[Federal Register Volume 64, Number 173 (Wednesday, September 8, 1999)]
[Notices]
[Pages 48888-48889]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23238]
[[Page 48888]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41811; File No. SR-CBOE-99-46]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Chicago Board Options
Exchange, Inc. Relating to Market-Maker Surcharges
August 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 August 23, 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. On August
23, 1999, the CBOE filed with the Commission Amendment No. 1 to the
proposed rule change.\3\ The Commission is publishing this notice to
solicit comments on the proposed rule change, as amended, from
interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ In Amendment No. 1, the Exchange eliminated a proposed
surcharge in an options class that is no longer eligible for the
surcharge program. See letter from Stephanie C. Mullins, Attorney,
CBO, to Kenneth Rosen, Attorney, Division of market Regulation,
Commission, dated August 23, 1999 (``Amendment No. 1'').
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The CBOE is proposing to make changes to its fee schedule pursuant
to CBOE Rule 2.40, Market-Maker Surcharge for Brokerage.\4\
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\4\ See Securities Exchange Act Release No. 41121 (February 26,
1999), 64 FR 11523 (March 9, 1999) (order approving CBOE Rule 2.40).
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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
Pursuant to CBOE Rule 2.40, on August 20, 1999, the Equity Floor
Procedure Committee approved the following fees for the following
option classes:
------------------------------------------------------------------------
Order book
Market-maker official
Option class surcharge (per brokerage rate
contract) (per contract)
\5\
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Coca-Cola (KO).......................... $0.03 $0.00
Johnson and Johnson (JNJ)............... 0.07 0.00
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These fees will be assessed on Monday, August 23, 1999. Exchange
Rules provide that an option be listed for trading on another exchange
before a surcharge fee can be assessed. Thus, since these classes have
been certified by the Options Clearing Corporation to be listed on the
Philadelphia Stock Exchange, and are proposed to be listed for trading
on Monday August 23, 1999, the CBOE will assess these three surcharges
on that date. The Exchange interprets its rules to allow the Equity
Floor Procedure Committee to vote on market-maker surcharges before the
class has been listed for trading on another exchange. However, the
Rule provides that the surcharge may not actually be assessed until the
class has been listed for trading on another exchange. These fees will
remain in effect until such time as the Equity Floor Procedure
Committee or the Board determines to change these fees and files the
appropriate rule change with the Commission.
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\5\ The surcharge will be used to reimburse the Exchange for the
reduction in the Order Book Official brokerage rate from $0.20 in
the relevant option classes. Any remaining funds will be paid to
Stationary Floor Brokers as provided in Exchange Rule 2.40.
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act, in general, and furthers the objectives of Section 6(b)(4) \6\ 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.
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\6\ 15 U.S.C. 78f(b)(4).
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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 burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received from members, Participants, or Others
Not 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
The foregoing rule change establishes or changes a due, fee, or
other charge imposed by the Exchange and, therefore, has become
effective pursuant to Section 19(b)(3)(A)(ii) \7\ of the Act and
subparagraph (f)(2) of Rule 18b-4 thereunder.\8\ At any time within 60
days of the date of 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.\9\
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\7\ 15 U.S.C. 78s(b)(3)(A)(ii).
\8\ 17 CFR 240.19b-4(f)(2).
\9\ In reviewing this proposal, the Commission has considered
the proposal's impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
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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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange
[[Page 48889]]
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 submissions should refer to File No. SR-CBOE-99-46 and should
be submitted by September 29, 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. 99-23238 Filed 9-7-99; 8:45 am]
BILLING CODE 8010-01-M