[Federal Register Volume 66, Number 195 (Tuesday, October 9, 2001)]
[Notices]
[Pages 51483-51484]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-25127]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44891; File No. SR-CBOE-2001-52]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Chicago Board Options 
Exchange, Incorporated Relating to the Extension of the Rapid Opening 
System Pilot Program

October 1, 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 September 20, 2001, the Chicago Board Options Exchange, Incorporated 
(``CBOE'' or ``Exchange'') 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 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 for one year the pilot program 
established in Rule 6.2A, Rapid Opening System, which governs the 
operation of, and the eligibility to participate in, the Exchange's 
Rapid Opening System (``ROS pilot''). The text of the proposed rule 
change follows. Deleted text is bracketed. New text is italicized.

Rapid Opening System

Rule 6.2A

    (a)-(c) No change.
    (d) Pilot Program.
    This Rule (and the sentences in Rule 6.2 and Rule 6.45 referring to 
this Rule) will be in effect until [September 30, 2001] September 30, 
2002 on a pilot basis.

Interpretations and Policies

    .01-.02 No change.

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 these statements

[[Page 51484]]

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 the proposed rule change is to extend the ROS pilot 
program for one year or until such time as the Commission has approved 
ROS on a permanent basis, whichever occurs first.\3\ The ROS pilot is 
currently set to expire on September 30, 2001.\4\ ROS is a system 
developed by the Exchange to open an entire options class, all series, 
as a single event, based on a single underlying value. ROS provides the 
Exchange the ability to automate the opening of its various option 
classes, thereby avoiding the lengthier opening rotations that can 
occur under circumstances when there is a large influx of orders 
entered before or during the opening rotation.
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    \3\ The Exchange is only requesting an extension of the ROS 
pilot in this filing. The Exchange is currently preparing a separate 
proposal for permanent approval of ROS.
    \4\ The Commission initially approved the ROS pilot on February 
9, 1999. See Securities Exchange Act Release No. 41033 (February 9, 
1999), 64 FR 8156 (February 18, 1999). The Commission subsequently 
extended the ROS pilot. See Securities Exchange Act Release No. 
42596 (March 30, 2000), 65 FR 18397 (April 7, 2000); and Securities 
Exchange Act Release No. 43395 (September 29, 2000), 65 FR 60706 
(October 12, 2000).
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    The Exchange believes that ROS has operated successfully over the 
past two and one-half years and without any problems. On that basis, 
the Exchange believes that a one-year extension of the ROS pilot is 
warranted. The extension of the pilot period will allow the Exchange to 
continue to provide the substantial benefits of ROS while the Exchange 
prepares its proposal for permanent approval of ROS.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\5\ in general, and furthers the objectives of Section 6(b)(5),\6\ 
in particular, in that it is designed to promote just and equitable 
principles of trade and to protect investors and the public interest.
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    \5\ 15 U.S.C. 78(f)(b).
    \6\ 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 that is not necessary or appropriate in 
furtherance of the purposes of the Act.

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

    The Exchange has neither solicited nor received written comments 
with respect to the proposed rule change.

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

    The foregoing proposed rule change has become effective pursuant to 
Section 19(b)(3)(A) of the Act,\7\ and Rule 19b-4(f)(6) \8\ thereunder, 
because the proposal: (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 
prior to 30 days after the date of the filing or such shorter time as 
the Commission may designate if consistent with the protection of 
investors and the public interest. In addition, the Exchange provided 
the Commission with written notice of its intent to file the proposed 
rule change, along with a brief description and text of the proposed 
rule change, at least five business days prior to the date of the 
filing of the proposed rule change as required by Rule 19b-4(f)(6).\9\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ 17 CFR 240.19b-4(f)(6).
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    As stated above, a proposed rule change filed under rule 19b-
4(f)(6) \10\ normally does not become operative prior to 30 days after 
the date of filing. However, Rule 19b-4(f)(6)(iii) \11\ permits the 
Commission to designate such shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has requested that the Commission designate such shorter time period so 
that the proposed rule change may become operative no later than 
September 30, 2001. The immediate effectiveness of the proposed rule 
change will allow ROS pilot to continue in effect without interruption.
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(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 upon filing for the following reasons.\12\ First, 
the proposed rule change merely extends the expiration date of the ROS 
pilot from September 30, 2001, to September 30, 2002. Second, an 
extension would allow the Exchange to continue to offer ROS without 
interruption, while the Exchange prepares its proposal seeking 
permanent approval of the ROS pilot. And lastly, the ROS pilot was the 
subject of prior notice and comment when it was first proposed.
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    \12\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital information. 15 
U.S.C. 78c(f).
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    Based on the above reasons, the Commission believes it is 
consistent with the protection of investors and the public interest 
that the proposed rule change becomes operative immediately upon the 
date of filing. 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 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.\13\
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    \13\ 15 U.S.C. 78s(b)(3)(C).
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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-2001-52 and should be 
submitted by October 30, 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)(13).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-25127 Filed 10-5-01; 8:45 am]
BILLING CODE 8010-01-M