[Federal Register Volume 64, Number 89 (Monday, May 10, 1999)]
[Notices]
[Pages 25091-25092]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11597]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41357; File No. SR-CBOE-99-06]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Chicago Board Options Exchange, Inc. Relating to Options 
on the Dow Jones High Yield Select 10 Index and RAES Order Size

April 30, 1999.
    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 February 10, 1999, the Chicago Board Options Exchange, Inc. 
(``CBOE'' or ``Exchange'') filed with the Securities and Exchange 
Commission (``SEC'' or ``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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Chicago Board Options Exchange, Incorporated (``CBOE'' or 
``Exchange'') proposes to increase the maximum size of orders on the 
Dow Jones High Yield Select 10 Index (``index''), from 20 to 100 
contracts, eligible for entry into CBOE's Retail Automated Execution 
System (``RAES'').

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 propose 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 add an interpretation 
of Rule 6.8 to allow the appropriate Floor Procedure Committee 
(``FPC'') to increase the maximum size of option orders on the Dow 
Jones High Yield Select 10 Index (``Index''), from 20 to 100 contracts, 
eligible for execution through RAES. The Exchange expects this change 
to enhance the depth and liquidity of the market for options on the 
Index.
    In adopting the new RAES rule applicable to options on the Index, 
the appropriate FPC will have the discretion to set the eligible order 
size for RAES orders up to one hundred (100) contracts. The Exchange 
believes that expanding the eligible contract limit size for RAES will 
provide the benefits of more timely and cost-effective executions of 
customer orders to a greater number of orders than would be the case if 
no change were made; enhance information gathering through the audit 
trail; enhance fill reporting and price reporting; increase customer 
confidence; and reduce transactions that have to be executed manually 
on the trading floor thereby increasing the efficiency in the handling 
of non-RAES orders.
    CBOE believes that this proposed rule change will not impose any 
significant burdens on the operation, security, integrity, or capacity 
of RAES, but will increase the efficiency of Exchange operations.\3\
---------------------------------------------------------------------------

    \3\ The SEC has approved increasing interest rate option orders 
up to 100 contracts on RAES, Release No. 34-38002 (December 5, 
1996), 61 FR 65422 (December 12, 1996).
---------------------------------------------------------------------------

    By expanding the maximum size of option orders on the Dow Jones 
High Yield Select 10 Index eligible for entry through RAES from 20 up 
to 100 contracts, the proposed rule will better serve the needs of the 
CBOE's public customers and Exchange members who make a market for such 
customers and is consistent with and furthers the objectives of Section 
6(b)(5) of the Exchange Act in that it is designed to promote just and 
equitable principles of trade, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, 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 proceeding the 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.

[[Page 25092]]

Persons making written submissions should file six copies thereof with 
the Secretary, Securities and Exchange Commission, 450 Fifth Street, 
NW., Washington, DC 20549-0609. 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 the CBOE. All 
submissions should refer to File No. SR-CBOE-99-06 and should be 
submitted by June 1, 1999.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\4\
---------------------------------------------------------------------------

    \4\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-11597 Filed 5-7-99; 8:45 am]
BILLING CODE 8010-01-M