[Federal Register Volume 65, Number 247 (Friday, December 22, 2000)]
[Notices]
[Pages 80968-80969]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-32654]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43727; File No-CBOE-00-65]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by Chicago Board Options 
Exchange, Inc. to Extend the Pilot Period Relating to the Processing of 
Live Ammo Orders Until January 31, 2001

December 14, 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 December 7, 2000, the Chicago Board Options Exchange, Inc. (``CBOE'' 
or ``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule changes 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 Exchange proposes to extend, until January 31, 2001, the pilot 
program that allows an Order Book Official (`OBO'') or a Designated 
Primary Market-Maker (``DPM'') to designate certain booked orders to be 
electronically executed. The text of the proposed rule change is 
available at the Office of the Secretary, CBOE and at the Commission.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, 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 the statements may be examined at the places specified in Item 
IV below. The CBOE 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
    On February 2, 2000, the Commission approved, on a pilot basis, a 
system change that allows an OBO or a DMP to reroute orders on the 
electronic book screen that displays market orders and limit orders 
that improve the market (``Live Ammo'') to the Retail Automatic 
Executive System (``RAES''), if the orders are RAES-eligible.\3\ The 
pilot, which was originally scheduled to expire on October 31, 2000, 
was extended to expire on December 15, 2000.\4\
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    \3\ Securities Exchange Act Release No. 42379, 65 FR 6665 
(February 10, 2000). The Exchange rule pertaining to the processing 
of Live Ammo orders is CBOE Rule 7.4(g).
    \4\ Securities Exchange Act Release No. 43499 (October 31, 2000) 
65 FR 67023 (November 8, 2000).
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    The Exchange now proposes to extend the pilot until January 31, 
2001. An extension of the pilot will permit consideration of the 
Exchange's proposal to adopt the Live Ammo to RAES processing system on 
a permanent basis.\5\ The Exchange believes that the proposed extension 
of the pilot until January 31, 2001 will permit the benefits of Live 
Ammo to RAES system to remain in place while the Commission considers 
the Exchange's proposal to permanently adopt the system.
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    \5\ See Securities Exchange Act Release No. 43646 (November 30, 
2000), 65 FR 77403 (December 11, 2000).
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2. Basis
    The Exchange believes that because the Live Ammo to RAES processing 
system has provided for the more timely execution of marketable orders, 
the proposed rule change is consistent with Section 6(b) of the Act,\6\ 
in general, and furthers the objectives of Section 6(b)(5),\7\ in 
particular, because it would foster cooperation and coordination with 
persons engaged in regulating, clearing, settling, and processing 
information with respect to, and facilitating transactions in 
securities, and would remove impediments to and perfect the mechanism 
of a free and open market in manner consistent with the protection of 
investors and the public interest.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    CBOE does not believe that the proposed rule change will impose any 
burden on competition not necessary or

[[Page 80969]]

appropriate in furtherance of purposes of the Act.

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 proposed rule change: (1) Does not significantly affect 
the protection of investors or the public interest; (2) does not impose 
any significant burden on competition; and (3) does not become 
operative for 30 days from the date of filing, or such shorter time as 
the Commission may designate if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to section 19(b)(3)(a) of the Act \8\ and Rule 19b-
4(f)(6) \9\ thereunder.\10\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ As required under rule 19b-4(f)(6)(iii), the Exchange 
provided the Commission with written notice of its intent to file 
the proposed rule change at least five business days prior to the 
filing date.
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    A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally 
does not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(ii) \12\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange seeks to have the 
proposed rule change become operative immediately in order to allow the 
pilot to continue in effect on an uninterrupted basis.
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b(f)(6)(iii).
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    The Commission, consistent with the protection of investors and the 
public interest, has determined to make the proposed rule change 
operative immediately through January 31, 2001. The extension of the 
pilot will provide the Commission with the time necessary to review and 
evaluate the Exchange's proposal to permanently adopt the Live Ammo to 
RAES system. The Commission notes that unless the pilot is extended, 
the Pilot will expire on December 15, 2000, which the Commission 
believes could result in confusion regarding how orders on the Live 
Ammo screen should be handled. Therefore, the Commission believes that 
it is in the public interest to extend the pilot.
    Based on these reasons, the Commission believes that it is 
consistent with the protection of investors and the public interest 
that the proposed rule change become operative immediately through 
January 31, 2001.\13\ 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 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.
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    \13\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the rule's impact on 
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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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. Copies of such filing will also be 
available for inspection and copying at the principal office of CBOE. 
All submissions should refer to File No. SR-CBOE-00-65 and should be 
submitted by January 12, 2001.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-32654 Filed 12-21-00; 8:45 am]
BILLING CODE 8010-01-M