[Federal Register Volume 64, Number 181 (Monday, September 20, 1999)]
[Notices]
[Pages 50847-50848]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-24357]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41854; File No. SR-CBOE-99-50]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the Chicago Board Options
Exchange, Inc. To Increase the Size of Orders Eligible for Automatic
Execution for Certain Classes of Options
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
(``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.
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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 is proposing to increase the size limit of orders in
certain classes of options contracts which are eligible for entry into
the CBOE's Retail Automatic Execution System (``RAES'') in order to
match the size limits of orders which will be eligible for entry into
the automatic execution system of the Philadelphia Stock Exchange
(``Phlx'').
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 receive 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
[[Page 50848]]
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
CBOE Rule 6.8(e) generally limits the size of RAES orders to twenty
or fewer contracts. On August 31, 1999, options on Oracle Corporation
(ORQ), Eastman Kodak Company (EK), EMC Corporation (EMC), Merck &
Company, Inc. (MRK), Hewlett Packard Company (HWP), Texas Instruments,
Inc. (TXN), and Exxon Corporation (XON) were dually listed on the CBOE
and the Phlx. Before August 31, each of these option classes was listed
solely on the CBOE. The Phlx has announced that the automatic execution
size limit for each of these seven option classes is 50 contracts
pursuant to Phlx Rule 1080(c).
Therefore, pursuant to CBOE Rule 6.8 and Interpretation and Policy
.01, the CBOE proposes to increase the RAES eligible order size limit
in ORQ, EK, EMC, MRK, HWP, TXN, and XON to 50 contracts, to match the
eligible order size on the automatic execution system of the Phlx,
effective August 31, 1999.\3\
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\3\ Subsequently, the Commission approved a proposed rule filing
by the CBOE to increase the size limit of RAES orders in most
options classes to 50 contracts. See Securities Exchange Act Release
No. 41821 (September 1, 1999) (SR-CBOE-99-17).
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The Exchange represents that RAES has the capacity to accommodate
at RAES order limit size of up 50 contracts in ORQ, EK, EMC, MRK, HWP,
TXN, and XON, both in terms of systems capacity as well as the market-
making capacity of market-makes participating in RAES.
2. Statutory Basis
The exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act in general, and furthers the objectives of
sections 6(b)(5) and 6(b)(8) of the Act in particular, in that it is
designed to remove unnecessary burdens on competition, as well as
remove impediments to and perfect the mechanism of a free and open
market and a national market system, for the benefit of investors and
the public interest.
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 constitutes a stated policy,
practice, or interpretation with respect to the meaning,
administration, or enforcement of an existing rule of the Exchange, it
has become effective pursuant to Section (19)(b)(3)(A)(i) of the Act
and subparagraph (f)(1) of Rule 19b-4 thereunder. 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 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, 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-99-50 and should
be submitted October 12, 1999.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\4\
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\4\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-24357 Filed 9-17-99; 8:45 am]
BILLING CODE 8010-01-M