[Federal Register Volume 65, Number 108 (Monday, June 5, 2000)]
[Notices]
[Pages 35679-35683]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-13954]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42833; File No. SR-CBOE-00-11]


Self Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change by the Chicago 
Board Options Exchange, Inc. Relating to the Listing and Trading of 
Index Portfolio Shares

May 26, 2000.
    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 March 29, 2000, 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 and II below, which Items have been prepared by the Exchange. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons and to approve the 
proposal on an accelerated basis.
---------------------------------------------------------------------------

    \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 Exchange proposes to adopt listing standards to list and trade 
Index Portfolio Shares (``IPS''), securities issued by an open-end 
management investment company that seek to provide investment results 
similar to the price and yield performance of its underlying index. 
Once these listing standards have been approved, the Exchange intends 
to trade IPSs of a Fund based on the S&P 100 Index. Below is the text 
of the proposed rule change. New language is italicized and deletions 
are bracketed.
* * * * *
Chicago Board Options Exchange, Incorporated Rules
    Rule 1.1
* * * * *
    . . . Interpretations and Policies:
* * * * *
    .03  the term ``Index Portfolio Shares'' or IPSs means securities 
that (a) are issued by an open-end management investment company based 
on a portfolio of stocks designed to provide investment results that 
correspond generally to the price and yield performance of a specified 
foreign or domestic stock index; (b) are issued by such an open-end 
management investment company in a specified aggregate minimum number 
in return for a deposit of specified number of shares of stock and/or a 
cash amount with a value equal to the next determined net asset value; 
and (c) when aggregated in the same specified minimum number, may be 
redeemed at a holder's request by such open-end management investment 
company which will pay to the redeeming holder stock and/or cash with a 
value equal to the next determined net asset value.
* * * * *
    Rule 30.10  The unit of trading in stocks, [and] the unit of 
trading in IPRs and the unit of trading in IPSs shall be 100 shares or 
units, except as otherwise established [in either case] by the 
Exchange. The unit of trading in all other securities traded subject to 
the rules in this Chapter shall be as determined by the Board of 
Directors.
* * * * *
    Rule 30.33
* * * * *
    . . . Interpretations and Policies:
    .01 The minimum fractional change for IPRs and IPSs shall be 1/64 
of $1.00.
* * * * *
    Rule 30.36  Rule 24.7 shall apply to the trading of stock index 
warrants, IPSs and IPRs. The term ``option'' as used therein shall be 
deemed for the purposes of this Rule to include a stock index warrant, 
IPSs or IPRs, as the case may be.
* * * * *

[[Page 35680]]

    Rule 30.55
    (b) The disclaimers found under Rule 24.14 shall apply to any 
Reporting Authority with respect to any index or portfolio underlying a 
series of IPRs, IPSs, index warrants or any other index-related 
security governed by the rules of Chapter XXX. The terms ``option'' and 
``option contract'' as used in Rule 24.14 shall be deemed for the 
purpose of this rule to include IPRs, IPSs, index warrants or other 
index-related security governed by the rules of Chapter XXX, as the 
case may be.
* * * * *

