[Federal Register Volume 64, Number 129 (Wednesday, July 7, 1999)]
[Notices]
[Pages 36725-36726]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17153]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41573; File No. SR-CBOE-99-23]
Self-Regulatory Organizations; Filing and Immediate Effectiveness
of Proposed Rule Change by the Chicago Board Options Exchange, Inc.
Relating to Fees for Delayed Submission of Trade Information
June 28, 1999.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on June 8, 1999, the Chicago
Board Options Exchange, Inc. (``CBOE'' or ``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. The Exchange has designated the proposed
rule change as one satisfying the requirements of paragraph (f)(6) of
Rule 19b-4 under the Act,\2\ which renders the proposal effective upon
receipt of this filing by the Commission.\3\ 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(f)(6).
\3\ Pursuant to Rule 19b-4(f)(6), the Exchange has represented
that the proposed rule change: (i) will not significantly affect the
protection of investors or the public interest; (ii) will not impose
any significant burden on competition; and (iii) will not become
operative for 30 days after the date of this filing, unless
otherwise accelerated by the Commission. The Exchange also has
provided at least five business days notice to the Commission of its
intent to file this proposed rule change, as required by Rule 19b-
4(f)(6) under the Act. Id.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The CBOE proposes to amend Rule 2.30 relating to fees for delayed
submission of trade information. 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, 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 Section 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 amend CBOE Rule 2.30
to provide that the appropriate Clearing Procedure Committee
(``Committee'') may determine, with due notice, the date when certain
time reductions will go into effect for delayed submission of trade
match information. Under the current rule, approved by the Commission
in November 1998,\4\ trade match submission time is reduced in three
phases from two (2) hours down to one (1) hour over a period of six
months. The rule states that the first time reduction will go into
effect on January 1, 1999, and will require timely trade submission to
be within ninety (90) minutes of execution. The next reduction was
scheduled to go into effect on April 1, 1999, and would require timely
trade submission to be within seventy five (75) minutes of execution.
Finally, from July 1, 1999, forward, the Exchange would have required
that timely trade submission be within one (1) hour of execution.
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\4\ See Securities Exchange Act Release No. 40729 (November 30,
1998), 63 FR 67956 (December 9, 1998).
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Due to a discrete system problem affecting the trade match system
since the inception of this Rule, the Exchange has applied an exception
under CBOE Rule 2.30(f)(1)(C)(ii), Extenuating
[[Page 36726]]
Circumstances, which excepts members from incurring a fee for delayed
trade submission. The Exchange notified its membership of this
exception in January 1999. Since that time, the Exchange has waived any
fees that members would have incurred for delayed submission of trade
information. Also, since January, the Exchange continued to believe
that these systems problems would be corrected imminently and the fee
would be reinstated on the time schedule as stated in the Rule.
The Exchange now believes that this systems problem is corrected,
and would like to begin charging the fee to members. The Exchange feels
strongly, however, that members should not be held to the 75 minute
time allotment which is to be in effect under the Rule because the 90
minutes time allotment for delayed trade submission was never in
effect. The Exchange would like to go back to the original time
schedule of phasing in the reduction, but without the dates stated in
the Rule. The Exchange proposes to allow the appropriate Committee,
with appropriate notice to the membership, to determine when the
reductions go into effect. The Exchange proposes that the Committee
give the membership 30 days notice to phase in the three reductions,
and that the Committee mandate each reduction to be not less than three
months in duration. The first reduction will go into effect as soon as
possible after this rule filing is operative, and notice will be given
in the form of a regulatory circular that will go out to the membership
with 30 days notice. In the meantime, the Exchange does not intend to
hold the membership to the standards of the Rule pending effectiveness
of this proposed change. CBOE states this proposed change will give the
Committee the flexibility to best manage the time reductions and
delayed implementation of the next phase if unforeseen circumstances
occur.
2. Statutory Basis
The Exchange finds that the proposed rule change is consistent with
Section 6(b) \5\ of the Act in general and further the objectives of
Section 6(b)(5) \6\ in particular in that it will promote just and
equitable principles of trade, protect investors and the public
interest, and remove impediments to and perfect the mechanisms of a
free and open market.\7\
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
\7\ In reviewing this proposal, the Commission has considered
the proposed rules' impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any inappropriate burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received from Members, Participants, or Others
The Exchange has neither solicited nor received written comments on
the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
This proposed rule filing has been filed by the Exchange pursuant
to Section 19(b)(3)(A)(iii) of the Act\8\ and subparagraph (f)(6) of
Rule 19b-4 thereunder.\9\ Consequently, because the foregoing proposed
rule change: (1) does not significantly affect the protection of
investors or the public interest; (2) does not impose any significant
burden on competition; and (3) does not become operative until July 8,
1999, 30 days from June 8, 1999, the date on which it was filed, and
the Exchange provided the Commission with written notice of its intent
to file the proposed rule change at least five days prior to the filing
date, it has become effective pursuant to Section 19(b)(3)(A) of the
Act and Rule 19b-4(f)(6) thereunder.
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\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 17 CFR 240.19b-4(f)(6).
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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 person 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-
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 at 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 submission should refer to File No. SR-CBOE-99-23 and should
be submitted by July 28, 1999.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-17153 Filed 7-6-99; 8:45 am]
BILLING CODE 8010-01-M