[Federal Register Volume 63, Number 83 (Thursday, April 30, 1998)]
[Notices]
[Pages 23820-23821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-11515]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39911; File No. SR-CBOE-98-07]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Chicago Board Options Exchange, Incorporated Relating to 
the Committee Responsible for Governing RAES Participant in SPX

April 24, 1998.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934, U.S.C. 78s(b)(1), notice is hereby given that on February 20, 
1998, the Chicago Board Options Exchange, Incorporated (``CBOE'' or the 
``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. CBOE filed 
an amendment on April 15, 1998, requesting that the filing be handled 
as a regular way filing under Section 19(b)(2) of the Act.\1\ The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ See, letter from Timothy H. Thompson, Director, Regulatory 
Affairs, Legal Department, Chicago Board Options Exchange to 
Victoria Berberi-Doumar, Division of Market Regulation, SEC, dated 
April 15, 1998.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    the CBOE proposes to change the Committee responsible for governing 
RAES eligibility in options on the Standard & Poor's 500 Index 
(``SPX'') from the appropriate Floor Procedure Committee to the 
appropriate Market Performance Committee. 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, Proposed Rule Change

1. Purpose
    The Exchange has decided to change the body governing eligibility 
for RAES in SPX from the appropriate Floor Procedure Committee to the 
appropriate Market Performance Committee. Currently, SPX is the only 
options class in which the issues concerning the eligibility of market-
makers to participate in RAES is governed by a Floor Procedure 
Committee instead of by a Market Performance Committee. Rule 8.16 (in 
the case of option classes other than OEX \2\, SPX, and DJX \3\) and 
Rule 24.17 (in the case of OEX and DJX option classes) provide that the 
appropriate Market Performance Committee will govern the RAES market-
maker eligibility issues. This change, therefore, will make the 
regulation of SPX RAES eligibility consistent with that of the other 
option classes traded on the Exchange. The governance of eligibility 
issues for SPX RAES will initially be delegated to the newly formed 
Index Market Performance Committee.
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    \2\ OEX stands for options on the Standard & Poor's 100 Index.
    \3\ DJX stands for options on the Dow Jones Industrial Average.
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    As with the other options classes, the Index Market Performance 
Committee will have authority to exempt market-markers from: the 
requirement that the market-maker be present in the crowd to log onto 
or remain on RAES (Rule 24.16(a)(iii)), the requirement that the 
market-maker must log onto RAES at any time during an expiration month 
when he is present in the crowd and when he has logged on previously 
during that expiration month (Rule 24.16(b)), certain requirements 
concerning the participation of joint accounts (Rule 24.16(c)), and 
certain requirements concerning the participation of member 
organizations with multiple nominees (Rule 24.16(d)). The Index Market 
Performance Committee will also take over the broader authority of the 
SPX Floor Procedure Committee to set the maximum number of RAES 
participants in RAES groups, to disallow the participation of certain 
RAES groups

[[Page 23821]]

(Rule 24.16(e)), to require market-makers of the trading crowd to log 
onto RAES if there is inadequate participation (Rule 24.16(f)), and to 
take other remedial action as appropriate (Rule 24.16(g)).
2. Statutory Basis
    By moving the authority for the governance of RAES eligibility 
issues in SPX from a Floor Procedure Committee to a Market Performance 
Committee, thus, making SPX RAES consistent with RAES for the other 
option classes traded on the Exchange, the proposed rule change is 
consistent with Section 6 of the Act in general and Section 6(b)(5) in 
particular in that it is designed to promote just and equitable 
principles of trade and to protect investors and the public interest.

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.

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

    Within 35 days of the date of 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 such 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, including whether the proposed rule 
change is consistent with the Act. 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. 552, will be available for inspection and copying in the 
Commission's Public Reference Room, 450 Fifth Street, N.W., Washington, 
D.C. 20549. Copies of such filing will also be available for inspection 
and copying at the principal office of the CBOE. All submissions should 
refer to File No. SR-CBOE-98-07 and should be submitted by May 21, 
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. 98-11515 Filed 4-29-98; 8:45 am]
BILLING CODE 8010-01-M