Special Provisions for IPSs

    Rule 30.56 
    Designation of an index or portfolio. The Exchange may list and 
trade Index Portfolio Shares (as defined in Interpretations and 
Policies .03 following rule 1.1) based on one or more foreign or 
domestic stock indexes or securities portfolios. Each issue of Index 
Portfolio Shares based on each particular stock index or portfolio 
shall be designated as a separate series and shall be identified by a 
unique symbol. The stocks that are included in an index or portfolio on 
which a series of Index Portfolio Shares is based shall be selected by 
the Exchange or its agent or by such other person as shall have 
authorized use of such index or portfolio. Such index or portfolio may 
be revised from time to time as may be deemed necessary or appropriate 
to maintain the quality and character of the index or portfolio. 
* * * * *
    Rule 31.5
* * * * *
    M. IPSs. Notwithstanding any other provisions in these Rules to the 
contrary, a series of IPSs representing interests in a particular open-
end management investment company (as those terms are defined in 
Interpretations and Policies .03 following Rule 1.1) may be listed on 
the Exchange subject to the criteria set forth below: 
    (a) Public Distribution--For each open-end management investment 
company, the Exchange will establish a minimum number of IPSs required 
to be outstanding at the time of commencement of trading on the 
Exchange.
    (b) Voting--Voting rights shall be as set forth in the applicable 
open-end management investment company prospectus. ]
* * * * *
    Rule 31.94
* * * * *
    H. Policies Regarding IPSs.
    Twelve months following the commencement of trading on the Exchange 
of a series of Index Portfolio Shares, the Exchange will consider the 
suspension of trading in, or removal from listing of, such series of 
IPSs, when in its opinion further dealing in such securities appears 
unwarranted under any of the following circumstances: 
    (a) there are fewer than 50 beneficial holders of the series of 
Index Portfolio Shares for 30 or more consecutive trading days; or 
    (b) the value of the index or portfolio of securities on which the 
series of Index Portfolio Shares is based is no longer calculated or 
available; or 
    (c) such other event shall occur or condition exists which in the 
opinion of the Exchange, makes further dealings on the Exchange 
Inadvisable. 
    Upon termination of an open-end management investment company, the 
Exchange requires that Index Portfolio Shares issued in connection with 
such entity be removed from Exchange listing. 
* * * * *

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 III below. The Exchange 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
    The Exchange proposes to adopt new Interpretation .03 to CBOE Rule 
1.1, new CBOE Rule 30.56, new paragraph M to CBOE Rule 31.5, and new 
paragraph H to CBOE Rule 31.94; and to amend CBOE Rule 30.10, 
Interpretation .01 to CBOE Rule 30.33, CBOE Rule 30.36, and CBOE Rule 
30.55, to permit the listing and trading of IPSs, i.e., securities 
issued by an open-end management investment company that seeks to 
provide investment results similar to the price and yield performance 
of its underlying index. The Exchange believes that IPSs would provide 
investors with increased flexibility in meeting their investment needs.
    a. Index Portfolio Shares. IPSs will be issued by an entity 
registered with the Commission under the Investment Company Act of 
1940, as amended, as an open-end management investment company, 
commonly known as a mutual fund (``Fund''). A Fund may be organized as 
a series fund providing for the creation of separate series of 
securities, each with a portfolio consisting of some or all of the 
component securities of a specified securities index. The Exchange 
represents that IPSs are essentially the same as Index Fund Shares, 
securities that have traded on the American Stock Exchange LLC 
(``Amex'') since the Commission approved Amex Rules 1000A et seq. in 
March 1996,\3\ The CBOE also states that IPSs are similar to CBOE's 
Index Portfolio Receipts (``IPRs''), which are securities issued by a 
unit investment trust rather than a Fund. The Commission approved 
standards for the listing and trading of IPRs in 1998.\4\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 36947 (March 8, 
1996), 61 FR 10606 (March 14, 1996).
    \4\ See Securities Exchange Act Release No. 39581 (January 26, 
1998), 63 FR 5579 (February 3, 1998).
---------------------------------------------------------------------------

    The CBOE intends to list and trade IPSs of a Fund (to be managed by 
Barclays Global Fund Advisors) that will seek to provide investment 
results that correspond generally to the price and yield performance of 
the S&P 100 Index.\5\ The CBOE states that this index represents the 
large capitalization growth sector of the U.S. market and accounts for 
approximately 38% of the market capitalization of all U.S. equity 
securities. The CBOE represents that the index consists of 100 stocks 
that are some of the largest companies in the U.S. equity market and 
that size, liquidity, and sector representations are the primary 
determinants in choosing index constituents.
---------------------------------------------------------------------------

