[Federal Register Volume 64, Number 222 (Thursday, November 18, 1999)]
[Notices]
[Pages 63064-63065]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30090]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42126; File No. SR-Amex-99-40; SR-PCX-99-41; SR-CBOE-
99-59]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the American Stock Exchange LLC; Pacific Exchange, Inc.; and 
Chicago Board Options Exchange, Inc. Relating to Permanent Approval of 
the Elimination of Position and Exercise Limits for Flex Equity Options

November 10, 1999.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act'' or ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on October 5, 1999, October 13, 1999, and November 
4, 1999, the American Stock Exchange LLC (``Amex''), Pacific Exchange, 
Inc. (``PCX'') and the Chicago Board Options Exchange, Inc. (``CBOE'') 
(collectively, the ``Exchanges'') 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 self-regulatory organization. The PCX filed an 
amendment to the proposed rule change on October 28, 1999.\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.
    \3\See Letter to Richard Strasser, Commission, from Robert 
Pacileo, PCX, dated October 27, 1999 (``PCX Amendment No. 1''). PCX 
Amendment No. 1 clarifies that the rule filing is being filed 
pursuant to Section 19(b)(4) of the Exchange Act, not Section 
19(b)(3).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchanges propose to make permanent their pilot programs to 
eliminate position and exercise limits for FLEX Equity options.

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 self-regulatory 
organizations 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 self-regulatory 
organizations have 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 filings is to approve permanently 
the Exchanges' pilot programs allowing for the elimination of position 
and exercise limits for FLEX Equity options. On September 9, 1997, the 
Commission approved separate proposals by the Exchanges to eliminate 
position and exercise limits for FLEX Equity options under a 2-year 
pilot program.\4\ On September 9, 1999, the Commission approved an 
extension of the pilot programs for another 3 months.\5\
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    \4\ See Securities Exchange Act Release No. 39032 (September 9, 
1997), 62 FR 48683 (September 16, 1997) (approving SR-CBOE-96-79, 
SR-Amex-96-19, and SR-PXC-97-09) (``Approval Order'').
    \5\ See Securities Exchange Act Release No. 41848 (September 9, 
1999), 62 FR 50846 (September 20, 1999).
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    The Approval Order required the Exchanges to report to the 
Commission on the status of the programs so that the Commission could 
use this information to evaluate the consequences of the programs and 
to determine whether to approve the elimination of position and 
exercise limits for these products on a

[[Page 63065]]

permanent basis. All of the Exchanges have submitted the requisite 
reports.\6\ The Exchanges believe that their experiences with the pilot 
programs have been positive and therefore, request that the elimination 
of position and exercise limits for FLEX Equity options be approved on 
a permanent basis.
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    \6\ Amex, PCX and CBOE submitted their reports on May 28, 1999, 
September 30, 1999, and June 2, 1999, respectively.
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2. Basis
    The Exchanges believe that the proposal is consistent with Section 
6(b) \7\ of the Act, in general, and Section 6(b)(5) \8\ of the Act, in 
particular, in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, and to remove impediments to and perfect the 
mechanism of a free and open market and a national market system.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement of 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.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 in the 
Commission's Public Reference Room, located at the above address. 
Copies of such filing will also be available for inspection and copying 
at the principal office of the self-regulatory organization. All 
submissions should refer to File No. SR-Amex-99-40; SR-PCX-99-41; and 
SR-CBOE-99-59 and should be submitted by December 9, 1999.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland.
Deputy Secretary.
[FR Doc. 99-30090 Filed 11-17-99; 8:45 am]
BILLING CODE 8010-01-M