[Federal Register Volume 64, Number 94 (Monday, May 17, 1999)]
[Notices]
[Pages 26808-26809]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-12355]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41389; File No. SR-CBOE-99-18]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Chicago Board Options
Exchange, Incorporated, To Terminate its Lease Deposit Fee Program
May 11, 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 April 26, 1999, 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).
\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 terminate its $500 lease deposit fee
requirement. The requirement is currently set forth in CBOE's
Membership Fee Circular and would be deleted from that Circular under
this proposal.
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 purpose of the proposed rule change is to terminate CBOE's
lease deposit fee program. Under this program, every CBOE member that
is a lessee of a CBOE membership, a member organization nominee on a
leased CBOE membership, or a Chicago Board of Trade (``CBOT'')
Exerciser member of CBOE who is leasing a CBOT membership (a CBOT
delegate) is required to submit a $500 lease deposit fee to the
Exchange. The Exchange uses this lease deposit fee to satisfy any debts
owed by the member to the Exchange upon the member's termination from
membership. Upon the completion of the membership termination process,
the Exchange returns to the lessee, nominee, or delegate, without
interest, any portion of the lease deposit fee remaining after payment
of any Exchange debts owed by the lessee, nominee, or delegate.
The original purpose of the lease deposit fee program was to
provide the Exchange with a source of collateral in the event a lessee,
nominee, or delegate owed money to the Exchange. The Exchange is now
proposing to eliminate the program because the costs of administering
the program have been exceeding the benefits derived from the program.
Additionally, the Exchange has other means of collecting monies owed to
the Exchange by members, including lessees, nominees, and delegates.
These include CBOE's Integrated Billing System under CBOE Rule 3.23
pursuant to which a member's Exchange fees are drafted by the Exchange
against a CBOE Clearing Member designated by the member, the
requirement under CBOE Rule 3.8(a)(2) that a member organization
guarantee its nominees' obligations to the Exchange, and the authority
of the Chairman of the Exchange's Executive Committee to suspend a
current member (or bar a former member) until payment of past due
amounts owed to the Exchange is made.
2. Statutory Basis
The CBOE believes the proposed rule change is consistent with
Section 6(b) of the Act,\3\ in general, furthers the objectives of
Section 6(b)(4) of the Act,\4\ in particular, in that it is designed to
provide for the equitable allocation of reasonable dues, fees, and
other charges among CBOE members.
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\3\ 15 U.S.C. 78f.
\4\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The 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
Because the foregoing rule change establishes or changes a due,
fee, or other charge imposed by the Exchange, it has become effective
pursuant to Section 19(b)(3)(A) of the Act\5\ and subparagraph (f) of
Rule 19b-4 thereunder.\6\ 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 such rule change if it appears to the
Commission that such action is necessary or appropriate in the
protection of investors, or otherwise in furtherance of the Act.
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\5\ 15 U.S.C. 78s(b)(3)(A).
\6\ 17 CFR 240.19b-4(f)(2).
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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.\7\ Persons making written
submissions should file six copies thereof with the Secretary,
Securities and Exchange Commission, 450 Fifth Street, N.W., Washington,
D.C. 20549-0609. 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 also will be available for inspection and copying at the
principal office of the CBOE. All submissions should refer to File No.
SR-CBOE-99-18 and should be submitted by June 7, 1999.
\7\ In reviewing the proposed rule change, the Commission
considered its potential impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
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[[Page 26809]]
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-12355 Filed 5-14-99; 8:45 am]
BILLING CODE 8010-01-M