    \5\ At the time, the CBOE has no plans to list series of IPSs 
for indices other than that described in the present rule filing. 
Telephone conversation between Kevin An, Attorney, Schiff, Hardin & 
Waite, and Heather Traeger, Attorney, Division of Market Regulation 
(``Division''), Commission; Susie Cho, Attorney, Division, 
Commission, on April 25, 2000.
---------------------------------------------------------------------------

    b. Issuance and Redemption. Issuances of IPSs by a Fund will be 
made only in minimum size aggregations or multiples thereof (``Creation 
Units''). The size of the applicable Creation Unit will be set forth in 
the Fund's prospectus, and will vary from one series of IPSs to 
another, but generally will be substantial (e.g., at least 50,000 
shares).\6\ It is expected that

[[Page 35681]]

a Fund will issue and sell IPSs through a principal underwriter on a 
continuous basis at the net asset value (``NAV'') per share next 
determined after an order to purchase IPSs in Creation Unit size 
aggregations is received in proper form.
---------------------------------------------------------------------------

    \6\ The Commission notes that if in the future the number of 
shares per Creation Unit of an S&P 100 series were to be changed, or 
the value of a Creation Unit were to fall significantly, such a 
change could require the filing of a proposed rule change by the 
Exchange pursuant to Section 19(b) of the Act. Telephone 
conversation between Kevin An, Attorney, Schiff, Hardin & Waite, and 
Heather Traeger, Attorney, Division, Commission, on April 25, 2000.
---------------------------------------------------------------------------

    The Exchange expects that Creation Unit size aggregations of IPSs 
generally will be issued in exchange for the ``in kind'' deposit of a 
specified portfolio of securities, together with a specified amount of 
cash. The Exchange anticipates that such deposits will be made 
primarily by institutional investors, arbitrageurs, and market maker 
members of the Exchange. Similarly, redemption of IPSs generally will 
be made ``in kind,'' with a portfolio of securities and/or cash 
exchanged for IPSs that have been tendered for redemption.
    c. Trading of IPSs. Following issuance, IPSs will be trade on the 
Exchange like other equity securities, and CBOE equity trading rules 
generally would apply to the trading of IPSs. IPSs will be registered 
in book entry form through The Depository Trust Company (``DTC''), 
which means no stock certificates will be issued. The Exchange 
represents that the trading prices of IPSs on the Exchange may differ 
in varying degrees from their daily NAVs and can be affected by market 
forces such as supply and demand, economic conditions and other 
factors. Trading in IPSs on the Exchange may be effected until 3:15 
p.m. (central time) each business day. The unit of trading of IPSs will 
be 100 shares or units and the minimum fractional change in IPSs will 
be \1/64\ of $1.00.
    d. Distributions. A Fund may make periodic distributions of 
dividends from net investment income, if any. A Fund also distribute 
its capital gains, if any, to investors annually.
    e. Criteria for Initial and Continued Listing. The Exchange 
believes that the proposed standards for listing and delisting of IPSs 
allow some flexibility for the Exchange. The Exchange will establish a 
minimum number of IPSs required to be outstanding at the time of 
commencement of trading on the Exchange. The Exchange anticipates that 
a minimum of two Creation Units in any series of IPSs would be required 
to be outstanding before trading could begin. Each series of IPSs will 
be subject to the initial and continued listing criteria of new 
proposed CBOE Rules 31.5M and 31.94H.
    CBOE Rule 31.94H provides that twelve months after the commencement 
of Exchange trading of a series of IPSs, the Exchange will consider 
suspension of trading in, or removal from listing of, such series under 
any of the following circumstances:
    (a) There are fewer than 50 beneficial holders of the series of 
IPSs for 30 or more consecutive trading days;
    (b) The value of the index or portfolio of securities on which the 
series of IPSs is based is no longer calculated or available; or
    (c) Such other event shall occur or condition exists which, in the 
opinion of the Exchange, makes further dealings on the Exchange 
inadvisable.
    The Exchange will also require that IPSs be removed from listing 
upon termination of the Fund that issued such shares.
    f. Disclosure. With respect to investor disclosure, the Exchange 
notes that, pursuant to the requirements of the Securities Act of 1933, 
as amended, all investors in IPSs will receive a prospectus, including 
investors purchasing in secondary market transactions on the Exchange. 
This is due to the fact that the Creation Units will be in continuous 
distribution.
    Prior to commencement of trading of a series of IPSs, the Exchange 
will distribute to Exchange members an Information Circular calling 
attention to characteristics of the specific series and to applicable 
Exchange rules. That circular will inform members of their 
responsibilities with respect to transactions in such IPSs. The 
circular will inform member organizations of their responsibility to 
deliver a prospectus to all investors purchasing IPSs. The circular 
will also note that IPSs are not individually redeemable; they may be 
redeemed in Creation Units only.
    g. Trading Halts. Prior to commencement of trading in IPSs, the 
Exchange will issue a circular to members informing them of Exchange 
policies regarding trading halts in IPSs. The circular will make clear 
that, in addition to other factors that may be relevant, the Exchange 
may consider factors such as those set forth in CBOE Rule 24.7 in 
exercising its discretion to halt or suspend trading. These factors 
would include: (1) Whether trading has been halted or suspended in the 
primary market(s) for any combination of underlying stocks accounting 
for 20% or more of the applicable current index group value; or (2) 
whether other unusual conditions or circumstances detrimental to the 
maintenance of a fair and orderly market are present. Also, trading in 
IPSs would be halted (along with the trading of other securities on the 
Exchange) if the circuit breaker parameters under CBOE Rule 6.3B are 
reached.
    h. Surveillance. The Exchange will use the surveillance procedures 
that it has been using for the trading of other non-option securities 
traded on the Exchange.\7\ These procedures incorporate and rely upon 
existing CBOE surveillance procedures governing equities.
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 39581 (January 26, 
1998), 63 FR 5579 (February 3, 1998) (noting that CBOE surveillance 
procedures for the trading of IPRs, which incorporate and rely upon 
existing CBOE surveillance procedures governing equities, were 
adequate under the Act).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6 of the Act \8\ in general, and in particular, with 
section 6(b)(5),\9\ in that it is designed to promote just and 
equitable principles of trade, remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and 
protect investors and the public interest.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any inappropriate burden on competition. The CBOE believes that 
the proposed rule change will enhance competition for the listing and 
trading of IPSs and similar securities that are currently listed and 
traded on the Amex.

