[Federal Register Volume 66, Number 149 (Thursday, August 2, 2001)]
[Notices]
[Pages 40302-40303]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19281]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44597; File No. SR-CBOE-2001-37]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 by the 
Chicago Board Options Exchange, Inc. Amending its Schedule of Exchange 
Fees

July 26, 2001.
    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 June 28, 2001, the Chicago Board Options Exchange, Inc. 
(``Exchange'' or ``CBOE'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared by the CBOE. 
On July 20, 2001, the CBOE submitted Amendment No. 1 to the proposed 
rule change.\3\ The Commission is publishing this notice to solicit 
comments on the proposed rule change and Amendment No. 1 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 Nancy Sanow, Assistant Director, Division of 
Market Regulation (``Division''), Commission, from Christopher Hill, 
Attorney II, CBOE, dated July 19, 2001 (``Amendment No. 1''). In 
Amendment No. 1, the CBOE made technical corrections to the rule 
text.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The CBOE proposes to amend its fee schedule. The text of the 
proposed rule

[[Page 40303]]

change is available at the Office of the Secretary, CBOE and 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, the CBOE included statements 
concerning the purpose of and basis for the proposed rule change, as 
amended, 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 CBOE 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 purpose of this proposed rule change is to make certain fee 
changes and deletions, and to renew and amend the Exchange's 
Prospective Fee Reduction Program. The proposal is the product of the 
Exchange's annual budget review. The fee changes were approved by the 
Exchange's Board of Directors pursuant to CBOE Rule 2.22. The CBOE 
proposes that the changes would be effective as of July 1, 2001.
    The Exchange is amending the following fees. (1) Registration fees 
for Registered Representatives, Registered Options Principals, and 
Financial/Operations Principals will be increased from $45 to $55 for 
initial applications. Annual and transfer fees for these registered 
persons will be increased from $40 to $50. The Exchange proposes to 
amend CBOE Rule 2.22(b) to reflect the increase in these registration 
fees. (2) The ILX trading floor booth terminal rental fee will be 
increased from $400 to $425 per month, the ILX installation fee will be 
increased from $150 to $175 per month, the ILX removal fee will be 
increased from $100 to $125 per month, and the ILX relocation fee will 
be increased from $200 to $225 per month. (3) The various monthly booth 
fees will each be raised 10%. (4) The various membership application 
fees will each be raised 10%, except for the Fingerprint Processing 
fee, which will be raised 14% (from $35 to $40), and New Member 
Orientation Fee, which will remain unchanged at $500. The Exchange 
proposes to amend its Membership Fee Circular to reflect these 
membership application fee changes.
    The various amendments contained in this filing are structured to 
fairly allocate the costs of operating the Exchange.
    The Exchange proposes to renew and amend its Prospective Fee 
Reduction Program (``Program''). The Program provides that if at the 
end of any quarter of the Exchange's fiscal year, the Exchange's 
average contract volume per day on a fiscal year-to-date basis exceeds 
one of certain predetermined volume thresholds, the Exchange's market-
maker transaction fees will be reduced in the following fiscal quarter 
in accordance with a fee reduction schedule. Trading volume in the 
fourth quarter of fiscal year 2001 will be used to determine the 
discount applied in the first quarter of fiscal year 2002. The CBOE 
proposes that the Program begin on July 1, 2001 at the beginning of the 
Exchange's 2002 fiscal year, and continue through the end of the 
Exchange's 2002 fiscal year, terminating June 30, 2002.
    The amendments to the Program are structured to fairly allocate the 
costs of operating the Exchange in the event that the Exchange 
experiences higher volume. In addition, although the proposed rule 
change provides that the Exchange's Program will terminate at the end 
of the Exchange's 2002 fiscal year, the Exchange intends to evaluate 
this Program prior to the beginning of the 2002 fiscal year and may 
renew this Program in the same or modified form for the 2003 fiscal 
year.\4\
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    \4\ The Commission notes and the Exchange acknowledges that it 
would be required to file a proposed rule change pursuant to Section 
19(b) of the Act before renewing or modifying this program. 
Telephone conversation between Christopher Hill, Attorney II, CBOE, 
and Frank N. Genco, Attorney Advisor, Division, Commission on July 
9, 2001.
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2. Statutory Basis
    The Exchange believes the proposed rule change, as amended, is 
consistent with Section 6(b) Act \5\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act \6\ in particular, in that it 
is designed to provide for the equitable allocation of reasonable dues, 
fees, and other changes among CBOE members.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change, as 
amended, will impose any burden on competition not necessary or 
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 either solicited or received.

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

    Because the foregoing rule change establishes or changes a due, 
fee, or other charge imposed by the Exchange, it has become effective 
pursuant to Section 19(b)(3)(A) \7\ of the Act and Rule 19b-4(f)(2) \8\ 
thereunder. At any time within 60 days of the filing of the proposed 
rule change, as amended, 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.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(2).
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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, as amended, 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, as 
amended, 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 the CBOE. All 
submissions should refer to File No. SR-CBOE-2001-37 and should be 
submitted by August 23, 2001.

    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. 01-19281 Filed 8-1-01; 8:45 am]
BILLING CODE 8010-01-M