was designated as a specialist on NYSE. The 
Commission believes this will assure a certain level of expertise in 
trading the various classes of options. Moreover, it will promote 
consistency and continuity in the trading of those options, thus 
facilitating the smooth trading of the NYSE Options business on the 
CBOE.
    CBOE's proposal restricts Permit holders from transacting business 
with the public in any securities dealt in on the Exchange other than 
NYSE Options. The rule sets forth the limitations of the Permit, not 
the limitations of individuals who otherwise meet the Exchange's 
requirements, or the requirements of any other self-regulatory 
organization, for transacting such business with the public. For 
example, Permit holders who become members of the Exchange may transact 
business with the public if they meet the Exchange's requirements for 
doing so. The Commission believes this restriction is appropriate, in 
that it does not bar Permit holders, per se, but simply sets limits on 
the extent of the validity of the Permit itself.
    CBOE proposes to waive membership application fees in connection 
with an application for approval as a Permit holder, and submission of 
an application for approval as a member of the Exchange. The Commission 
believes this provision is equitable, as it provides

[[Page 23519]]

an incentive for NYSE Options firms to continue their business at CBOE, 
while encouraging them to become regular members of the Exchange. The 
Commission believes that by waiving these fees, CBOE demonstrates its 
continued support for the NYSE Options firms who will transfer their 
activities to the Exchange.
    CBOE is amending its rules regarding the trading of index options 
and FLEX options and providing for the listing and trading of the NYA 
Options. The Commission believes these changes will facilitate the 
transfer, and continued trading of, NYA Options at CBOE as they were 
traded on NYSE. CBOE proposes to provide for trading in QIX options, 
LEAPs and reduced-value Leaps and A.M.-settled FLEX Options on the 
Index pursuant to the same rules and procedures that currently govern 
trading on CBOE in these types of options. The Commission believes that 
the various types of options proposed by CBOE will enhance and 
encourage trading of NYA Options. In this regard, the Commission 
believes the rules and procedures currently governing trading on CBOE 
in these options will appropriately apply to NYA Options.
    CBOE proposes to amend the table of position limits set forth in 
Rule 24.4 to add references to classes of index options that were 
previously omitted from the table when it was last revised. Further, 
CBOE proposes to clarify the language of Rule 24A.4(b) regarding 
specification of exercise settlement values for FLEX Index Options. The 
Commission believes these changes are reasonable as they merely clarify 
existing practice and will not result in substantive changes for CBOE 
members.
    CBOE is constructing a new trading facility dedicated solely to 
NYSE Options which will be configured and equipped in the same manner 
as its existing trading floor. The surveillance and regulatory 
responsibilities resulting from the transfer of the NYSE Options 
business to CBOE are not expected to add significantly to CBOE's 
existing regulatory workload, and CBOE believes it has adequate 
resources to assume these added responsibilities. CBOE intends to add 
one additional output line to the Options Price Reporting Authority 
(``OPRA'') processor for purposes of transmitting market information 
pertaining to NYSE Options. This will not increase the total input to 
OPRA because two lines from NYSE to the OPRA processor will be 
terminated at the time of the transfer to CBOE. Based on CBOE's 
representations, the Commission believes that CBOE had adequate 
facilities and resources to provide for the trading, surveillance and 
data dissemination required to accommodate their acquisition of NYSE's 
options business.
    The Commission appreciates the concerns and interests expressed by 
the commenters. The Commission has closely examined the critical views 
of the proposal expressed in the Erlich letter, particularly that the 
transfer is discriminatory, monopolistic, and constitutes an improper 
sale of options from one exchange to another. While the Transfer 
Agreement does provide different treatment among certain NYSE members, 
the Commission believes that this appropriately reflects the enhanced 
value that certain NYSE members (i.e., options specialists) provide to 
the CBOE. Despite such distinctions, the Transfer Agreement, as a 
whole, significantly benefits a broad cross-section of NYSE options 
traders. The Commission also does not believe that the Transfer 
Agreement is monopolistic, noting that four vibrant options exchanges 
will remain after the transfer has been completed.\14\ Finally, the 
Commission disagrees with Mr. Erlich's assertion that the Transfer 
Agreement constitutes an illegal sale of a ``franchise'' in NYSE 
Options. Rather, the Commission believes that the Transfer Agreement 
provides an appropriate vehicle for the CBOE to purchase, through an 
organized transaction, a trained pool of talent with experience in the 
trading characteristics of NYSE Options. The Commission notes that any 
other options exchange may, at any time, trade all or some NYSE 
Options. The Commission believes that CBOE is providing a viable choice 
for those NYSE Option traders who desire to continue conducting an 
options business. Given NYSE's expressed intention to terminate options 
trading on its Exchange, the Commission believes that the transfer of 
the options business to CBOE will provide NYSE Options firms with 
benefits otherwise potentially unavailable if the NYSE firms were to 
negotiate individually with the CBOE.\15\
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    \14\ Of the approximately 2,800 equity options currently traded, 
more than 660 are dually or multiply listed. Moreover, the Act does 
not require that an options exchange continue its operations. The 
NYSE has made a business decision to exit the options business, and 
the Act does not provide a basis to negate the decision of a 
marginal exchange (in the options business) to discontinue its 
operations.
    \15\ The Commission also notes that any NYSE Options firm always 
had the ability to become a member of any other options exchange and 
conduct an options business on that exchange.
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    Should the NYSE decide to re-enter the options business within a 
year of the Effective Date, it has agreed to pay CBOE $500,000. The 
Commission believes this agreement is reasonable and does not 
constitute a ``noncompetition'' agreement between CBOE and NYSE, but 
instead serves to compensate CBOE for a portion of the costs associated 
with acquiring the NYSE's Options business and essentially refund the 
fee earned by the NYSE for brokering the transfer of its options 
business to the CBOE. Moreover, the payment amount is so small that it 
would not effectively serve as any deterrent to the NYSE's re-entry 
into trading NYSE Options.

V. Conclusion

    For the foregoing reasons, the Commission finds that the proposed 
rule change is consistent with the Act and the rules and regulations 
thereunder applicable to the CBOE, and in particular Section 6(b)(5).
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\16\ that the proposed rule change (File No. SR-CBOE-97-14) be and 
hereby is approved.

    \16\15 U.S.C. 78s(b)(2).
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    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-11086 Filed 4-29-97; 8:45 am]
BILLING CODE 8010-01-M