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

    The Exchange did not receive any written comments on the proposed 
rule change.

III. 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

[[Page 35682]]

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 will also be available for 
inspection and copying at the principal office of the Exchange. All 
submissions should refer to File No. SR-CBOE-00-11 and should be 
submitted by June 26, 2000.

IV. Commission's Findings and Order Granting Accelerated Approval 
of Proposed Rule Change

    After careful review, the Commission finds, for the reasons set 
forth below, that the proposed rule change is consistent with the 
requirements of section 6 of the Act \10\ and the rules and regulations 
thereunder applicable to a national securities exchange, and in 
particular, the requirements of section 6(b)(5) of the Act.\11\ 
Specifically, the Commission finds that the proposed standards 
governing the listing and trading of IPSs, and, in particular, the IPSs 
Fund on the S&P 100 Index, will provide investors with a convenient and 
less expensive way of participating in the securities markets. The 
proposal should advance the public interest by providing investors with 
increased flexibility in satisfying their investment needs by allowing 
them to purchase and sell a single security replicating or to a large 
extent representing the performance of several portfolios of stocks at 
negotiated prices throughout the business day. Accordingly, the 
Commission finds that the Exchange's proposal will promote just and 
equitable principles of trade, foster cooperation and coordination with 
persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, and, in general, protect investors and the public interest 
consistent with section 6(b)(5) of the Act.\12\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f.
    \11\ 15 U.S.C. 78f(b)(5).
    \12\ 15 U.S.C. 78(f)(b).
---------------------------------------------------------------------------

