[Federal Register Volume 66, Number 194 (Friday, October 5, 2001)]
[Notices]
[Page 51080]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-24974]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44862; File No. SR-CBOE-2001-33]


Self-Regulatory Organizations; Order Approving Proposed Rule 
Change by the Chicago Board Options Exchange, Incorporated Relating To 
Step-Up From the Designated Primary Market Maker's Autoquote Price

September 27, 2001.
    On June 14, 2001, the Chicago Board Options Exchange, Incorporated 
(``CBOE'' or ``Exchange'') filed a proposed rule change with the 
Securities and Exchange Commission (``SEC'' or ``Commission'') pursuant 
to Section 19(b)(1) of the Securities Exchange Act of 1934 (the 
``Act''),\1\ and Rule 19b-4 thereunder.\2\ On August 16, 2001, the 
Exchange submitted Amendment No. 1 to the proposed rule change.\3\ The 
proposed rule change would clarify, for purposes of automatic step-up, 
that the term ``Exchange's best bid or offer'' would refer to the 
Designated Primary Market Maker's (``DPM'') Autoquote price or the 
price from the DPM's proprietary automated quotation updating system.
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    \1\ 15 U.S.C. 78(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter to Debby Flynn, Assistant Director, Division of 
Market Regulation, Commission, from Steve Youhn, Attorney, CBOE, 
dated August 15, 2001 (``Amendment No. 1)''
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    The proposed rule change was published for comment in the Federal 
Register on August 23, 2001.\4\ The Commission received no comments on 
the proposal.
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    \4\ See Securities Exchange Act Release No. 44718 (August 17, 
2001), 66 FR 44391.
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange \5\ and, in 
particular, the requirements of Section 6 of the Act \6\ and the rules 
and regulations thereunder. The Commission finds that the proposed rule 
change is consistent with Section 6(b)(5) of the Act \7\ because, by 
limiting the Exchange's best bid or offer for purposes of the step-up 
feature of the Exchange's Retail Automatic Execution System to the 
Autoquote price as established by the DPM or the DPM's proprietary 
automated quotation updating system, the proposal should ensure that 
the step-up feature uses a quote that more accurately reflects the 
prevailing market. Therefore, the Commission finds the proposed rule 
change is designed to promote just and equitable principles of trade, 
to prevent fraudulent and manipulative acts and, in general, to protect 
investors and the public interest.
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    \5\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(5).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (SR-CBOE-2001-33) be, and it 
hereby is, approved.
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    \8\ 15 U.S.C. 78s(b)(2).

    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. 01-24974 Filed 10-4-01; 8:45 am]
BILLING CODE 8010-01-M