[Federal Register Volume 63, Number 49 (Friday, March 13, 1998)]
[Notices]
[Page 12558]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-6526]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39728; File No. SR-CBOE-98-02]


Self-Regulatory Organizations; Order Granting Approval of 
Proposed Rule Change by the Chicago Board Options Exchange, Inc. to 
Limit the Number of Consecutive Terms That May Be Served by the 
Chairman of the Executive Committee

March 6, 1998.

I. Introduction

    On January 16, 1998, the Chicago Board Options Exchange, Inc. 
(``CBOE'' or ``Exchange'') submitted to the Securities and Exchange 
Commission (``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of 
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ proposed rule change to amend Section 8.1(a) of the CBOE 
Constitution to limit the number of consecutive terms served by the 
Chairman of the Executive Committee. The proposed rule change was 
published for comment in the Federal Register on February 3, 1998.\3\ 
No comments were received regarding the proposal. This order approves 
the proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 39585 (January 27, 
1998), 63 FR 5584.
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II. Description of the Proposal

    Presently, the Chairman of the Executive Committee (``Chairman'') 
is elected to a one-year term and may serve an unlimited number of 
consecutive terms. Under the proposed rule change, an amendment to 
Section 8.1 of the CBOE Constitution, the Chairman could serve 
consecutively a maximum of three one-year terms. For purposes of this 
limit, a combination of at least six months of a one-year term plus the 
next two one-year terms is considered to be three consecutive one-year 
terms. After an individual has been out of office for at least six 
months, that individual again becomes eligible to serve as Chairman.

III. Discussion

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of section 6 of the Act. In 
particular, the Commission believes the proposal is consistent with 
Section 6(b)(3) of the Act.\4\ Section 6(b)(3) requires, among other 
things, that the rules of the exchange assure a fair representation of 
its members in the administration of its affairs. By limiting the 
number of consecutive terms a person may serve as Chairman, the 
proposal should help to ensure that a broader range of individuals 
serve in that position. As a result, the proposal creates the 
opportunity for a broader cross section of market participants to be 
involved in the administration of the Exchange.
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    \4\ 15 U.S.C. 78f(b)(3). In approving this rule, the Commission 
has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\5\ that the proposed rule change (SR-CBOE-98-02) is approved.

    \5\ 15 U.S.C. 78s(b)(2).
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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-6526 Filed 3-12-98; 8:45 am]
BILLING CODE 8010-01-M