    On January 26, 1998, the Commission approved the listing and 
trading on the CBOE of IPRs, securities issued by a unit investment 
trust that seek to provide investment results that correspond generally 
to the price and yield performance of a specified index.\13\ The 
proposed IPSs are similar to IPRs except that IPSs are issued by a Fund 
instead of a unit investment trust. The Commission believes that the 
proposal to list and trade IPSs, and specifically the Fund based on the 
S&P 100 Index, will provide investors with an alternative to trading a 
broad range of securities on an individual basis, and will give 
investors the ability to trade a product representing an interest in a 
portfolio of securities designed to reflect substantially the 
applicable underlying index. IPSs will allow investors to: (1) Respond 
quickly to market changes through intra-day trading opportunities; (2) 
engage in hedging strategies similar to those used by institutional 
investors; and, (3) reduce transactions costs for trading a portfolio 
of securities.
---------------------------------------------------------------------------

    \13\ See supra, note 4.
---------------------------------------------------------------------------

    Although IPSs are not leveraged instruments, and therefore do not 
possess any of the attributes of stock index options, their prices will 
be derived and based on the value of the securities and the cash held 
in the Fund. Accordingly, the level of risk involved in the purchase or 
sale of these IPSs is similar to the risk involved in the purchase or 
sale of traditional common stock, with the exception that the pricing 
mechanism for these IPSs is based on a portfolio of securities.
    The Commission finds that the CBOE's proposal contains adequate 
rules and procedures to govern the trading of IPSs. Under CBOE rules, 
IPSs are subject to the full panoply of rules governing the trading of 
equity securities on the CBOE, including, among others, rules and 
procedures governing the priority, parity and precedence of orders, 
responsibilities of all types of market-makers, trading halts, 
disclosures to members, margin requirements, and customer suitability 
requirements. Further, the Commission notes that the CBOE will use 
surveillance procedures that incorporate and rely upon existing CBOE 
surveillance procedures governing equities, and the Commission has 
found in the past that these procedures are adequate under the Act.\14\ 
In addition, the rules we are approving today contain specific listing 
and delisting criteria for IPSs that will help to ensure that the 
markets for IPSs will be deep and liquid to allow for the maintenance 
of fair and orderly markets. The Commission believes that these 
criteria should serve to ensure that the underlying securities of an 
IPSs series are well capitalized and actively traded, and that new 
series of IPSs do not contain features that are likely to impact 
adversely the U.S. securities markets.
---------------------------------------------------------------------------

    \14\ See Securities Exchange Act Release No. 39581 (January 26, 
1998), 63 FR 5579 (February 3, 1998).
---------------------------------------------------------------------------

    In addition, the Exchange has designated that a minimum of two 
creation units, approximately 100,000 shares, will be required to be 
outstanding at start-up of trading. The Commission believes this 
minimum number is sufficient to help to ensure that a minimum level of 
liquidity will exist at the start of trading. Furthermore, the 
Commission finds that registering the IPSs in book-entry form through 
DTC, managing the distribution of dividends from net investment income, 
if any, and distributing capital gains, if any, are characteristics of 
IPSs that are consistent with the Act and should allow for the 
maintenance of fair and orderly markets and perfect the mechanism of a 
free and open market pursuant to section 6(b)(5) of the Act.\15\
---------------------------------------------------------------------------

    \15\ In approving this rule, the Commission notes that it has 
also considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    Furthermore, the Commission believes that the Exchange's proposal 
to trade IPSs in minimum fractional increments of \1/64\ of $1.00 is 
consistent with the Act. The Commission believes that such trading 
should enhance market liquidity, and should promote more accurate 
pricing, tighter quotations, and reduced price fluctuations. The 
Commission also believes that such trading should allow customers to 
receive the best possible execution of their transactions in IPSs.
    The Exchange represents that the Reporting Authority will 
disseminate for each Fund of IPSs an estimate, updated every 15 
seconds, of the value of a share of each Fund. The Commission believes 
that the information the Exchange proposes to have disseminated will 
provide investors with timely and useful information concerning the 
value of each Fund.\16\
---------------------------------------------------------------------------

    \16\ Telephone conversation between Kevin An, Attorney, Schiff, 
Hardin & Waite, and Heather Traeger, Attorney, Division, Commission; 
Susie Cho, Attorney, Division, Commission, on May 22, 2000.
---------------------------------------------------------------------------

