[Federal Register Volume 63, Number 65 (Monday, April 6, 1998)]
[Notices]
[Pages 16839-16840]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8923]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39809; File No. SR-CBOE-98-10]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by Chicago Board Options 
Exchange, Incorporated Related to Fees for Applicants for Membership 
and Existing Members Who Are Subject to a Statutory Disqualification

March 26, 1998.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ notice is hereby given that on March 10, 1998, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The CBOE proposes to adopt two new fees applicable to persons 
subject to a statutory disqualification under the Act on whose behalf 
the Exchange is obligated to file notice with the SEC pursuant to Rule 
19h-1 under the Act.\2\
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    \2\ 17 CFR 240.19h-1.
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    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, 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

    The purpose of the proposed rule change is to adopt two new fees 
that are intended to defray some of the expenses incurred by the 
Exchange in connection with applicants for membership and existing 
members who are subject to a statutory disqualification. The first new 
fee applies to any person who submits an application to the Exchange 
seeking to become a member or an associated person of a member or to 
continue as a member or in association with a member notwithstanding a 
statutory disqualification. The second new fee applies to any person 
who has been approved for membership or association with a member 
notwithstanding a statutory disqualification, and who subsequently 
seeks a change in status that, if approved, would require another 
filing to be made pursuant to Rule 19h-1(c) under the Act.\3\ These two 
new fees would be in addition to any other Exchange membership fees 
that might be applicable.
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    \3\ 17 CFR 240.19h-1(c).
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    Pursuant to Rule 19h-1 under the Act, the Exchange must file a 
notice with the Commission if the Exchange proposes to continue in or 
to admit into membership or association with a member any person 
subject to a statutory disqualification. Evaluating the circumstances 
of the statutory disqualification and the appropriateness of permitting 
the member or associated person to continue in or be admitted to 
membership or association with a member, and filing this notice with 
the Commission, requires effort and time by the Exchange staff and thus 
creates an expense for the Exchange. The Exchange believes it is 
appropriate for the applicant, member, or person associated with a 
member who is subject to a statutory disqualification to pay a fee that 
will offset at least a portion of these expenses. The Exchange believes 
that a fee in the amount of $2,500 is appropriate for this purpose.
    After the Rule 19h-1 notice process has been completed and the 
necessary approvals have been obtained, if the member or associated 
person wants to change the status previously approved and the Exchange 
approves of this change, then the Exchange typically must file an 
amended or additional notice with the Commission pursuant Rule 19h-
1(c). Once again the Exchange will incur the time and expense of 
complying with Rule 19h-1 on behalf of the member or associated person. 
The Exchange believes it is appropriate for the member or associated 
person who makes an application that, if approved, will make it 
necessary for the Exchange to undertake the filing of an amended 19h-
1(c) notice to pay a fee to offset these expenses at least in part. 
Therefore, the proposed rule change would authorize the Exchange to 
charge a fee of $1,500 to any member or associated person on whose 
behalf the Exchange has filed a Rule 19h-1 filing that has been 
approved by the Commission who applies for a change in status that will 
require the Exchange to file an amended or additional Rule 19h-1(c) 
filing if the Exchange approves the requested change in status.
    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 charges among CBOE 
members.

B. Self-Regulatory Organization's Statement on Burden on Competition

    CBOE 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.

[[Page 16840]]

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    The proposed rule change has become effective upon filing pursuant 
to Section 19(b)(3)(A)(ii) of the Act, and subparagraph (e) of Rule 
19b-4 thereunder, in that it is designated by the Exchange as 
establishing a due, fee, or other charge. 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, NW., Washington, DC 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 Room. Copies of such filing will also be 
available for inspection and copying at the principal office of CBOE. 
All submissions should refer to the file number in the captain above 
and should be submitted by April 28, 1998.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\4\
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    \4\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-8923 Filed 4-3-98; 8:45 am]
BILLING CODE 8010-01-M