[Federal Register Volume 64, Number 181 (Monday, September 20, 1999)]
[Notices]
[Pages 50845-50846]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-24351]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41856; File No. SR-CBOE-99-49]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Board Options 
Exchange, Inc. Amending the Market-Maker Surcharge Fee Schedule

September 10, 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 31, 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 
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 CBOE is proposing to make changes to its fee schedule pursuant 
to CBOE Rule 2.40, Market-Maker Surcharge for Brokerage.\3\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 41121 (February 26, 
1999), 64 FR 11523 (March 9, 1999) (order approving CBOE Rule 2.40).
---------------------------------------------------------------------------

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 30, 1999, the Equity Floor 
Procedure Committee (``Committee'') approved the following fees for the 
option classes listed in the chart below. The Order Book Official 
Brokerage Rate (per contract) shall be set at $.00 for these option 
classes.\4\
---------------------------------------------------------------------------

    \4\ The surcharge will be used to reimburse the Exchange for the 
reduction in the Order Book Official brokerage rate (per contract) 
from $.20 to $.00 in the relevant option classes. Any remaining 
funds generated by the surcharge will be paid to Stationary Floor 
Brokers as provided in Exchange Rule 2.40.

------------------------------------------------------------------------
                                                                Market-
                                                                 maker
                        Option class                           surcharge
                                                                 (per
                                                               contract)
------------------------------------------------------------------------
EMC Corporation (EMC).......................................       $0.15
Eastman Kodak Co. (EK)......................................        0.15
Merck & Co., Inc. (MRK).....................................        0.10
------------------------------------------------------------------------

    These fees will be effective as of August 31, 1999. Exchange rules 
provide that an option be listed for trading on another exchange before 
a surcharge fee can be assessed. Since the option classes listed above 
have been certified by the Options Clearing Corporation to be listed on 
the Philadelphia Stock Exchange, Inc., and were subsequently listed for 
trading on August 31, 1999, the CBOE will assess these three surcharges 
beginning on that date. The Exchange interprets its rules to allow the 
Committee to vote on market-maker surcharges before the relevant option 
class has been listed for trading on another exchange. However, CBOE 
Rule 2.40 provides that the surcharge may not actually be assessed 
until the relevant class has been listed for trading on another 
exchange.
    These fees will remain in effect until such time as the Committee 
or the Board determines to change these fees and file the appropriate 
rule change with the Commission.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b)(4)\5\ of the Act because it is designed to provide for the 
equitable allocation of reasonable dues, fees, and other charges among 
CBOE members.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

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 that is not necessary or appropriate 
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments on the proposed rule change were neither solicited 
nor received.

[[Page 50846]]

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)\6\ of the Act and 
subparagraph (f)(2) of Rule 19b-4 thereunder.\7\ 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.\8\
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \7\ 17 CFR 240.19b-4(f)(2).
    \8\ In reviewing this proposal, the Commission has considered 
the proposal's impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

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, 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 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-99-49 and should 
be submitted by October 12, 1999.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-24351 Filed 9-17-99; 8:45 am]
BILLING CODE 8010-01-M