[Federal Register Volume 62, Number 199 (Wednesday, October 15, 1997)]
[Notices]
[Pages 53672-53673]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-27282]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39219; File No. SR-CBOE-97-51]
October 8, 1997.


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Chicago Board Options Exchange, Inc., Relating to 
Gratuities

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act'' or ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on September 25, 1997, 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.
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    \1\ 15 U.S.C. Sec. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Exchange Rule 4.4 (``Rule'') 
governing gratuities. 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 self-regulatory organization 
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 self-regulatory organization 
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 change to Rule 4.4 is to increase the 
dollar value, from $50.00 to $100.00, of gratuities or compensation 
that may be given in any one year by an Exchange member to an Exchange 
employee without the prior consent of the Exchange. Gratuities are 
gifts of any kind, including, but not limited to, cash. Gratuities or 
compensation in an amount less than those specified in the Rule do not 
require any prior consent.
    Currently, pursuant to Rule 4.4, the amount permitted under the 
Rule to be given by a CBOE member to an employee of any other member or 
of any non-member broker, dealer, bank or institution, without the 
prior consent of the employer and of the Exchange is $100, and the 
amount permitted to be given by a CBOE member to an Exchange employee 
without prior Exchange permission is $50. The CBOE proposes to increase 
the amount permitted to be given by a CBOE member to an Exchange 
employee from $50 to $100. The purpose of this change is to account for 
inflation that has occurred since the $50 amount was established in 
1980.
    Also, the rule language is being revised to clarify that Exchange 
consent is required if a member wants to give a gratuity of over $100 
to an Exchange employee. The Exchange proposes to change the current 
construction of the Rule in order to clarify that the final phrase 
requiring consent refers to both Exchange employees, as well as 
employees of any other member or of any non-member broker, dealer, bank 
or institution.
2. Statutory Basis
    The Exchange represents that the proposed rule change is consistent 
with Section 6(b)(5) of the Act \3\ in that it promotes just and 
equitable principles of trade, fosters cooperation among persons 
engaged in facilitating securities transactions, and protects investors 
and the public interest.
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    \3\ 15 U.S.C. Sec. 78f(b).
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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.

[[Page 53673]]

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

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 self-regulatory organization 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. In addition, the Commission 
encourages commenters to consider whether: (1) The acceptance of cash 
or its equivalent should be permitted in any circumstance; (2) there 
are presently adequate safeguards against the solicitation of 
gratuities; and (3) all offers of gratuities, whether accepted or not, 
should be recorded in a timely manner by the employee, and such records 
should be maintained by his employer. 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 Room. Copies of such 
filing will also be available for inspection and copying at the 
principal office of the Exchange. All submissions should refer to File 
No. SR-CBOE-97-51 and should be submitted by November 5, 1997.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\4\
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    \4\ 17 CFR 200.20-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-27282 Filed 10-14-97; 8:45 am]
BILLING CODE 8010-01-M