[Federal Register Volume 62, Number 238 (Thursday, December 11, 1997)]
[Notices]
[Pages 65299-65300]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32367]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39389; File No. SR-CBOE-97-60]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Board Options 
Exchange, Inc., Relating to Transaction Fees for Options on the 
Standard & Poor's 100 Stock Index

December 3, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on November 20, 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 CBOE. 
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. 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 CBOE proposes to modify the Exchange transaction fees 
applicable to transactions in options on the Standard & Poor's 100 
Stock Index (``OEX'').

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

1. Purpose
    The Exchange recently filed with the Commission a proposed rule 
change \3\ in which the Exchange informed the Commission that Standard 
& Poor's (``S&P'') intended to reduce the value of its S&P 100 Stock 
Index (``Index'') to one-half of its present value by doubling the 
divisor used in calculating the Index.\4\ In connection with the 
``split'' of the OEX, the Exchange has evaluated the appropriateness of 
the current fee schedule and has determined to reduce the transaction 
fees applicable to transactions in OEX. The current and proposed 
transaction fees absent any reduction or rebate \5\ are: (1) For 
customer trades for options with a premium less than $1--current: $0.20 
per contract side; proposed: $0.15 per contract side; (2) for customer 
trades of options with a premium equal to or greater than $1--current: 
$0.40 per contract side; proposed: $0.30 per contract side; (3) for 
member firm proprietary trades--current: $0.10 per contract side: 
proposal: $0.06 per contract side; and (4) for market-maker trades--
current: $.06 per contract side; proposed: $.05 per contract side. 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 these fee changes.
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    \3\ The Commission approved the proposed rule change on November 
19, 1997. See Securities Exchange Act Release No. 39338, 62 FR 63209 
(November 26,1997) (order approving File No. SR-CBOE-97-48).
    \4\ According to the Exchange, the value of the Index was 
reduced by one-half effective November 24, 1997. Telephone 
conversation between Timothy Thompson, Senior Attorney, CBOE, and 
Deborah Flynn, Division of Market Regulation, Commission, on 
December 2, 1997.
    \5\ 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 fee reduction for transactions in OEX 
options in order to promote trading in these options after the split in 
OEX. The Exchange believes that the reduction in the fees may encourage 
more participation in the trading of these options.

[[Page 65300]]

2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\6\ in general, and furthers the objectives of Section 6(b)(4) of 
the Act \7\ in particular, in that it is designed to provide for the 
equitable allocation of reasonable dues, fees, and other changes among 
CBOE members.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78(b)(4).
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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 a 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

    The foregoing rule change establishes or changes a due, fee, or 
other charge imposed by the Exchange and therefore has become effective 
pursuant to Section 19(b)(3)(A) of the Act \8\ and subparagraph (e) of 
Rule 19b-4 \9\ thereunder. At any time within 60 days of the filing of 
such 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 proposes of the Act.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 19b-4(e).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing. Persons making written submission 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street NW., Washington, DC 20549. Copies 
of the submissions, 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 Room, 450 Fifth Street NW., Washington, 
DC. Copies of such filing also will be available for inspection and 
copying at the CBOE. All submissions should refer to File No. SR-CBOE-
97-60 and should be submitted by January 2, 1998.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-32367 Filed 12-10-97; 8:45 am]
BILLING CODE 8010-01-M