[Federal Register Volume 65, Number 49 (Monday, March 13, 2000)]
[Notices]
[Page 13351]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-6007]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42491; File No. SR-ODD-00-01]


Self-Regulatory Organizations; The Options Clearing Corporation; 
Order Granting Approval to Proposed Supplement to Options Disclosure 
Document Regarding FLEX Equity Options

March 2, 2000.
    On March 2, 2000, the Options Clearing Corporation (``OCC'') 
submitted to the Securities and Exchange Commission (``SEC'' or 
``Commission''), pursuant to Rule 9b-1 under the Securities Exchange 
Act of 1934 (``Act''),\1\ five definitive copies of a Supplement to its 
options disclosure document (``ODD''), which describes, among other 
things, the risks and characteristics of trading in flexibly structure 
options (``FLEX options''). In particular, the Supplement deletes the 
discussion of restrictions on exercise price intervals and exercise 
prices for FLEX equity call options.\2\
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    \1\ 17 CFR 240.9b-1.
    \2\ See Letter from James C. Yong, First Vice President and 
General Counsel, OCC, to Katherine A. England, Division of Market 
Regulation, Commission, dated March 1, 2000.
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    The ODD currently contains general disclosures on the 
characteristics and risks of trading options on equity securities. The 
Commission has approved proposals by three options exchanges to remove 
restrictions on exercise price intervals and exercise prices for FLEX 
equity call options.\3\ The proposed Supplement to the ODD deletes the 
discussion of these restrictions.
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    \3\ The Commission approved these proposals after the Internal 
Revenue Service clarified the tax treatment of these options. See 
Release No. 34-42371 (January 31, 2000), 65 FR 5921 (February 7, 
2000) (order approving SR-CBOE-99-63); Release No. 34-42389 
(February 7, 2000), 65 FR 8224 (February 17, 2000) (order approving 
SR-PCX-00-01 and SR-Amex-00-02).
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    The Commission has reviewed the ODD Supplement and finds that it 
complies with Rule 9b-1 under the Act.\4\ The Supplement is intended to 
be read in conjunction with the ODD, which discusses the 
characteristics and risks of options generally. The ODD, along with the 
Supplement, provides information regarding FLEX options sufficient to 
describe the special characteristics of these products. Rule. 9b-1 
provides that an options market must file five preliminary copies of an 
amended ODD with the Commission at least 30 days prior to the date 
definitive copies of the ODD are furnished to customers, unless the 
Commission determines otherwise, having due regard for the adequacy of 
information disclosed and the protection of investors.\5\ The 
Commission has reviewed the Supplement, and finds that it is consistent 
with the protection of investors and in the public interest to allow 
the distribution of the Supplement as of the date of this order.
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    \4\ 17 CFR 240.9b-1.
    \5\ This provision is intended to permit the Commission either 
to accelerate or extend the time period in which definitive copies 
of a disclosure document may be distributed to the public.
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    It is therefore ordered, pursuant to Rule 9b-1 under the Act,\6\ 
that the proposed Supplement regarding FLEX equity options (SR-ODD-00-
01) is approved on an accelerated basis.
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    \6\ 17 CFR 240.9b-1.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(39).
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Jonathan G. Katz,
Secretary.
[FR Doc. 00-6007 Filed 3-10-00; 8:45 am]
BILLING CODE 8010-01-M