    The Commission also believes that the CBOE has developed adequate 
policies regarding trading halts in IPSs. Specifically, the Exchange 
would halt trading in IPSs if the circuit breaker parameters under CBOE 
Rule 6.3B were reached. In addition, in deciding whether to halt 
trading or conduct a delayed opening in IPSs, the CBOE could consider 
factors such as those set forth in CBOE Rule 24.7, including: (1) 
Whether trading has been halted or suspended in the primary market(s) 
for any combination of underlying stocks accounting for 20% or more the 
applicable current index group value; or (2) whether other unusual 
conditions or circumstances detrimental to the

[[Page 35683]]

maintenance of a fair and orderly market are present.
    In addition, the Commission believes that the IPSs proposal 
contains several provisions that will ensure that investors are 
adequately apprised of the terms, characteristics, and risks of trading 
IPSs. All investors in IPSs will receive a prospectus prior to or 
concurrently with the confirmation of a transaction therein, including 
investors purchasing in secondary market transactions on the Exchange. 
The prospectus should address the special terms and characteristics of 
the particular IPSs Fund, including a statement regarding their 
redeemability and method of creation, and a statement that the trading 
prices of IPSs on the Exchange may differ in varying degrees from their 
daily NAVs and can be affected by market forces such as supply and 
demand, economic conditions, and other factors.\17\
---------------------------------------------------------------------------

    \17\ Telephone conversation between Kevin An, Attorney, Schiff, 
Hardin & Waite, and Heather Traeger, Attorney, Division, Commission; 
Susie Cho, Attorney, Division, Commission, on May 22, 2000.
---------------------------------------------------------------------------

    Furthermore, the Commission notes that prior to the commencement of 
trading of a series of IPSs, the Exchange will distribute to Exchange 
members an Information Circular calling attention to characteristics of 
the specific Fund and to applicable Exchange rules, such as trading 
halt rules. The circular will inform members of their responsibilities 
with respect to transactions in such IPSs and of their responsibility 
to deliver a prospectus to all investors purchasing IPSs. The circular 
will also note that IPSs are not individually redeemable, but must be 
redeemed in Creation Units only.
    The Commission is approving in general the CBOE's proposed listing 
standards for IPSs, and, specifically, the listing of IPSs of a Fund 
based on the S&P 100. The Commission specifically notes that, 
notwithstanding approval of the listing standards for IPSs, other 
similarly structured products, including IPSs based on other indices, 
will require review by the Commission prior to being traded on the 
Exchange. Additional series cannot be listed prior to contacting 
Division staff. In addition, the CBOE may be required to submit a rule 
filing prior to trading a new issue or series on the Exchange.
    The Commission finds good cause for approving the proposed rule 
change prior to the thirtieth day after the date of publication of 
notice thereof in the Federal Register. The Commission notes that the 
proposed rule change is based on Amex Rule 1000A et seq. and is similar 
to CBOE rules relating to IPRs, both of which the Commission approved 
in the past.\18\ The Commission also observes that the proposed rule 
change concerns issues that previously have been the subject of a full 
comment period pursuant to section 19(b) of the Act.\19\ The Commission 
does not believe that the proposed rule change raises novel regulatory 
issues that were not addressed in the previous filings. In view of 
these factors, the Commission believes it is appropriate to permit 
investors to benefit from the flexibility afforded by these new 
instruments by trading them as soon as possible. Accordingly, the 
Commission finds that there is good cause, consistent with section 
6(b)(5) of the Act, to approve the proposal today.
---------------------------------------------------------------------------

    \18\ See supra notes 3 and 4.
    \19\ 15 U.S.C. 78s(b)
---------------------------------------------------------------------------

V. Conclusion

    It is Therefore Ordered, pursuant to section 19(b)(2) of the 
Act,\20\ that the proposed rule change (SR-CBOE-00-11) is hereby 
approved on an accelerated basis.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\21\
---------------------------------------------------------------------------

    \21\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-13954 Filed 6-2-00; 8:45 am]
BILLING CODE 8010-01-M